Lines of Credit |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Lines of Credit [Abstract] | |
| LINES OF CREDIT | NOTE 8 – LINES OF CREDIT
On June 25, 2025, the Company entered into a new RMB 5,000,000 line of credit facility and received proceeds of RMB 5,000,000 (approximately $0.7 million). The new facility bears an annual rate of 3.6% and was originally due on June 20, 2026. The Company subsequently obtained an extension of the maturity date to June 21, 2027, with all other terms and conditions remaining the same. In addition, the Company’s Chief Executive Officer and Chair of the Board, Ms. Zhilin Li, personally guaranteed the new line of credit and pledged personal assets as collateral for the loan. Total interest expense under this facility for the three months ended June 30, 2026 and 2025 was $6,798 and $9,676, respectively, and $13,274 and $19,595 for the six months ended June 30, 2026, respectively.
On September 25, 2023, the Company entered into a three-year revolving loan agreement and received proceeds of RMB 10,000,000 (approximately $1.4 million). The loan bore interest at an annual rate of 3.35% for the first twelve months, with the interest rate subject to annual adjustment based on the latest one-year loan market quotation rate less 10 basis points as published by the China National Interbank Funding Center on the working day prior to each twelve-month anniversary of the loan. With the reduction of the Loan Prime Rate by the bank on September 20, 2024, the loan interest rate was reduced to 3.25% per annum, effective September 21, 2024, and subsequently reduced to 2.9% per annum, effective September 21, 2025. During the six months ended June 30, 2026, the Company repaid RMB 551,250 (approximately $79,000) of principal. As of June 30, 2026, the Company had repaid aggregate principal of RMB1,653,750 (approximately $238,000). The loan is due on September 20, 2026. The loan is collateralized by the Company’s production facility, including its production line equipment and machinery. As of June 30, 2026, the net carrying amount of property, plant and equipment pledged as collateral amounted to $3,228,728. In addition, Ms. Zhilin Li personally guaranteed the new line of credit. Total interest expense under this facility for the three months ended June 30, 2026 and 2025 was $9,049 and $10,912, respectively, and $18,331 and $22,234 for the six months ended June 30, 2026, respectively.
Principal payments on the above lines of credit are all due within one year of the balance sheet date.
Fair Value of Borrowings Under Lines of Credit – The carrying amounts of the Company’s fixed-rate borrowings, which are due within 12 months, approximate their fair values due to the short-term nature of these instruments. |