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NV 75-1564807 Second Floor, No. 17 Jinpan Road, Haikou Hainan Province CN 570216 Common Stock CPHI NYSEAMER Yes Yes Non-accelerated Filer true false false 43022002 304874 345112 1825 14228 13023 181621 241412 35083 32153 66627 49261 2283 6831 1362423 1621423 86965 82368 2006618 2346407 4219763 4391964 146181 181828 38337341 24079265 44709903 30999464 734042 891083 500160 350643 2616289 2563067 153642 111580 1644857 1435136 73069 71628 1959543 1977222 7681602 7400359 75291 111548 771730 747805 8528623 8259712 0.001 0.001 5000000 5000000 0.001 0.001 500000000 500000000 40522002 40522002 5522002 5522002 40522 15522 73504819 58535819 180000 180000 -49815506 -47214235 12631445 11582646 36181280 22739752 44709903 30999464 948340 1025767 1931876 2162054 864774 1112777 1562823 2385125 83566 -87010 369053 -223071 113764 101292 209362 188403 1376974 440834 2603246 948016 19135 20952 102897 50539 5538 2032 2657 709 1515411 565110 2918162 1187667 -1431845 -652120 -2549109 -1410738 150690 150690 81 422 228 1496 26359 27359 52390 55387 -26278 123753 -52162 96799 -1458123 -528367 -2601271 -1313939 -1458123 -528367 -2601271 -1313939 615213 20263 1048799 27778 -842910 -508104 -1552472 -1286161 -0.04 -0.16 -0.08 -0.4 40522002 3226156 34087748 3261956 3261911 3262 40631679 -180000 -44026679 11319642 7747904 -785572 -785572 7516 7516 3261911 3262 40631679 -180000 -44812251 11327158 6969848 -528367 -528367 91 20263 20263 3262002 3262 40631679 -180000 -45340618 11347421 6461744 15522002 15522 58535819 -180000 -47214235 11582646 22739752 25000000 25000 14969000 14994000 -1143148 -1143148 433586 433586 40522002 40522 73504819 -180000 -48357383 12016232 37024190 -1458123 -1458123 615213 615213 40522002 40522 73504819 -180000 -49815506 12631445 36181280 -2601271 -1313939 2082425 650176 40969 2508 779 709 422932 -3363 165397 185236 -4710 -10020 -520421 -321431 -183334 303613 176953 101678 38033 -84899 8279 25854 -88120 200631 58259 -58259 79970 1092893 695999 163462 297673 42699 40793 -99221 7089 -44998 -40238 -1847 345112 626879 304874 625032 31605 41829 14994000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.65pt"><b>NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15pt 0pt 0.7pt; text-align: justify; text-indent: 0.35pt"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15pt 0pt 0.7pt; text-align: justify; text-indent: 0.35pt"><b><i>Organization and Nature of Operations – </i></b>China Pharma Holdings, Inc., a Nevada corporation (“China Pharma”), owns 100% of Onny Investment Limited (“Onny”), a British Virgin Islands corporation, which owns 100% of Hainan Helpson Medical &amp; Biotechnology Co., Ltd (“Helpson”), a company organized under the laws of the People’s Republic of China (the “PRC”). China Pharma Holdings, Inc. and its subsidiaries are referred to herein as the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.65pt; text-align: justify; text-indent: 0.25pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.65pt; text-align: justify; text-indent: 0.25pt">Onny acquired 100% of the ownership of Helpson on May 25, 2005, by entering into an Equity Transfer Agreement with Helpson’s three former shareholders. The transaction was approved by the Commercial Bureau of Hainan Province on June 12, 2005 and Helpson received the Certificate of Approval for Establishment of Enterprises with Foreign Investment in the PRC on the same day. Helpson received its business license evidencing its Wholly Foreign Owned Enterprise (“WFOE”) status on June 21, 2005.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.15pt 0pt 0.5pt; text-align: justify; text-indent: 0.15pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.15pt 0pt 0.5pt; text-align: justify; text-indent: 0.15pt">Helpson is principally engaged in the development, manufacture and marketing of pharmaceutical products for human use in connection with a variety of high-incidence and high-mortality diseases and medical conditions prevalent in the PRC. All of its operations are conducted in the PRC, where its manufacturing facilities are located. Helpson manufactures pharmaceutical products in the form of dry powder injectables, liquid injectables, tablets, capsules, and cephalosporin oral solutions. The majority of its pharmaceutical products are sold on a prescription basis, and all have been approved for at least one or more therapeutic indications by the National Medical Products Administration (the NMPA, formerly China Food and Drug Administration, or CFDA) based upon demonstrated safety and efficacy.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25pt"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25pt"><b><i>Liquidity and Going Concern</i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.1pt 0pt 0.55pt; text-align: justify; text-indent: 0.05pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.1pt 0pt 0.55pt; text-align: justify; text-indent: 0.05pt">As of June 30, 2026, the Company had cash and cash equivalents of $0.3 million and an accumulated deficit of $49.8 million, and the Company’s current liabilities exceeded current assets by $5.7 million. In addition, the Company incurred net losses of $2.6 million and had cash outflows from operating activities of $0.08 million for the six months ended June 30, 2026. As of June 30, 2026, the Company’s Chairperson, Chief Executive Officer and Interim Chief Financial Officer, Ms. Zhilin Li, had advanced an aggregate of $1,593,929 to the Company to provide working capital, which includes $146,823 advanced in June 2026. Subsequent to quarter end, on July 22, 2026, the Company entered into a securities purchase agreement with an institutional investor to purchase an aggregate of 2,500,000 shares of common stock of the Company for a price of $2.00 per share, as discussed more fully in Note 15. The Company intends to use the proceeds to supplement its operating cash flow and for working capital purposes.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.6pt; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.6pt; text-align: justify">The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.1pt 0pt 0.55pt; text-align: justify; text-indent: 0.7pt"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.1pt 0pt 0.55pt; text-align: justify; text-indent: 0.7pt"><b><i>Consolidation and Basis of Presentation </i></b>– The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are expressed in United States dollars. The accompanying unaudited condensed consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.15pt 0pt 0.5pt; text-align: justify; text-indent: 0.15pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.15pt 0pt 0.5pt; text-align: justify; text-indent: 0.15pt">Helpson’s functional currency is the Chinese Renminbi. Helpson’s revenue and expenses are translated into United States dollars at the average exchange rate for the period. Assets and liabilities are translated at the exchange rate as of the end of the reporting period. Gains or losses from translating Helpson’s financial statements are included in accumulated other comprehensive income, which is a component of stockholders’ equity. Gains and losses arising from transactions denominated in a currency other than the functional currency of the entity that is party to the transaction are included in the results of operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.1pt 0pt 0.6pt; text-align: justify; text-indent: 0.15pt">In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated on consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results. Such financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2026 (“2025 Annual Report”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6pt; text-align: justify; text-indent: -0.6pt"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6pt; text-align: justify; text-indent: -0.6pt"><b><i>Accounting Estimates </i>- </b>The methodology used to prepare the Company’s financial statements is in conformity with U.S. GAAP, which requires the management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Therefore, actual results could differ from those estimates.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6pt; text-align: justify; text-indent: -0.6pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.85pt 0pt 0.35pt; text-align: justify; text-indent: 0.2pt">The Company uses the same accounting policies in preparing its quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.85pt 0pt 0.35pt; text-align: justify; text-indent: 0.2pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Cash and Cash Equivalents </i></b>– Cash and cash equivalents include interest bearing and non-interest bearing bank deposits, money market accounts, and short-term banker’s acceptances notes purchased with maturities of three months or less. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.25pt; text-align: justify; text-indent: -0.25pt"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.25pt; text-align: justify; text-indent: -0.25pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.25pt; text-align: justify; text-indent: -0.25pt"><b><i>Accounts Receivable and Allowance for Credit Losses </i></b>– Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company uses loss-rate methods to estimate allowance for credit loss. The allowance for credit loss is estimated based upon the Company’s assessment of various factors including historical experience, the age of the accounts receivable balances, current general economic conditions, future expectations and customer-specific quantitative and qualitative factors that may affect the Company’s customers’ ability to pay. An allowance is also made when there is objective evidence for the Company to reasonably estimate the amount of probable loss.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.25pt; text-align: justify; text-indent: -0.25pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company adopted ASU 2016-13 Financial Instruments — Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 33.75pt; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In establishing an allowance for credit losses, the Company uses reasonable and supportable information, which is based on historical collection experience, the financial condition of its customers and assumptions for the future movement of different economic drivers and how these drivers will affect each other. Loss-rate approach is based on the historical loss rates and expectations of future conditions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Advances to Suppliers and Contract Liabilities</i></b> – Common practice in the PRC is to make advances to suppliers for materials and to incur contract liabilities when advances from customers for finished products are received. Advances to suppliers are applied to trade accounts payable when the materials are received. Contract liabilities incurred when advances received from customers are applied against trade accounts receivable when finished products are sold. The Company reviews a supplier’s credit history and background information before advancing payment. If the financial condition of its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Company would recognize bad debt expense in the period they are considered unlikely to be collected. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Lines of Credit and Interest – </i></b>The Company records lines of credit or other loans at the principal amount received. Interest is accrued using the effective interest method over the term of the related borrowing.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Leases – </i></b>At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term including any options to extend the lease that the Company is reasonably certain to exercise. The Company calculates the present value of lease payments using an incremental borrowing rate as the Company’s leases do not provide an implicit interest rate. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. At the lease commencement date, the Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. The Company may enter into leases with an initial term of 12 months or less (“Short-Term Leases”). For any Short-Term Leases, the Company records the rent expense on a straight-line basis and does not record the leases on the balance sheet. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Valuation of Long-Lived Assets</i></b> – The carrying values of long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying values may not be recoverable. When such an event occurs, the Company projects the undiscounted cash flows to be generated from the use of the asset and its eventual disposition over the remaining life of the asset. If projections indicate that the carrying value of an asset will not be recovered, it is reduced by the estimated excess of the carrying value over the projected discounted cash flows estimated to be generated by the asset. If there is uncertainty both in timing and amount, the Company will use the projected discounted cash flows to be generated by the asset. There were no indicators of impairment of long-lived assets as of June 30, 2026 and December 31, 2025. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Property, Plant and Equipment</i></b> – Property, plant and equipment are stated at cost. Maintenance and repairs are charged to expenses as incurred and major improvements are capitalized. Gains or losses on sale, trade-in or retirement are included in operations during the period of disposition. Depreciation relating to office equipment was included in general and administrative expenses, while all other depreciation was included in cost of revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Accounts and other payables</i></b> – Accounts and other payables represent liabilities for goods, accrued payroll and loans. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: justify"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: justify"><b><i>Inventory – </i></b>Inventory consists of raw materials, work in process and finished goods and is stated at the lower of cost or net realizable value. Cost is determined by using a weighted average. For work in process and manufactured inventories, cost consists of raw materials, direct labor and an allocated portion of the Company’s production overhead. The Company writes down excess and obsolete inventory to its estimated net realizable value based upon assumptions about future demand and market conditions. For finished goods and work in process, if the estimated net realizable value for an inventory item, which is the estimated selling price in the ordinary course of business, less reasonably predicable costs to completion and disposal, is lower than its cost, the specific inventory item is written down to its estimated net realizable value. Net realizable value for raw materials is based on replacement cost. Provisions for inventory write-downs are included in the cost of revenues in the consolidated statements of operations. Inventories are carried on lower cost basis until sold or scrapped.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: justify"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: justify"><b><i>Reverse Stock Splits </i></b>– Effective April 15, 2025, China Pharma implemented a 1-for-10 reverse stock split. All share and per share disclosures have been retroactively restated to reflect the impact of the reverse stock split.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.25pt; text-align: justify; text-indent: -0.25pt"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.25pt; text-align: justify; text-indent: -0.25pt"><b><i>Loss Per Share</i> -</b> The Company had no potentially dilutive common shares outstanding during the three and six months ended June 30, 2026 and June 30, 2025. Accordingly, diluted loss per share was the same as basic loss per share for all periods presented. The potentially dilutive common shares related to the option to purchase 1,330 shares of common stock as of June 30, 2026 and 2025 are excluded from the computation of diluted net loss per share for all periods presented because the effect is anti-dilutive due to net losses of the Company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i> </i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Recent Accounting Pronouncements</i></b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4pt; text-align: justify; text-indent: 0.25pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4pt; text-align: justify; text-indent: 0.25pt">On July 30, 2025, the FASB issued ASU 2025-05, which amends ASC 326-20 to provide a practical expedient for all entities which elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset in developing reasonable and supportable forecasts as part of estimating expected credit losses, and an accounting policy election for all entities, other than a public business entity, that elect the practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient and, if so, whether it has also applied the accounting policy election. An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt"><b>Recently issued but not yet adopted accounting pronouncements</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.25pt; text-align: justify; text-indent: 0.35pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.25pt; text-align: justify; text-indent: 0.35pt">On December 17, 2025, the FASB issued ASU 2025-12, which is to correct, clarify, and otherwise improve U.S. GAAP. ASU 2025- 12 includes 33 improvements that span a wide range of topics, including Clarifying diluted earnings per share (EPS) calculation when a loss from continuing operations exists, Clarifying disclosure requirements for lease receivables from sales-type or direct financing leases, Revising the calculation of the reference amount for beneficial interests to prevent double counting credit losses, Clarifying the permissible methods to account for treasury stock retirements, and Clarifying the guidance for transfers of receivables from contracts with customers. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this Update in an interim period, it must adopt them as of the beginning of the annual reporting period that includes that interim reporting period. An entity may elect to early adopt the amendments on an issue-by-issue basis. For example, an entity may decide to early adopt certain amendments and adopt the remaining amendments at the effective date. An entity should apply the amendments in this Update (except for the amendments to Topic 260, Earnings Per Share, related to Issue 4) using one of the following transition methods: (i) Prospectively to all transactions recognized on or after the date that the entity first applies the amendments, or (ii) Retrospectively to the beginning of the earliest comparative period presented. An entity should adjust the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest comparative period presented. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 182.4pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05pt 0pt 0; text-align: justify">On December 8, 2025, the FASB issued ASU 2025-11, which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides “interim financial statements and notes in accordance with GAAP.” The ASU also addresses the form and content of such financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishes a principle under which an entity must “disclose events since the end of the last annual reporting period that have a material impact on the entity.” For public business entities, the amendments in ASU 2025- 11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. For all other entities, the amendments in ASU 2025- 11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted for all entities. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15pt 0pt 2.05pt; text-align: justify; text-indent: 0.05pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15pt 0pt 2.05pt; text-align: justify; text-indent: 0.05pt">In January 2025, the FASB issued ASU 2025-01, “Income Statement – Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date.” This pronouncement revises the effective date of ASU 2024-03 and clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Entities within the ASU’s scope are permitted to early adopt the accounting standard update. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.85pt; text-align: justify; text-indent: 0.15pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.85pt; text-align: justify; text-indent: 0.15pt">From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on its consolidated financial statements upon adoption</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15pt 0pt 0.7pt; text-align: justify; text-indent: 0.35pt"><b><i>Organization and Nature of Operations – </i></b>China Pharma Holdings, Inc., a Nevada corporation (“China Pharma”), owns 100% of Onny Investment Limited (“Onny”), a British Virgin Islands corporation, which owns 100% of Hainan Helpson Medical &amp; Biotechnology Co., Ltd (“Helpson”), a company organized under the laws of the People’s Republic of China (the “PRC”). China Pharma Holdings, Inc. and its subsidiaries are referred to herein as the Company.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.65pt; text-align: justify; text-indent: 0.25pt">Onny acquired 100% of the ownership of Helpson on May 25, 2005, by entering into an Equity Transfer Agreement with Helpson’s three former shareholders. The transaction was approved by the Commercial Bureau of Hainan Province on June 12, 2005 and Helpson received the Certificate of Approval for Establishment of Enterprises with Foreign Investment in the PRC on the same day. Helpson received its business license evidencing its Wholly Foreign Owned Enterprise (“WFOE”) status on June 21, 2005.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.15pt 0pt 0.5pt; text-align: justify; text-indent: 0.15pt">Helpson is principally engaged in the development, manufacture and marketing of pharmaceutical products for human use in connection with a variety of high-incidence and high-mortality diseases and medical conditions prevalent in the PRC. All of its operations are conducted in the PRC, where its manufacturing facilities are located. Helpson manufactures pharmaceutical products in the form of dry powder injectables, liquid injectables, tablets, capsules, and cephalosporin oral solutions. The majority of its pharmaceutical products are sold on a prescription basis, and all have been approved for at least one or more therapeutic indications by the National Medical Products Administration (the NMPA, formerly China Food and Drug Administration, or CFDA) based upon demonstrated safety and efficacy.</p> 1 1 1 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25pt"><b><i>Liquidity and Going Concern</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.1pt 0pt 0.55pt; text-align: justify; text-indent: 0.05pt">As of June 30, 2026, the Company had cash and cash equivalents of $0.3 million and an accumulated deficit of $49.8 million, and the Company’s current liabilities exceeded current assets by $5.7 million. In addition, the Company incurred net losses of $2.6 million and had cash outflows from operating activities of $0.08 million for the six months ended June 30, 2026. As of June 30, 2026, the Company’s Chairperson, Chief Executive Officer and Interim Chief Financial Officer, Ms. Zhilin Li, had advanced an aggregate of $1,593,929 to the Company to provide working capital, which includes $146,823 advanced in June 2026. Subsequent to quarter end, on July 22, 2026, the Company entered into a securities purchase agreement with an institutional investor to purchase an aggregate of 2,500,000 shares of common stock of the Company for a price of $2.00 per share, as discussed more fully in Note 15. The Company intends to use the proceeds to supplement its operating cash flow and for working capital purposes.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.6pt; text-align: justify">The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.</p> 300000 -49800000 5700000 -2600000 -80000.00 1593929 146823 2500000 2 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.1pt 0pt 0.55pt; text-align: justify; text-indent: 0.7pt"><b><i>Consolidation and Basis of Presentation </i></b>– The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are expressed in United States dollars. The accompanying unaudited condensed consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.15pt 0pt 0.5pt; text-align: justify; text-indent: 0.15pt">Helpson’s functional currency is the Chinese Renminbi. Helpson’s revenue and expenses are translated into United States dollars at the average exchange rate for the period. Assets and liabilities are translated at the exchange rate as of the end of the reporting period. Gains or losses from translating Helpson’s financial statements are included in accumulated other comprehensive income, which is a component of stockholders’ equity. Gains and losses arising from transactions denominated in a currency other than the functional currency of the entity that is party to the transaction are included in the results of operations.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.1pt 0pt 0.6pt; text-align: justify; text-indent: 0.15pt">In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. All significant intercompany transactions and balances are eliminated on consolidation. However, the results of operations included in such financial statements may not necessarily be indicative of annual results. Such financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on April 1, 2026 (“2025 Annual Report”).</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.6pt; text-align: justify; text-indent: -0.6pt"><b><i>Accounting Estimates </i>- </b>The methodology used to prepare the Company’s financial statements is in conformity with U.S. GAAP, which requires the management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Therefore, actual results could differ from those estimates.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.85pt 0pt 0.35pt; text-align: justify; text-indent: 0.2pt">The Company uses the same accounting policies in preparing its quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Cash and Cash Equivalents </i></b>– Cash and cash equivalents include interest bearing and non-interest bearing bank deposits, money market accounts, and short-term banker’s acceptances notes purchased with maturities of three months or less. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.25pt; text-align: justify; text-indent: -0.25pt"><b><i>Accounts Receivable and Allowance for Credit Losses </i></b>– Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company uses loss-rate methods to estimate allowance for credit loss. The allowance for credit loss is estimated based upon the Company’s assessment of various factors including historical experience, the age of the accounts receivable balances, current general economic conditions, future expectations and customer-specific quantitative and qualitative factors that may affect the Company’s customers’ ability to pay. An allowance is also made when there is objective evidence for the Company to reasonably estimate the amount of probable loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company adopted ASU 2016-13 Financial Instruments — Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In establishing an allowance for credit losses, the Company uses reasonable and supportable information, which is based on historical collection experience, the financial condition of its customers and assumptions for the future movement of different economic drivers and how these drivers will affect each other. Loss-rate approach is based on the historical loss rates and expectations of future conditions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Advances to Suppliers and Contract Liabilities</i></b> – Common practice in the PRC is to make advances to suppliers for materials and to incur contract liabilities when advances from customers for finished products are received. Advances to suppliers are applied to trade accounts payable when the materials are received. Contract liabilities incurred when advances received from customers are applied against trade accounts receivable when finished products are sold. The Company reviews a supplier’s credit history and background information before advancing payment. If the financial condition of its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Company would recognize bad debt expense in the period they are considered unlikely to be collected. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Lines of Credit and Interest – </i></b>The Company records lines of credit or other loans at the principal amount received. Interest is accrued using the effective interest method over the term of the related borrowing.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Leases – </i></b>At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term including any options to extend the lease that the Company is reasonably certain to exercise. The Company calculates the present value of lease payments using an incremental borrowing rate as the Company’s leases do not provide an implicit interest rate. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. At the lease commencement date, the Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. The Company may enter into leases with an initial term of 12 months or less (“Short-Term Leases”). For any Short-Term Leases, the Company records the rent expense on a straight-line basis and does not record the leases on the balance sheet. </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Valuation of Long-Lived Assets</i></b> – The carrying values of long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying values may not be recoverable. When such an event occurs, the Company projects the undiscounted cash flows to be generated from the use of the asset and its eventual disposition over the remaining life of the asset. If projections indicate that the carrying value of an asset will not be recovered, it is reduced by the estimated excess of the carrying value over the projected discounted cash flows estimated to be generated by the asset. If there is uncertainty both in timing and amount, the Company will use the projected discounted cash flows to be generated by the asset. There were no indicators of impairment of long-lived assets as of June 30, 2026 and December 31, 2025. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Property, Plant and Equipment</i></b> – Property, plant and equipment are stated at cost. Maintenance and repairs are charged to expenses as incurred and major improvements are capitalized. Gains or losses on sale, trade-in or retirement are included in operations during the period of disposition. Depreciation relating to office equipment was included in general and administrative expenses, while all other depreciation was included in cost of revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Accounts and other payables</i></b> – Accounts and other payables represent liabilities for goods, accrued payroll and loans. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: justify"><b><i>Inventory – </i></b>Inventory consists of raw materials, work in process and finished goods and is stated at the lower of cost or net realizable value. Cost is determined by using a weighted average. For work in process and manufactured inventories, cost consists of raw materials, direct labor and an allocated portion of the Company’s production overhead. The Company writes down excess and obsolete inventory to its estimated net realizable value based upon assumptions about future demand and market conditions. For finished goods and work in process, if the estimated net realizable value for an inventory item, which is the estimated selling price in the ordinary course of business, less reasonably predicable costs to completion and disposal, is lower than its cost, the specific inventory item is written down to its estimated net realizable value. Net realizable value for raw materials is based on replacement cost. Provisions for inventory write-downs are included in the cost of revenues in the consolidated statements of operations. Inventories are carried on lower cost basis until sold or scrapped.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0; text-align: justify"><b><i>Reverse Stock Splits </i></b>– Effective April 15, 2025, China Pharma implemented a 1-for-10 reverse stock split. All share and per share disclosures have been retroactively restated to reflect the impact of the reverse stock split.</p> 1-for-10 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.25pt; text-align: justify; text-indent: -0.25pt"><b><i>Loss Per Share</i> -</b> The Company had no potentially dilutive common shares outstanding during the three and six months ended June 30, 2026 and June 30, 2025. Accordingly, diluted loss per share was the same as basic loss per share for all periods presented. The potentially dilutive common shares related to the option to purchase 1,330 shares of common stock as of June 30, 2026 and 2025 are excluded from the computation of diluted net loss per share for all periods presented because the effect is anti-dilutive due to net losses of the Company.</p> 0 0 0 0 1330 1330 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Recent Accounting Pronouncements</i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4pt; text-align: justify; text-indent: 0.25pt">On July 30, 2025, the FASB issued ASU 2025-05, which amends ASC 326-20 to provide a practical expedient for all entities which elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset in developing reasonable and supportable forecasts as part of estimating expected credit losses, and an accounting policy election for all entities, other than a public business entity, that elect the practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient and, if so, whether it has also applied the accounting policy election. An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5pt"><b>Recently issued but not yet adopted accounting pronouncements</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.25pt; text-align: justify; text-indent: 0.35pt">On December 17, 2025, the FASB issued ASU 2025-12, which is to correct, clarify, and otherwise improve U.S. GAAP. ASU 2025- 12 includes 33 improvements that span a wide range of topics, including Clarifying diluted earnings per share (EPS) calculation when a loss from continuing operations exists, Clarifying disclosure requirements for lease receivables from sales-type or direct financing leases, Revising the calculation of the reference amount for beneficial interests to prevent double counting credit losses, Clarifying the permissible methods to account for treasury stock retirements, and Clarifying the guidance for transfers of receivables from contracts with customers. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this Update in an interim period, it must adopt them as of the beginning of the annual reporting period that includes that interim reporting period. An entity may elect to early adopt the amendments on an issue-by-issue basis. For example, an entity may decide to early adopt certain amendments and adopt the remaining amendments at the effective date. An entity should apply the amendments in this Update (except for the amendments to Topic 260, Earnings Per Share, related to Issue 4) using one of the following transition methods: (i) Prospectively to all transactions recognized on or after the date that the entity first applies the amendments, or (ii) Retrospectively to the beginning of the earliest comparative period presented. An entity should adjust the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest comparative period presented. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05pt 0pt 0; text-align: justify">On December 8, 2025, the FASB issued ASU 2025-11, which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides “interim financial statements and notes in accordance with GAAP.” The ASU also addresses the form and content of such financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishes a principle under which an entity must “disclose events since the end of the last annual reporting period that have a material impact on the entity.” For public business entities, the amendments in ASU 2025- 11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. For all other entities, the amendments in ASU 2025- 11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted for all entities. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.15pt 0pt 2.05pt; text-align: justify; text-indent: 0.05pt">In January 2025, the FASB issued ASU 2025-01, “Income Statement – Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date.” This pronouncement revises the effective date of ASU 2024-03 and clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Entities within the ASU’s scope are permitted to early adopt the accounting standard update. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.85pt; text-align: justify; text-indent: 0.15pt">From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASC are communicated through issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on its consolidated financial statements upon adoption</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2pt"><b>NOTE 2 – ACCOUNTS RECEIVABLE, NET</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.95pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.95pt">Accounts receivable, net, consist of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">June 30,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Trade accounts receivable</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">195,849</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">254,435</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1.5pt">Less: allowance for credit losses</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(14,228</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(13,023</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Trade accounts receivable, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">181,621</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">241,412</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 2.15pt">The changes in the allowances for credit losses during the three and six months ended June 30, 2026 and 2025 were as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Three Months Ended <br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Six Months Ended <br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%">Balance, Beginning of Period</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,434</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,605,157</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,023</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,587,182</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left"> Credit losses </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,660</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,032</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">779</td><td style="text-align: left"></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">709</td><td style="text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt; text-align: left">Foreign currency translation adjustment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"></td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,134</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"></td><td style="border-bottom: Black 1.5pt solid; text-align: right">36,817</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">426</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">56,115</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 4pt">Balance, End of Period</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">14,228</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">13,644,006</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">14,228</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">13,644,006 </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.95pt">Accounts receivable, net, consist of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">June 30,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Trade accounts receivable</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">195,849</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">254,435</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1.5pt">Less: allowance for credit losses</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(14,228</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(13,023</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Trade accounts receivable, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">181,621</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">241,412</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 195849 254435 14228 13023 181621 241412 <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 2.15pt">The changes in the allowances for credit losses during the three and six months ended June 30, 2026 and 2025 were as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Three Months Ended <br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Six Months Ended <br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%">Balance, Beginning of Period</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,434</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,605,157</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,023</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,587,182</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left"> Credit losses </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,660</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,032</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">779</td><td style="text-align: left"></td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">709</td><td style="text-align: left"></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt; text-align: left">Foreign currency translation adjustment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"></td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,134</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"></td><td style="border-bottom: Black 1.5pt solid; text-align: right">36,817</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">426</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">56,115</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 4pt">Balance, End of Period</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">14,228</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">13,644,006</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">14,228</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">13,644,006 </td></tr> </table> 9434 13605157 13023 13587182 3660 2032 779 709 1134 36817 426 56115 14228 13644006 14228 13644006 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2pt"><b>NOTE 3 – INVENTORIES</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.1pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.1pt">Inventories consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.1pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 180.35pt"></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>June 30,<br/> 2026</b></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>December 31,<br/> 2025</b></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Raw materials</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">732,622</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">843,603</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Work in process</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">202,497</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">457,817</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt; text-align: left">Finished goods</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">1,587,415</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">1,465,243</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-left: 0.125in; font-weight: bold; text-align: left">Total Inventories</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,522,534</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,766,663</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: Provision for obsolescence</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(1,160,111</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(1,145,240</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">1,362,423</td> <td style="padding-bottom: 4pt; text-align: left"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">1,621,423</td> <td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2pt">Changes to the provision for obsolescence consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">For the Three Months Ended <br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">For the Six Months Ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">At the beginning of the period</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,117,335</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">574,071</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,145,240</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">574,071</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Net additions to earnings</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">67,332</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">213,379</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">21,508</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">213,379</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Foreign currency translation adjustment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(24,556</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">747</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(6,637</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">747</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 4pt; text-align: left"><span style="font-size: 10pt">At the end of the period</span></td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"></td><td style="border-bottom: Black 4pt double; text-align: right">1,160,111</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"></td><td style="border-bottom: Black 4pt double; text-align: right">788,197</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"></td><td style="border-bottom: Black 4pt double; text-align: right">1,160,111</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"></td><td style="border-bottom: Black 4pt double; text-align: right">788,197</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.1pt">Inventories consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.1pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 180.35pt"></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>June 30,<br/> 2026</b></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>December 31,<br/> 2025</b></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Raw materials</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">732,622</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">843,603</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Work in process</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">202,497</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">457,817</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt; text-align: left">Finished goods</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">1,587,415</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td> <td style="border-bottom: Black 1.5pt solid; text-align: right">1,465,243</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-left: 0.125in; font-weight: bold; text-align: left">Total Inventories</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,522,534</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,766,663</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: Provision for obsolescence</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(1,160,111</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(1,145,240</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">1,362,423</td> <td style="padding-bottom: 4pt; text-align: left"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">1,621,423</td> <td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 732622 843603 202497 457817 1587415 1465243 2522534 2766663 1160111 1145240 1362423 1621423 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2pt">Changes to the provision for obsolescence consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">For the Three Months Ended <br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">For the Six Months Ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left">At the beginning of the period</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,117,335</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">574,071</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">1,145,240</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">574,071</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Net additions to earnings</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">67,332</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">213,379</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">21,508</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">213,379</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Foreign currency translation adjustment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(24,556</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">747</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(6,637</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">747</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 4pt; text-align: left"><span style="font-size: 10pt">At the end of the period</span></td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"></td><td style="border-bottom: Black 4pt double; text-align: right">1,160,111</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"></td><td style="border-bottom: Black 4pt double; text-align: right">788,197</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"></td><td style="border-bottom: Black 4pt double; text-align: right">1,160,111</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"></td><td style="border-bottom: Black 4pt double; text-align: right">788,197</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 1117335 574071 1145240 574071 67332 213379 21508 213379 24556 -747 6637 -747 1160111 788197 1160111 788197 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 4 – PROPERTY, PLANT AND EQUIPMENT</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property, plant and equipment consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">June 30,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; width: 76%; text-align: left; padding-left: 0.125in">Permit of land use</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">413,554</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">400,734</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in">Building</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,603,367</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,305,653</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; text-align: left; padding-left: 0.125in">Plant, machinery and equipment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">28,387,142</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">27,503,334</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; text-align: left; padding-left: 0.125in">Motor vehicle</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,957</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">271,278</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Office equipment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">393,204</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">400,816</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; font-weight: bold; padding-left: 0.25in">Total</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">39,077,224</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">37,881,815</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Less: accumulated depreciation</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(34,857,461</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(33,489,851</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; font-weight: bold; text-align: left; padding-bottom: 4pt; padding-left: 0.125in">Property, plant and equipment, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,219,763</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,391,964</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; width: 88%"><b>Asset</b></td><td style="padding-bottom: 1.5pt; width: 1%"> </td> <td style="padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: center"><span style="font-size: 10pt"><b>Life - years</b></span></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">permit of land use</td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"><span style="font-size: 10pt">40 - 70</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td>Building</td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"><span style="font-size: 10pt">20 - 49</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">plant, machinery and equipment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"><span style="font-size: 10pt">5 - 10</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Motor vehicle</td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"><span style="font-size: 10pt">5 - 10</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">office equipment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"><span style="font-size: 10pt">3-5</span></td><td style="text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05pt 0pt 0.1pt; text-align: justify; text-indent: -0.1pt">Depreciation relating to office equipment was included in general and administrative expenses, while all other depreciation was included in cost of revenue. Depreciation expense was $150,327 and $163,503 for the three months ended June 30, 2026 and 2025, respectively, and $305,615 and $335,104 for the six months ended June 30, 2026 and 2025, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Property, plant and equipment consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">June 30,</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">December 31,</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; width: 76%; text-align: left; padding-left: 0.125in">Permit of land use</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">413,554</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">400,734</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in">Building</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,603,367</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,305,653</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; text-align: left; padding-left: 0.125in">Plant, machinery and equipment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">28,387,142</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">27,503,334</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; text-align: left; padding-left: 0.125in">Motor vehicle</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">279,957</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">271,278</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Office equipment</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">393,204</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">400,816</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; font-weight: bold; padding-left: 0.25in">Total</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">39,077,224</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">37,881,815</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Less: accumulated depreciation</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(34,857,461</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(33,489,851</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; font-weight: bold; text-align: left; padding-bottom: 4pt; padding-left: 0.125in">Property, plant and equipment, net</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,219,763</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,391,964</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 413554 400734 9603367 9305653 28387142 27503334 279957 271278 393204 400816 39077224 37881815 34857461 33489851 4219763 4391964 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; width: 88%"><b>Asset</b></td><td style="padding-bottom: 1.5pt; width: 1%"> </td> <td style="padding-bottom: 1.5pt; width: 1%; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: center"><span style="font-size: 10pt"><b>Life - years</b></span></td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">permit of land use</td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"><span style="font-size: 10pt">40 - 70</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td>Building</td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"><span style="font-size: 10pt">20 - 49</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">plant, machinery and equipment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"><span style="font-size: 10pt">5 - 10</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left">Motor vehicle</td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"><span style="font-size: 10pt">5 - 10</span></td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">office equipment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"><span style="font-size: 10pt">3-5</span></td><td style="text-align: left"> </td></tr> </table> P40Y P70Y P20Y P49Y P5Y P10Y P5Y P10Y P3Y P5Y 150327 163503 305615 335104 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.1pt"><b>NOTE 5 – INTANGIBLE ASSETS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.85pt 0pt 0.05pt; text-align: justify; text-indent: 0.15pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.85pt 0pt 0.05pt; text-align: justify; text-indent: 0.15pt">Intangible assets represent the cost of medical formulas approved for production by the NMPA, the intellectual property acquired from Chengdu Bonier Medical Technology Development Co., Ltd. through certain Technology Transfer Agreement (“Bonier Agreement”) and the invention patents and intellectual property acquired pursuant to Technology Transfer Agreements. <span style="-sec-ix-hidden: hidden-fact-67"><span style="-sec-ix-hidden: hidden-fact-68">No</span></span> costs were reclassified from advances to intangible assets during the six months ended June 30, 2026 and 2025, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.15pt; text-align: justify; text-indent: 0.15pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.15pt; text-align: justify; text-indent: 0.15pt">On February 5, 2026, the Company entered into a Technology Transfer Agreement (the “Xiaoyun Chen Agreement”) with Xiaoyun Chen (“Transferor Chen”). Transferor Chen owns an invention patent of a Topiroxostat Nanoemulsion and Method for Its Preparation. Pursuant to the Xiaoyun Chen Agreement, Transferor Chen will transfer the ownership of the patent to Helpson. Transferor Chen or his designated third party shall provide relevant technical services, including, but not limited to, product research and development, writing of registration materials, registration application and other technical services.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1pt 0pt 0; text-align: justify; text-indent: 0.3pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.1pt 0pt 0; text-align: justify; text-indent: 0.3pt">The aggregate transfer price as contemplated by the Xiaoyun Chen Agreement is $7.812 million which was paid to the Transferor upon the issuance of 12,400,000 shares of common stock of the Company at $0.63 per share based on the closing market price of the Company’s common stock as of the closing date. The value of the intangible asset will be amortized over its remaining useful life of approximately 10.4 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0; text-align: justify; text-indent: 0.35pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0; text-align: justify; text-indent: 0.35pt">On February 26, 2026, the Company entered into a Technology Transfer Agreement (the “Xiaoyan Zhang Agreement”) with Xiaoyan Zhang (“Transferor Zhang”). Transferor Zhang owns an invention patent of a Prinsepia Utilis Esterol Sublingual Tablets and Method for Its Preparation. Pursuant to the Xiaoyan Zhang Agreement, Transferor Zhang will transfer the ownership of the patent to Helpson. Transferor Zhang or his designated third party shall provide relevant technical services, including, but not limited to, product research and development, writing of registration materials, registration application and other technical services.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0; text-align: justify; text-indent: 0.25pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0; text-align: justify; text-indent: 0.25pt">The aggregate transfer price as contemplated by the Xiaoyan Zhang Agreement is $7.182 million which was paid to the Transferor and his two designees upon the issuance of 12,600,000 shares of common stock of the Company at $0.57 per share based on the closing market price of the Company’s common stock as of the closing date. The value of the intangible asset will be amortized over its remaining useful life of approximately 12.0 years.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.05pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.05pt">Approved medical formulas are amortized from the date NMPA approval is obtained over their individually identifiable estimated useful lives, which range from ten to thirteen years. It is at least reasonably possible that a change in the estimated useful lives of the medical formulas could occur in the near term due to changes in the demand for the drugs and medicines produced from these medical formulas. Amortization expense relating to intangible assets was $951,528 and $157,360 for the three months ended June 30, 2026 and 2025, respectively and $1,776,810 and $315,072 for the six months ended June 30, 2026 and 2025, respectively. which was included in the general and administrative expenses. Medical formulas typically do not have a residual value at the end of their amortization period.</p><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.25pt">Intangible assets consisted of NMPA approved medical formulas, a Utility Model Patent and three Invention Patents as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>June 30,<br/> 2026</b></td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>December 31, <br/> 2025</b></td> <td style="text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">NMPA approved medical formulas</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">4,956,561</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">4,802,903</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Technology from Bonier</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,795,396</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,739,737</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Invention Patents</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">39,477,242</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">    23,447,518</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">46,229,199</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">29,990,158</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Accumulated amortization</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(8,244,865</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(6,246,739</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Net carrying amount</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">37,984,334</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">23,743,419</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Intangible assets in process</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">353,007</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">335,846</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">38,337,341</td> <td style="padding-bottom: 4pt; text-align: left"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">24,079,265</td> <td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 7812000 12400000 0.63 P10Y4M24D 7182000 12600000 0.57 P12Y P10Y P13Y 951528 157360 1776810 315072 <p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0 0pt 0.25pt">Intangible assets consisted of NMPA approved medical formulas, a Utility Model Patent and three Invention Patents as follows:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>June 30,<br/> 2026</b></td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td style="text-align: center; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>December 31, <br/> 2025</b></td> <td style="text-align: center; padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">NMPA approved medical formulas</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">4,956,561</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">4,802,903</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Technology from Bonier</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,795,396</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,739,737</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Invention Patents</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">39,477,242</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">    23,447,518</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">46,229,199</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">29,990,158</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Accumulated amortization</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(8,244,865</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(6,246,739</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Net carrying amount</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">37,984,334</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">23,743,419</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Intangible assets in process</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">353,007</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">335,846</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">38,337,341</td> <td style="padding-bottom: 4pt; text-align: left"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">24,079,265</td> <td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 4956561 4802903 1795396 1739737 39477242 23447518 46229199 29990158 8244865 6246739 37984334 23743419 353007 335846 38337341 24079265 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><b>NOTE 6 – OTHER PAYABLES</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35pt"><span style="font-size: 10pt">Other Payables consisted of the following:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>June 30,<br/> 2026</b></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>December 31, <br/> 2025</b></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Compensation payable to officer and director (1)</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">1,935,506</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">       1,919,506</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Business taxes and other</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">377,372</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">351,904</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Payable to Helpson’s Labor Union (2)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">154,165</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">149,385</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 1.5pt; text-align: left">Payable to Chunming Dong (3)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">149,246</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">142,272</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left; padding-bottom: 4pt">Total Other Payables</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,616,289</td> <td style="padding-bottom: 4pt; text-align: left"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,563,067</td> <td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td> <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents $44,000 of compensation payable to two members of the Company’s Board of Directors and executive compensation to Chairperson Li totaling $1,883,506 as of June 30, 2026 and $1,875,506 executive compensation to Chairperson Li as of December 31, 2025, respectively.</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 18.3pt; text-indent: -17.9pt"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td> <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents non-interest borrowings from Helpson’s Labor Union otained in November 2024, with no specified repayment terms.</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 18.3pt; text-align: justify; text-indent: -17.9pt"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td> <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents an advance made to the Company in June 2025 from Chunming Dong, the husband of Chairperson Li. The advance was non-interest-bearing until December 31, 2025. Effective January 1, 2026, bears interest at 3.3% per annum.</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35pt"><span style="font-size: 10pt">Other Payables consisted of the following:</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>June 30,<br/> 2026</b></td> <td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>December 31, <br/> 2025</b></td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Compensation payable to officer and director (1)</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">1,935,506</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 9%; text-align: right">       1,919,506</td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Business taxes and other</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">377,372</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">351,904</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Payable to Helpson’s Labor Union (2)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">154,165</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">149,385</td> <td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="padding-bottom: 1.5pt; text-align: left">Payable to Chunming Dong (3)</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">149,246</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">142,272</td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left; padding-bottom: 4pt">Total Other Payables</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,616,289</td> <td style="padding-bottom: 4pt; text-align: left"> </td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">2,563,067</td> <td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</span></td> <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents $44,000 of compensation payable to two members of the Company’s Board of Directors and executive compensation to Chairperson Li totaling $1,883,506 as of June 30, 2026 and $1,875,506 executive compensation to Chairperson Li as of December 31, 2025, respectively.</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 18.3pt; text-indent: -17.9pt"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</span></td> <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents non-interest borrowings from Helpson’s Labor Union otained in November 2024, with no specified repayment terms.</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 18.3pt; text-align: justify; text-indent: -17.9pt"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)</span></td> <td style="text-align: justify; font-size: 10pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Represents an advance made to the Company in June 2025 from Chunming Dong, the husband of Chairperson Li. The advance was non-interest-bearing until December 31, 2025. Effective January 1, 2026, bears interest at 3.3% per annum.</span></td></tr> </table> 1935506 1919506 377372 351904 154165 149385 149246 142272 2616289 2563067 44000 1883506 1875506 0.033 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><b>NOTE 7 – RELATED PARTY TRANSACTIONS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.1pt; text-align: justify; text-indent: 0.25pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.1pt; text-align: justify; text-indent: 0.25pt">On June 25, 2026, the Company borrowed RMB 1,000,000 (approximately US$146,823) from Chairperson Li for working capital purposes. The loan bears interest at an annual rate of 3.0% and is payable within one year with the maturity date of June 24, 2027, pursuant to the terms of the loan agreement. This borrowing was in addition to amounts previously advanced by Chairman Li to the Company. As of June 30, 2026 and December 31, 2025, the total amounts owed to Chairperson Li were $1,644,857 and $1,435,136, respectively, and were recorded as “Borrowings from related parties” on the accompanying condensed consolidated balance sheets.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0; text-align: justify">On July 8, 2019, the Company entered into a loan agreement with Chairperson Li, pursuant to which the Company borrowed RMB 4,770,000 (approximately $700,000). The loan bore interest at an annual rate of 4.35% and was originally due within one year of the date of the loan agreement. The maturity date has subsequently been extended annually on substantially identical terms and is currently due on July 9, 2027.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0; text-align: justify">On June 20, 2025, the Company borrowed RMB 1,750,000 (approximately US$257,000) from Chairperson Li. No interest was charged if the loan was repaid in full by December 31, 2025. On January 1, 2026, the loan began to accrue interest at a rate of 3.30% and is payable within one year of the loan agreement. The loan has been extended to June 20, 2027 with all other original terms unchanged.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0; text-align: justify">Total interest expense related to the three loans described above for the three months ended June 30, 2026 and 2025 were $9,306 and $6,771, respectively, and $18,391 and $13,558 for the six months ended June 30, 2026 and 2025, respectively. Executive compensation payable to the Chairperson Li, which is included in “Other payables” in the accompanying condensed consolidated balance sheets, totaled $1,883,506 and $1,875,506 as of June 30, 2026 and December 31, 2025, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0; text-align: justify">As of June 30, 2026, the outstanding balance of interest-free borrowings from Chairperson Li. was RMB 2.58 million ($378,344). These borrowings have no contractual maturity and are payable on demand, providing a source of short-term liquidity for the company.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.1pt; text-align: justify; text-indent: 0.25pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.1pt; text-align: justify; text-indent: 0.25pt">In June 2025, Chunming Dong, the husband of Chairperson Li, advanced RMB 1,000,000 ($142,272) to the Company for working capital purposes. The advance was interest free through December 31, 2025 and began accruing interest at an annual rate of 3.3% on January 1, 2026. Total interest related to the advance for the three months ended June 30, 2026 and 2025 was $1,206 and <span style="-sec-ix-hidden: hidden-fact-69">$0</span>, respectively, and $2,394 and $0 for the six months ended June 30, 2026 and 2025, respectively. The loan has been extended to June 20, 2027 with all other original terms unchanged. </p> 1000000 146823 0.03 P1Y 2027-06-24 1644857 1435136 4770000 700000 0.0435 P1Y 2027-07-09 1750000 257000 0.033 P1Y 2027-06-20 9306 6771 18391 13558 1883506 1875506 2580000 -378344 1000000 142272 0.033 1206 2394 0 2027-06-20 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><b>NOTE 8 – LINES OF CREDIT</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.1pt; text-align: justify"> 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.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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. </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Principal payments on the above lines of credit are all due within one year of the balance sheet date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.35pt; text-indent: -0.35pt"><b><i>Fair Value of Borrowings Under Lines of Credit </i></b>– 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.</p> 5000000 5000000 700000 0.036 6798 9676 13274 19595 10000000 1400000 0.0335 0.12 0.0325 0.029 551250 79000 1653750 238000 2026-09-20 3228728 9049 10912 18331 22234 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><b>NOTE 9 – LEASES</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25pt">The Company has leases for certain office and production facilities in the PRC which are classified as operating leases. The leases contain payment terms for fixed amounts. Options to extend are recognized as part of the lease liabilities and recognized as right of use assets when management estimates to renew the lease. There are no residual value guarantees, no variable lease payments, and no restrictions or covenants imposed by leases.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">June 30,<br/> 2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">December 31, <br/> 2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Lease liabilities, current portion</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">73,069</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">71,628</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Lease liabilities, non current portion</td><td style="font: bold 9pt Sans-Serif; color: Red"> </td> <td style="font: bold 9pt Sans-Serif; color: Red; text-align: left"> </td><td style="font: normal 10pt Times New Roman, Times, Serif; text-align: right">75,291</td><td style="font: bold 9pt Sans-Serif; color: Red; text-align: left"> </td><td style="font: bold 9pt Sans-Serif; color: Red"> </td> <td style="font: bold 9pt Sans-Serif; color: Red; text-align: left"> </td><td style="font: normal 10pt Times New Roman, Times, Serif; text-decoration: none; text-align: right">111,548</td><td style="font: bold 9pt Sans-Serif; color: Red; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">148,360</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">183,176</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Remaining Lease Term Operating Lease</td><td> </td> <td colspan="2" style="text-align: right">2 years</td><td> </td><td> </td> <td colspan="2" style="text-align: right">2.5 years</td><td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 76%; text-align: left">Discount rate</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">3</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">3.00</td><td style="width: 1%; text-align: left">%</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt">Minimum lease payments for the Company’s operating lease liabilities were as follows for the twelve-month period ended June 30: </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>2027</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: right">76,520</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>2028</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: right">76,520</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Total undiscounted cash flows</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 9%; text-align: right">153,040 </td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1.5pt">Less: Imputed interest</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(4,680 </td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: Lease liabilities, current portion</td> <td style="padding-bottom: 1.5pt"> </td> <td style="text-align: left"> </td> <td style="text-align: right">148,360 </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(73,069</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Lease liabilities, non current portion</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">75,291 </td> <td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.3pt">The Company has leases with terms of less than one year for certain provincial sales offices that are not material.</p> The leases contain payment terms for fixed amounts. Options to extend are recognized as part of the lease liabilities and recognized as right of use assets when management estimates to renew the lease. There are no residual value guarantees, no variable lease payments, and no restrictions or covenants imposed by leases.<table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">June 30,<br/> 2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">December 31, <br/> 2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Lease liabilities, current portion</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">73,069</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">71,628</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-align: left">Lease liabilities, non current portion</td><td style="font: bold 9pt Sans-Serif; color: Red"> </td> <td style="font: bold 9pt Sans-Serif; color: Red; text-align: left"> </td><td style="font: normal 10pt Times New Roman, Times, Serif; text-align: right">75,291</td><td style="font: bold 9pt Sans-Serif; color: Red; text-align: left"> </td><td style="font: bold 9pt Sans-Serif; color: Red"> </td> <td style="font: bold 9pt Sans-Serif; color: Red; text-align: left"> </td><td style="font: normal 10pt Times New Roman, Times, Serif; text-decoration: none; text-align: right">111,548</td><td style="font: bold 9pt Sans-Serif; color: Red; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">148,360</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">183,176</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Remaining Lease Term Operating Lease</td><td> </td> <td colspan="2" style="text-align: right">2 years</td><td> </td><td> </td> <td colspan="2" style="text-align: right">2.5 years</td><td> </td></tr> <tr style="vertical-align: bottom"> <td style="width: 76%; text-align: left">Discount rate</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">3</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">3.00</td><td style="width: 1%; text-align: left">%</td></tr> </table> Options to extend are recognized as part of the lease liabilities and recognized as right of use assets when management estimates to renew the lease. There are no residual value guarantees, no variable lease payments, and no restrictions or covenants imposed by leases. 73069 71628 75291 111548 148360 183176 P2Y P2Y6M 0.03 0.03 <p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt">Minimum lease payments for the Company’s operating lease liabilities were as follows for the twelve-month period ended June 30: </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>2027</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: right">76,520</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td>2028</td> <td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: right">76,520</td> <td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Total undiscounted cash flows</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td> <td style="width: 9%; text-align: right">153,040 </td> <td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1.5pt">Less: Imputed interest</td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(4,680 </td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less: Lease liabilities, current portion</td> <td style="padding-bottom: 1.5pt"> </td> <td style="text-align: left"> </td> <td style="text-align: right">148,360 </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: right">(73,069</td> <td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Lease liabilities, non current portion</td> <td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td> <td style="border-bottom: Black 4pt double; text-align: right">75,291 </td> <td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table> 76520 76520 153040 4680 148360 73069 75291 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><b>NOTE 10 – INCOME TAXES</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.05pt; text-align: justify; text-indent: 0.1pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.05pt; text-align: justify; text-indent: 0.1pt">Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect of a change in tax laws or rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0; text-align: justify; text-indent: 0.2pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0; text-align: justify; text-indent: 0.2pt">Liabilities are established for uncertain tax positions expected to be taken in income tax returns when such positions are judged to meet the “more-likely-than-not” threshold based on the technical merits of the positions. Estimated interest and penalties related to uncertain tax positions are included as a component of other expenses As of June 30, 2026 and December 31, 2025, the Company did <span style="-sec-ix-hidden: hidden-fact-70"><span style="-sec-ix-hidden: hidden-fact-71">not</span></span> have any significant unrecognized uncertain tax positions. U.S. income tax returns for the years ended December 31, 2021 through December 31, 2025 and the Chinese income tax return for the year ended December 31, 2025 remain open to examination by the relevant taxing authorities.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05pt">Under the current tax law in the PRC, the Company is subject to the enterprise income tax rate of 25%.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.05pt; text-align: justify; text-indent: 0.2pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.05pt; text-align: justify; text-indent: 0.2pt">There was <span style="-sec-ix-hidden: hidden-fact-72"><span style="-sec-ix-hidden: hidden-fact-73"><span style="-sec-ix-hidden: hidden-fact-74"><span style="-sec-ix-hidden: hidden-fact-75">no</span></span></span></span> provision for income taxes for the three and six months ended June 30, 2026 and 2025, respectively, as the Company did not generate taxable income during those periods.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.05pt; text-align: justify">As of June 30, 2026, Helpson had net operating loss carryforwards for PRC tax purposes of approximately $31.7 million which are available to offset any future taxable income through 2030. Approximately $4.2 million of these carryforwards will expire in December 2026. The Company also has net operating losses for United States federal income tax purposes of approximately $12.0 million of which $5.1 million is available to offset future taxable income, if any, through 2040, and $6.9 million are available for carryforward indefinitely subject to a limitation of 80% of taxable income for each tax year.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05pt; text-align: justify; text-indent: 0.3pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.05pt; text-align: justify; text-indent: 0.3pt"><span style="font-size: 10pt">On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The Company is currently assessing its impact on our condensed consolidated financial statements. U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.2pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.2pt">In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those differences become deductible, or tax loss carry forwards are utilized. Management considers projected future taxable income and tax planning strategies in making this assessment. Based upon an assessment of the level of historical taxable income and projections for future taxable income over the periods on which the deferred tax assets are deductible or can be utilized, management believes it is not likely for the Company to realize all benefits of the deferred tax assets as of June 30, 2026 and December 31, 2025. Accordingly, the Company recorded a valuation allowance against its deferred tax assets of $22.5 million and $21.2 million as of June 30, 2026 and December 31, 2025, respectively.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.35pt; text-indent: -0.05pt"> </p> <p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.35pt; text-indent: -0.05pt">The Company also incurred various other taxes, comprised primarily of business taxes, value-added taxes, urban construction taxes, education surcharges and others. Any unpaid amounts are reflected on the balance sheets as accrued taxes payable.</p> 0.25 31700000 4200000 12000000 5100000 6900000 0.80 0.35 0.21 22500000 21200000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><b>NOTE 11 – FAIR VALUE MEASUREMENTS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 180.5pt"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.15pt">Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, a hierarchy has been established which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities; Level 2 – Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data; and Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.2pt; text-align: justify; text-indent: 0.05pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.2pt; text-align: justify; text-indent: 0.05pt">The Company uses fair value to measure the value of the banker’s acceptance notes it holds as of June 30, 2026 and December 31, 2025. The banker’s acceptance notes are recorded at cost which approximates fair value. The Company held the following assets and liabilities recorded at fair value:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.2pt; text-align: justify; text-indent: 0.05pt"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="10" style="white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fair Value Measurements at</b></span></td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; layout-grid-mode: line; text-align: center"><b>June 30,</b></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Reporting Date Using</b></span></td> </tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Description</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2026</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 1</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 2</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 3</b></span></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 53%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Banker’s acceptance notes</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,825</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-76; font-family: Times New Roman, Times, Serif; font-size: 10pt"> -</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,825</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-77; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> </tr> <tr style="vertical-align: bottom"> <td style="layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,825</span></td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-78; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,825</span></td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-79; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> </tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.2pt; text-align: justify; text-indent: 0.05pt"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="10" style="white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fair Value Measurements at</b></span></td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; layout-grid-mode: line; text-align: center"><b>December 31,</b></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Reporting Date Using</b></span></td> </tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Description</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> 2025</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 1</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 2</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 3</b></span></td> </tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 53%; layout-grid-mode: line"><span style="-sec-ix-hidden: hidden-fact-80; font-family: Times New Roman, Times, Serif; font-size: 10pt">Banker’s acceptance notes</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%">                </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right">      <span style="-sec-ix-hidden: hidden-fact-81; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"> <span style="-sec-ix-hidden: hidden-fact-82; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"> <span style="-sec-ix-hidden: hidden-fact-83; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> </tr> <tr style="vertical-align: bottom; "> <td style="layout-grid-mode: line"><span style="-sec-ix-hidden: hidden-fact-84; font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-85; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-86; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-87; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> </tr> </table> The Company held the following assets and liabilities recorded at fair value:<table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="10" style="white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fair Value Measurements at</b></span></td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; layout-grid-mode: line; text-align: center"><b>June 30,</b></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Reporting Date Using</b></span></td> </tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Description</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>2026</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 1</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 2</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 3</b></span></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 53%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Banker’s acceptance notes</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,825</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-76; font-family: Times New Roman, Times, Serif; font-size: 10pt"> -</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,825</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-77; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> </tr> <tr style="vertical-align: bottom"> <td style="layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,825</span></td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-78; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,825</span></td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-79; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> </tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.2pt; text-align: justify; text-indent: 0.05pt"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="10" style="white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Fair Value Measurements at</b></span></td> </tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; layout-grid-mode: line; text-align: center"><b>December 31,</b></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="10" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Reporting Date Using</b></span></td> </tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Description</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b> 2025</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 1</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 2</b></span></td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td style="white-space: nowrap; layout-grid-mode: line; text-align: center"> </td> <td colspan="2" style="border-bottom: black 1.5pt solid; white-space: nowrap; layout-grid-mode: line; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Level 3</b></span></td> </tr> <tr style="vertical-align: bottom; background-color: #CCEEFF"> <td style="width: 53%; layout-grid-mode: line"><span style="-sec-ix-hidden: hidden-fact-80; font-family: Times New Roman, Times, Serif; font-size: 10pt">Banker’s acceptance notes</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%">                </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right">      <span style="-sec-ix-hidden: hidden-fact-81; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"> <span style="-sec-ix-hidden: hidden-fact-82; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="width: 1%; layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; width: 1%; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; width: 9%; layout-grid-mode: line; text-align: right"> <span style="-sec-ix-hidden: hidden-fact-83; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> </tr> <tr style="vertical-align: bottom; "> <td style="layout-grid-mode: line"><span style="-sec-ix-hidden: hidden-fact-84; font-family: Times New Roman, Times, Serif; font-size: 10pt">Total</span></td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid"> </td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-85; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-86; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> <td style="layout-grid-mode: line"> </td> <td style="layout-grid-mode: line"> </td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td> <td style="border-bottom: black 1.5pt solid; layout-grid-mode: line; text-align: right"><span style="-sec-ix-hidden: hidden-fact-87; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</span></td> </tr> </table> 1825 1825 1825 1825 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 12 – STOCKHOLDERS’ EQUITY</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.35pt; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.35pt; text-align: justify">China Pharma is authorized to issue 500,000,000 shares of common stock, $0.001 par value, and 5,000,000 shares of preferred stock, $0.001 par value. The preferred stock may be issued in series with such designations, preferences, stated values, rights, qualifications or limitations as determined solely by the Board of China Pharma.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.1pt; text-align: justify; text-indent: 0.25pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.1pt; text-align: justify; text-indent: 0.25pt">On February 5, 2026, the Company issued 12,400,000 shares of common stock at a price of $0.63 per share based on the closing market price as of that date pursuant to the Xiaoyun Chen Agreement as discussed in Note 5.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.85pt 0pt 0.1pt; text-align: justify; text-indent: 0.25pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.85pt 0pt 0.1pt; text-align: justify; text-indent: 0.25pt">On February 26, 2026, the Company issued 12,600,000 shares of common stock at a price of $0.57 per share based on the closing market price as of that date pursuant to the Xiaoyan Zhang Agreement as discussed in Note 5.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.35pt; text-indent: 0.25pt"> </p> <p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 1.05pt 0pt 0.35pt; text-indent: 0.25pt">Subsequent to quarter end, on July 22, 2026, the Company issued 2,500,000 shares pursuant to a securities purchase agreement with an institutional investor for a price of $2.00 per share as discussed more fully in Note 15.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.05pt; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.05pt; text-align: justify">According to relevant PRC laws, companies registered in the PRC, including China Pharma’s PRC subsidiary, Helpson, are required to allocate at least 10% of their after tax income, as determined under the accounting standards and regulations in the PRC, to statutory surplus reserve accounts until the reserve account balances reach 50% of the company’s registered capital prior to their remittance of funds out of the PRC. Allocations to these reserves and funds can only be used for specific purposes and are not transferrable to the parent company in the form of loans, advances or cash dividends. The amount designated for general and statutory capital reserves is <span style="-sec-ix-hidden: hidden-fact-88"><span style="-sec-ix-hidden: hidden-fact-89">nil</span></span> as of both June 30, 2026 and December 31, 2025. As of June 30, 2026 and December 31, 2025, the balance of the required statutory reserves was $<span style="-sec-ix-hidden: hidden-fact-90"><span style="-sec-ix-hidden: hidden-fact-91">nil</span></span>.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><i> </i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><i>2010 Incentive Plan</i></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05pt 0pt 0; text-align: justify; text-indent: 0.35pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05pt 0pt 0; text-align: justify; text-indent: 0.35pt">On November 12, 2010, the Company’s Board adopted the Company’s 2010 Incentive Plan (the “Plan”), which was then approved by stockholders on December 22, 2010. On October 17, 2019, the Board of Directors approved the First Amendment to the 2010 Incentive Plan (the “Amendment”), pursuant to which the term of the 2010 Incentive Plan was extended to December 31, 2029. The Amendment was adopted by the stockholders on December 19, 2019. On October 25, 2021, the Board of Directors approved, and on December 27, 2021, our stockholders adopted Amendment No.2 to the Plan to increase the number of shares of the Common Stock that are reserved thereunder by 10,000 shares from 8,000 shares to 18,000 shares. On October 27, 2022, the Board of Directors approved and on December 27, 2022, the stockholders adopted the Amended and Restated Long Term 2010 Incentive Plan to increase the number of shares of common stock that are reserved thereunder by an additional 10,000 shares from 18,000 to 28,000. On December 17, 2023, the stockholders approved Amendment No. 1 to the Amended and Restated Long Term 2010 Incentive Plan to increase the number of shares from 28,000 to 58,000. On December 22, 2024, stockholders approved Amendment No. 2 to the Amended and Restated Long Term 2010 Incentive Plan to increase the number of shares from 58,000 to 69,600. On December 30, 2025, the stockholders approved Amendment No. 3 to the Amended and Restated Long Term 2010 Incentive Plan to increase the number of shares from 69,600 to 569,600. The Plan gives the Company the ability to grant stock options, restricted stock, stock appreciation rights and performance units to its employees, directors and consultants, or those who will become employees, directors and consultants of the Company and/or its subsidiaries. The Plan currently allows for equity awards of up to 569,600 shares of common stock. Through June 30, 2026, there were 8,470 shares of stock granted under the Plan. A total of 1,330 options were outstanding as of June 30, 2026 under the Plan. As such, there are 559,800 additional units available for issuance under the Plan.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.05pt 0pt 0; text-align: justify; text-indent: 0.35pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.05pt; text-align: justify; text-indent: 0.2pt">No securities from the Plan for the three and six months ended June 30, 2026 and 2025, respectively, and no share-based compensation expense was recognized for those periods.</p> 500000000 0.001 5000000 0.001 12400000 0.63 12600000 0.57 2500000 2 0.10 0.50 10000 8000 18000 10000 18000 28000 28000 58000 58000 69600 69600 569600 569600 8470 1330 559800 0 0 0 0 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><b>NOTE 13 – LOSS PER SHARE</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.2pt; text-indent: 0.05pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.2pt; text-indent: 0.05pt">The following table presents the computation of basic and diluted net loss per share for the three and six months ended June 30, 2026 and 2025:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in"></td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Three Months Ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Six Months Ended <br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-decoration: none; font-style: normal; text-indent: -0.125in; padding-left: 0.125in; font-weight: normal"></td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>2025</b></td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-decoration: none; font-style: normal; text-indent: -0.125in; padding-left: 0.125in; font-weight: normal">Numerator:</td><td style="font-weight: bold"> </td> <td colspan="2" style="text-align: center; font-weight: bold"> </td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="text-align: center; font-weight: bold"> </td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="text-align: center; font-weight: bold"> </td><td style="font-weight: bold"> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; width: 52%; text-align: left; padding-bottom: 1.5pt">Net loss</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">(1,458,123</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">(528,367</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">(2,601,271</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">(1,313,939</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Denominator: Basic and diluted weighted-average common shares outstanding</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">40,522,002</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,226,156</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">34,087,748</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,261,956</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Basic and diluted loss per share</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(0.04</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-size: 10pt">(0.16)</span></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(0.08</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(0.40</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.2pt; text-indent: 0.05pt">The following table presents the computation of basic and diluted net loss per share for the three and six months ended June 30, 2026 and 2025:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <table cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%; border-spacing: 0px;"> <tr style="vertical-align: bottom"> <td style="text-indent: -0.125in; padding-left: 0.125in"></td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Three Months Ended<br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Six Months Ended <br/> June 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-decoration: none; font-style: normal; text-indent: -0.125in; padding-left: 0.125in; font-weight: normal"></td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2025</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2026</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="border-bottom: Black 1.5pt solid; text-align: center"><b>2025</b></td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-decoration: none; font-style: normal; text-indent: -0.125in; padding-left: 0.125in; font-weight: normal">Numerator:</td><td style="font-weight: bold"> </td> <td colspan="2" style="text-align: center; font-weight: bold"> </td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="text-align: center; font-weight: bold"> </td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="text-align: center; font-weight: bold"> </td><td style="font-weight: bold"> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; width: 52%; text-align: left; padding-bottom: 1.5pt">Net loss</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">(1,458,123</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">(528,367</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">(2,601,271</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">(1,313,939</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: transparent"> <td style="text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Denominator: Basic and diluted weighted-average common shares outstanding</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">40,522,002</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,226,156</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">34,087,748</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">3,261,956</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Basic and diluted loss per share</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(0.04</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><span style="font-size: 10pt">(0.16)</span></td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(0.08</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(0.40</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> </table> -1458123 -528367 -2601271 -1313939 40522002 40522002 3226156 3226156 34087748 34087748 3261956 3261956 -0.04 -0.04 -0.16 -0.16 -0.08 -0.08 -0.4 -0.4 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><b>NOTE 14 – COMMITMENTS AND CONTINGENCIES</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4pt"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4pt"><b>Current vulnerability due to certain concentrations</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.35pt; text-align: justify; text-indent: -0.2pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.35pt; text-align: justify; text-indent: -0.2pt">For the six months ended June 30, 2026, two customers accounted for 15.5% and 11.4% of sales, respectively, and three customers accounted for 32.9%, 19.4% and 15.9% of accounts receivable, respectively. During the same period, three suppliers accounted for 20.9%, 20.0% and 18.3% of raw material purchases, and four different products accounted for 25.9%, 18.6%, 18.6% and 18.6% of revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.95pt 0pt 0.3pt; text-align: justify; text-indent: -0.15pt">For the six months ended June 30, 2025, one customer accounted for 11.5% of sales and two customers accounted for 63.5% and 13.7% of accounts receivable. During the same period, three suppliers accounted for 24.9%, 19.4% and 16.4% of raw material purchases, and three different products accounted for 32.8%, 22.8% and 13.5% of revenue.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Nature of Operations</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.1pt; text-align: justify; text-indent: 0.1pt"><b>Economic environment -</b> Substantially all of the Company’s operations are conducted in the PRC, and therefore the Company is subject to special considerations and significant risks not typically associated with companies operating in the United States of America. These risks include, among others, the political, economic and legal environments and fluctuations in the foreign currency exchange rate. The Company’s results from operations may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. The unfavorable changes in global macroeconomic factors may also adversely affect the Company’s operations.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.3pt; text-align: justify; text-indent: -0.05pt"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 1pt 0pt 0.3pt; text-align: justify; text-indent: -0.05pt">In addition, all of the Company’s revenue is denominated in the PRC’s currency of Renminbi (RMB), which must be converted into other currencies before remittance out of the PRC. Both the conversion of RMB into foreign currencies and the remittance of foreign currencies abroad require approval of the PRC government.</p> 0.155 0.114 0.329 0.194 0.159 0.209 0.20 0.183 0.259 0.186 0.186 0.186 0.115 0.635 0.137 0.249 0.194 0.164 0.328 0.228 0.135 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15pt"><b>NOTE 15 – SUBSEQUENT EVENTS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subsequent to quarter end, on July 22, 2026, the Company entered into a securities purchase agreement (the “Securities Agreements”) with an institutional investor to purchase an aggregate of 2,500,000 shares of common stock of the Company at a purchase price of $2.00 per share and received net proceeds on July 23, 2026 totaling $4,425,000. The Company paid commissions of $350,000, representing 7% of the gross proceeds of $5,000,000 and incurred legal and other transaction costs of $225,000.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the terms of the Securities Purchase Agreement, the Company and the Buyers have agreed that (i) from July 22, 2026 until the date that is the three (3) months anniversary of the closing date, or the date on which all of the transaction documents have been executed and delivered by the applicable parties thereto, the investor shall have the right to participate in up to an amount equal to 40% of the subsequent financings upon any issuance by the Company or any its subsidiaries, on the same terms, conditions and price provided for any such subsequent financings; (ii) subject to certain exceptions, the Company will not, from July 22, 2026 until the ninety-first (91st) calendar days anniversary of the closing date , enter into any agreement to issue or announce the issuance or disposition or proposed issuance or disposition of any securities (each, a “Subsequent Placement”); (iii) from the signing date until the ninety-first (91st) calendar days anniversary of the closing date , the Company will not enter into an agreement to effect a “Variable Rate Transaction,” as that term is defined in the Securities Purchase Agreement.</p> 2500000 2 4425000 350000 0.07 5000000 225000 0.40 false false false false +86 898-6681-1730 0001106644 false Q2 --12-31 - Less than $1 Represents $44,000 of compensation payable to two members of the Company’s Board of Directors and executive compensation to Chairperson Li totaling $1,883,506 as of June 30, 2026 and $1,875,506 executive compensation to Chairperson Li as of December 31, 2025, respectively. Represents non-interest borrowings from Helpson’s Labor Union otained in November 2024, with no specified repayment terms. Represents an advance made to the Company in June 2025 from Chunming Dong, the husband of Chairperson Li. The advance was non-interest-bearing until December 31, 2025. Effective January 1, 2026, bears interest at 3.3% per annum.