Exhibit 99.1
PLANET IMAGE INTERNATIONAL LIMITED
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
F-1
PLANET IMAGE INTERNATIONAL LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amount in thousands of U.S. dollars, except for share and per share data)
| As of December 31, | As of June 30, |
|||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Short-term investments | ||||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | | | ||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | ||||||||
| Right-of-use assets, net | ||||||||
| Long-term investments | ||||||||
| Other non-current assets | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Short-term bank borrowings | $ | $ | ||||||
| Current portion of a long-term bank borrowing | ||||||||
| Accounts payable | ||||||||
| Bank acceptance notes payable | ||||||||
| Amounts due to a related party – current | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Operating lease liabilities – current | ||||||||
| Taxes payable | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Operating lease liabilities – non-current | ||||||||
| Deferred tax liabilities, net | ||||||||
| Long-term bank borrowings | ||||||||
| Total non–current liabilities | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity | ||||||||
| Preferred shares (par value of HK$ | ||||||||
| Class A ordinary shares (par value of HK$ | ||||||||
| Class B ordinary shares (par value of HK$ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserve | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive income | ||||||||
| Total shareholders’ equity | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
PLANET IMAGE INTERNATIONAL LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Amount in thousands of U.S. dollars, except for share and per share data)
| For the six months ended June 30, |
||||||||
| 2025 | 2026 | |||||||
| Net revenues | $ | $ | ||||||
| Cost of revenues | ( | ) | ( | ) | ||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income/(expenses): | ||||||||
| Other non-operating income, net | ||||||||
| Government subsidy | ||||||||
| Fair value loss on derivative instruments | ( | ) | ||||||
| Foreign exchange gain/(loss) | ( | ) | ||||||
| Interest expense, net | ( | ) | ( | ) | ||||
| Total other income, net | ||||||||
| Loss before income tax expense | ( | ) | ( | ) | ||||
| Income tax expense | ( | ) | ( | ) | ||||
| Net loss | ( | ) | ( | ) | ||||
| Other comprehensive income | ||||||||
| Foreign currency translation adjustment | ||||||||
| Total comprehensive loss | $ | ( | ) | ( | ) | |||
| Net loss per share | ||||||||
| Basic and diluted | ( | ) | ( | ) | ||||
| Weighted average shares | ||||||||
| Basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
PLANET IMAGE INTERNATIONAL LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN SHAREHOLDERS’ EQUITY
(Amount in thousands of U.S. dollars, except for share and per share data)
| Class A Ordinary shares* |
Class B Ordinary shares* |
Additional paid-in |
Statutory | Retained | Accumulated other comprehensive |
Total shareholder’s |
||||||||||||||||||||||||||||||
| Share | Amount | Share | Amount | capital | reserve | earnings | income | equity | ||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | ||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | | $ | | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
PLANET IMAGE INTERNATIONAL LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amount in thousands of U.S. dollars, except for otherwise noted)
| For the six months ended June 30, |
||||||||
| 2025 | 2026 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Change in allowance for credit losses | ( | ) | ||||||
| Provision for inventory reserve | ||||||||
| Depreciation | ||||||||
| Amortization of right-of-use assets | ||||||||
| Share-based compensation | ||||||||
| Loss from the disposal of property, plant and equipment | ||||||||
| Unrealized exchange loss/(gain) | ( | ) | ||||||
| Fair value gain on derivative instruments | ( | ) | ||||||
| Deferred income tax benefits | ( | ) | ||||||
| Interest income from the loan to a third party | ( | ) | ||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Other non-current assets | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Notes payable | ( | ) | ( | ) | ||||
| Amount due to a related party | ( | ) | ||||||
| Accrued expenses and other current liabilities | ( | ) | ( | ) | ||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Taxes payable | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Payments for acquisition of property, plant and equipment | ( | ) | ( | ) | ||||
| Proceeds from disposal of subsidiaries | ||||||||
| Purchase of short-term investments | ( | ) | ( | ) | ||||
| Purchase of long-term investments | ( | ) | ||||||
| Proceeds from sales of short-term investments | ||||||||
| Loan to a third party | ( | ) | ||||||
| Net cash provided by/(used in) investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from bank loans | ||||||||
| Repayments of bank loans | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes | ( | ) | ||||||
| Net increase/(decrease) in cash and restricted cash | ( | ) | ||||||
| Cash and restricted cash, at beginning of the period | ||||||||
| Cash and restricted cash, at end of the period | $ | $ | ||||||
| The following table provides a reconciliation of cash and restricted cash reported within the Unaudited Condensed Consolidated Balance Sheets that sum to the same amounts shown in the Unaudited Condensed Consolidated Statements of Cash Flows: | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash and restricted cash shown in the Unaudited Condensed Consolidated Statements of Cash Flows | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for income tax | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INFORMATION: | ||||||||
| Obtaining right-of-use assets in exchange for operating lease liabilities | $ | $ | ||||||
| Acquisition of property and equipment included in accounts payable | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 1. | ORGANIZATION AND PRINCIPAL ACTIVITIES |
| (a) | Principal activities |
Planet Image International Limited (“Planet Image” or the “Company”) was incorporated in the Cayman Islands on August 5, 2019 under the Cayman Islands Companies Act. The Company, through its consolidated subsidiaries (collectively, the “Group”), is principally engaged in the manufacturing and sale of compatible toner cartridges with its manufacturing facilities based in the People’s Republic of China (the “PRC” or “China”). The majority of the Company’s products are sold in the North America, Europe and Asia, including on an original design manufacturer (“ODM”) basis and throughout distributors.
| (b) | Organization |
Planet Image was incorporated as an ultimate holding company in the Cayman Islands on August 5, 2019.
Planet Image owns
Aster Graphics Company Limited (“Aster HK”), a wholly-owned subsidiary of Aster Industrial, and Aster Online Company Limited (“Aster Online”), a wholly-owned subsidiary of Lucky Knot, were both incorporated under the laws of the Special Administrative Region of Hong Kong (“Hong Kong”), while Aster Graphics, Inc. (“Aster US”), a company incorporated in the State of California in March 2011 and Aster Technology Holland B.V. (“Aster NL”), a company incorporated in the Netherlands in July 2011, were both
Jiangxi Yibo E-Tech Co., Ltd. (“Jiangxi Yibo”) was established under the laws of the PRC in January 2011 and along with its subsidiaries, are the Group’s main operating entities in China.
Prior to the Reorganization (as defined below) described below, Jiangxi Yibo was controlled by several individual shareholders. A reorganization of the Company’s legal structure (“Reorganization”) was completed in March 2020. The Reorganization involved the following major events:
| ● | Formation of Planet Image, Aster BVI, Aster Industrial, Lucky Knot, Aster HK and Aster Online; |
| ● | Transfer of |
| ● | Transfer of |
| ● | Transfer of |
F-6
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 1. | ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.) |
| (b) | Organization (cont.) |
Upon the completion of the above Reorganization, Planet Image became the ultimate holding company of the Group. The Company is effectively controlled by the same group of shareholders before and after the Reorganization and therefore the Reorganization is considered as a recapitalization of these entities under common control.
The details of the Company’s major subsidiaries as of June 30, 2026 are as follows.
| Major Subsidiaries | Date of incorporation | Place of incorporation | Percentage of direct ownership | Principal activities | ||||||
| Aster BVI | % | |||||||||
| Lucky Knot Limited | % | |||||||||
| Aster Industrial Limited | % | |||||||||
| Aster Online | % | |||||||||
| Aster HK | % | toner cartridges | ||||||||
| Aster Graphics, Inc. (“Aster U.S.”) | % | |||||||||
| Aster NL | % | |||||||||
| Jiangxi Yibo | % | |||||||||
| Aster Germany | % | |||||||||
| Aster Italy | % | cartridges in Europe | ||||||||
| Aster France | % | cartridges in Europe | ||||||||
| Jiangxi Leibotai Electronic Technology Co., Ltd. (“Jiangxi Leibotai”) | % | services in the PRC | ||||||||
| Yantuo (Guangdong) Technology Co., Ltd. (“Yantuo”)(1) | % | |||||||||
| Planet Image International Electronic Technology Shenzhen Co., Ltd. (formerly known as Shenzhen Dinghong Shengda E-commerce Co., Ltd.) | % | |||||||||
| Aster Technology UK Ltd. (“Aster UK”) | % | cartridges in Europe | ||||||||
| Peony Trade Co., Limited | % | |||||||||
| White Poplar Co., Limited | % | |||||||||
| Joyful Product Trade Co., Limited | % | |||||||||
| Grand Future Trade Co., Limited | % | |||||||||
| Oriental Poetry Co., Limited | % | |||||||||
| Prosperity Product Trade Co., Limited | % | |||||||||
| Atlantic Marketing Co., Limited | % | |||||||||
| (1) |
F-7
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
| (a) | Basis of presentation |
The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of the Company’s financial position, its results of operations and its cash flows, as applicable, have been made. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. The accompanying unaudited condensed financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the years ended December 31, 2024 and 2025 appearing in the Company’s annual report on Form 20-F for the year ended December 31, 2025.
The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. For consolidated subsidiaries where the Company’s ownership in the subsidiary is less than
| (b) | Use of estimates |
The preparation of the unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues and expenses during the reported periods in the unaudited condensed consolidated financial statements and accompanying notes. Significant accounting estimates include, but not limited to, allowance for credit loss, impairment provision for inventories, useful lives and impairment of long-lived assets, determination of the fair value of derivative instruments and derivative liability arising from foreign exchange forward contracts, accounting for deferred income taxes and valuation allowance for deferred tax assets. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the unaudited condensed consolidated financial statements.
| (c) | Foreign currencies and foreign currency translation |
The functional and reporting currency of the Company is the United States Dollar (“US$”). The Company’s operating subsidiaries in China, Europe and the United States use their respective currencies, Renminbi (“RMB”), Pound (“GBP”), Euro (“EUR”) and US$, as their functional currencies.
The financial statements of Planet Image and its subsidiaries, other than subsidiaries with functional currency of US$, are translated into US$ using the exchange rate as of the balance sheet date for assets and liabilities and average exchange rate for the year for income and expense items. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution.
Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the unaudited condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income included in unaudited condensed consolidated statements of changes in shareholders’ equity. Gains and losses from foreign currency transactions are included in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss.
F-8
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) |
| (c) | Foreign currencies and foreign currency translation (cont.) |
The following table outlines the currency exchange rates that were used in preparing the unaudited condensed consolidated financial statements:
| As of December 31, 2025 | As of June 30, 2026 | |||
| Period end RMB: USD exchange rate | US$1=RMB | US$1=RMB | ||
| Period end EUR: USD exchange rate | US$1=EUR | US$1=EUR | ||
| Period end GBP: USD exchange rate | US$1=GBP | US$1=GBP |
| For the six months ended June 30, | ||||
| 2025 | 2026 | |||
| Average RMB: USD exchange rate | US$1=RMB | US$1=RMB | ||
| Average EUR: USD exchange rate | US$1=EUR | US$1=EUR | ||
| Average GBP: USD exchange rate | US$1=GBP | US$1=GBP | ||
| (d) | Accounts Receivable, net |
Accounts receivables are recognized in the period when the Group has sold products to its customers and when its right to consideration is unconditional. The Group adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement on Credit Losses on Financial Instruments”, including certain subsequent amendments, transitional guidance and other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03 (collectively, including ASU 2016-13, “ASC 326”) on January 1, 2023 using the modified retrospective transition approach. ASC 326 introduces an approach based on expected losses to estimate the allowance for credit losses, which replaces the previous incurred loss impairment model. The adoption of the new standard did not have a material effect on the Group’s unaudited condensed consolidated financial statements.
Account receivables are stated net of provision of credit losses. The Group has developed a current expected credit loss (“CECL”) model based on historical experience, the age of the accounts receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The Group considers historical collection rates, current financial status, macroeconomic factors, and other industry-specific factors when evaluating for current expected credit losses.
F-9
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) |
| (e) | Inventories |
Inventories primarily consist of raw materials, goods in transit, work in progress and finished goods, are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. Cost of inventory is determined by using the weighted average cost method. The Group writes down the cost of obsolete and slow-moving inventories to the estimated net realizable value, based on inventory obsolescence trends, historical experience, forecasted consumer demand and application of the specific identification method. As of December 31, 2025 and June 30, 2026, $
| (f) | Revenue recognition |
The Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) on January 1, 2019 and the Company’s revenue recognition policies are presented as below.
The Group’s revenues are mainly generated from the sales of compatible toner cartridges through offline and online channels. The Group provides products: (i) to offline overseas customers who own their brands on an ODM basis; (ii) to offline overseas dealers who primarily sell its self-branded products and white-label products to end consumers; and (iii) directly to customers on a retail basis under its self-owned brands through online retail platforms. There is no major difference in terms of product capability between the Company’s ODM products, white-label products, and self-own brand products, and the main difference lies in product packaging and pricing.
The Group usually enters into sales orders with customers or receives online sales orders, in which the Group identifies the only performance obligation is to transfer the promised products stated in the sales order. The Group performs shipping services before the products are delivered to the place designated by customers. Shipping service is determined as an activity to fulfill the Group’s promise to transfer the products, rather than another distinct performance obligation as it is performed before the customers obtain control of the products. In the normal course of business, the Group’s warranties are limited to product specifications, and the Company does not accept product returns unless the item is defective as manufactured. Accordingly, warranty costs are treated as a cost of fulfillment subject to accrual, rather than a performance obligation. The Company establishes provisions for both estimated returns and warranties when revenues are recognized.
Revenues represent the amount of consideration that the Group is entitled to, including products settlement price, net of value-added tax (“VAT”), surcharges, discounts and returns, if any. The transaction price is variable as adjusted by return allowances, rebates, which the Group estimates by using the expected value method and updates to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period. The Group considers itself a principal as it self-produces all the products. The Group recognizes revenue from the sales of compatible toner cartridges at a point in time when the control of products is transferred to the customers upon customers’ acceptance on a gross basis. Payment is usually required within four months after the issuance of invoice for offline customers and the consideration of online orders is collected in advance of shipment by online platform. Therefore, it is probable that the Group will collect substantially all of the consideration without existence of any significant financing component.
Disaggregation of Revenues
The Group disaggregates its revenues from contracts by sales channel and region, as the Group believes it best depicts how the nature, amount, timing and uncertainty of the revenues and cash flows are affected by economic factors. The Group’s disaggregation of revenues for the six months ended June 30, 2025 and 2026 are disclosed in Note 18 of these unaudited condensed consolidated financial statements.
F-10
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) |
| (f) | Revenue recognition (cont.) |
Contract Balances
When either party to a revenue contract has performed, the Group presents the contract in the unaudited condensed consolidated balance sheet as a contract asset or a contract liability, depending on the relationship between the Group’s performance and the customer’s payment. The Group merely incurs cost to obtain a contract with a customer. The Group presents any unconditional rights to consideration separately as a receivable. The Group does not have any contract assets. The balance of accounts receivable, net of allowance for credit loss were $
The Group presents the consideration that a customer pays before the Group transfers products to the customer as a contract liability (advances from customers) when the payment is made. Advances from customers is the Group’s obligation to transfer products to a customer for which the Group has received consideration from the customer. As of December 31, 2025 and June 30, 2026, the balance of advances from customers amounted to $
| (g) | Share-based Compensation |
The Group applies ASC 718, Compensation—Stock Compensation (“ASC 718”), to account for all of its share-based payments. In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or equity award. All the Group’s grants of share-based awards without vesting conditions were classified as equity awards and are recognized in the financial statements based on their grant date fair value.
| (h) | Concentration of risk |
Financial instruments that potentially subject the Group to significant concentration of credit risk consist primarily of cash, restricted cash and accounts receivable. As of December 31, 2025 and June 30, 2026, the aggregate amounts of cash and restricted cash of $
The Group’s exposure to credit risk associated with its trading and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. Substantially all of the Group’s sales are made to customers located primarily in the U.S., Europe and Asia. The Company’s operating results could be adversely affected by government policies in the PRC on export business, foreign exchange rate fluctuations, and changes in local market conditions. No customer individually represented more than 10% of the Group’s total revenues for the six months ended June 30, 2025. For the six months ended June 30, 2026, approximately
The Company’s inventory purchases from Supplier A accounted for approximately
F-11
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) |
| (i) | Recent accounting pronouncements |
In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) which requires detailed disclosures in the notes to financial statements disaggregating specific expense categories and certain other disclosures to provide enhanced transparency into the nature and function of expenses. The FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements should be applied on a prospective basis while retrospective application is permitted. The Group does not expect to early adopt this guidance and does not expect the adoption of this ASU to have a material impact on its future consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The amendments in ASU 2025-05 provide entities with a practical expedient to simplify the estimation of expected credit losses on current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers (“ASC 606”) by allowing the assumption that current conditions as of the balance sheet date will not change during the remaining life of the asset. ASU 2025-05 is effective for the Company for its annual reporting periods beginning July 1, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Group is currently evaluating the impact ASU 2025-05 will have on its future consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles -Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027 and for interim reporting periods beginning in that fiscal year. The Group is currently evaluating the impact ASU 2025-06 will have on its future consolidated financial statements.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (“Topic 815”) and Revenue from Contracts with Customers (“Topic 606”): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (“ASU 2025-07”). ASU 2025-07 expands an existing scope exception under Topic 815 to exclude non-exchange-traded contracts where the underlying is based on the operations or activities specific to one of the contract parties. ASU 2025-07 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The Group is currently evaluating the impact ASU 2025-07 will have on its future consolidated financial statements.
In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (“Topic 326”): Purchased Loans (“ASU 2025-08”). The amendments expand the population of acquired loans subject to the gross-up approach, treating non-credit-deteriorated loans (excluding credit cards) as “seasoned” if purchased at least 90 days after origination or acquired in a business combination. ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Group is currently evaluating the impact ASU 2025-08 will have on its future consolidated financial statements.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”). The amendments establish the accounting for a government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income. ASU 2025-10 is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Group is currently evaluating the impact of adopting ASU 2025-10.
F-12
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) |
| (i) | Recent accounting pronouncements (cont.) |
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Improvements to Interim Disclosure Requirements (“ASU 2025-11”). The amendments clarify disclosure requirements for interim financial statements. ASU 2025-11 is effective for interim periods beginning after December 15, 2026. Early adoption is permitted. The Group is currently evaluating the impact of adopting ASU 2025-11.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”). ASU 2025-12 addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. Early adoption is permitted. The Group is currently evaluating the impact of adopting ASU 2025-12.
Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption.
The Group does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its unaudited condensed consolidated financial condition, results of operations, cash flows or disclosures.
| 3. | DISPOSAL OF SUBSIDIARIES |
In 2025, the Group disposed ten in-direct subsidiaries (the “Disposed Subsidiaries”), all of which were engaged in providing products directly to customers on a retail basis under its self-owned brands through online retail platforms, as well as three trademark assignments related to the online retail business operations. On December 30, 2025, the Board of Directors of the Company formally authorized the plan to dispose of the Disposed Subsidiaries and the related registered trademarks to a third party. Following this authorization, the Group executed definitive disposal agreements with the purchaser on December 31, 2025, to transfer
The sale of the Disposed Subsidiaries did not represent a strategic shift that has or will have a major effect on the Group’s operations or financial results, given its limited financial impact, in accordance with ASC 205-20-45-1A to 45-1C. Accordingly, the disposal was not presented as discontinued operations, and the results thereof were included in continuing operations for all periods presented.
Details of the entities disposed were as follows:
| Disposed subsidiaries | Total assets | Total liabilities | Total net (liabilities)/assets | |||||||||
| Your Office Supplies Company Limited | $ | $ | $ | ( | ) | |||||||
| Amstech Limited | ( | ) | ||||||||||
| Aztech Enterprise Limited | ( | ) | ||||||||||
| Supplies4U Limited | ( | ) | ||||||||||
| Dellon Technology Company Limited | ( | ) | ||||||||||
| Iprint Enterprise Limited | ( | ) | ||||||||||
| REVOL TRADING INC. | ||||||||||||
| Eco Imaging Inc. | ( | ) | ||||||||||
| Intercon International CORP. | ( | ) | ||||||||||
| Proimage B.V. | ( | ) | ||||||||||
| Total | $ | $ | $ | ( | ) | |||||||
The total consideration was $
F-13
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 4. | ACCOUNTS RECEIVABLE, NET |
Accounts receivable consisted of the following:
| As of December 31, | As of June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Accounts receivable | $ | $ | ||||||
| Allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
The movement of allowance of credit losses was as follows:
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at beginning of the periods presented | $ | $ | ||||||
| Addition/(reversal) in credit losses | ( | ) | ||||||
| Write off | ( | ) | ||||||
| Foreign currency translation adjustment | ||||||||
| Balance at end of the periods presented | $ | $ | ||||||
The Group recorded a credit loss of $
The majority of accounts receivable are expected to be recovered within six months. The aging of accounts receivable is calculated from the expiration date of the customer’s credit terms, which differs from the aging of accounts receivable based on the number of days past invoice date. The Group generally grants trade debtors a credit period of
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| (Unaudited) | ||||||||
| Not overdue | $ | $ | ||||||
| Within 90 days | ||||||||
| Between 3 and 6 months | ||||||||
| Between 6 months and a year | ||||||||
| Over a year | ||||||||
| $ | $ | |||||||
F-14
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 5. | INVENTORIES |
Inventories consisted of the following:
| As of December 31, | As of June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Raw materials | $ | $ | ||||||
| Goods in transit | ||||||||
| Work in progress | ||||||||
| Finished goods | ||||||||
| Inventories | $ | $ | ||||||
As of December 31, 2025 and June 30, 2026, $
| 6. | PREPAID EXPENSES AND OTHER CURRENT ASSETS |
Prepaid expenses and other current assets consisted of the following:
| As of December 31, | As of June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Loan to a third party (a) | $ | $ | ||||||
| Export input VAT receivables (b) | ||||||||
| Advances to suppliers | ||||||||
| Insurance receivables on written-off accounts receivables (c) | ||||||||
| Interest receivable | ||||||||
| Security deposits | ||||||||
| Employee receivables and business advances | ||||||||
| Receivable from third parties (d) | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
| (a) |
| (b) |
| (c) |
| (d) |
F-15
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 7. | PROPERTY, PLANT AND EQUIPMENT, NET |
Property, plant and equipment consisted of the following:
| As of December 31, | As of June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Machinery and equipment | $ | $ | ||||||
| Building improvement | ||||||||
| Land use rights | ||||||||
| Office equipment, furniture and fixtures | ||||||||
| Automobiles | ||||||||
| Total | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
Depreciation expense was $
As of December 31, 2025 and June 30, 2026, land use rights owned by Jiangxi Yibo, a subsidiary of the Company, with carrying values of $
| 8. | INVESTMENTS |
Investments consisted of the following:
| As of December 31, | As of June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Fixed deposit receipt, current | $ | $ | ||||||
| Total short-term investments | ||||||||
| Fixed deposit receipt, non-current | ||||||||
| Total long-term investments | ||||||||
| Total investments | $ | $ | ||||||
As of December 31, 2025, an amount of $
As of June 30, 2026, $
F-16
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 9. | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
Accrued expenses and other current liabilities consisted of the following:
| As of December 31, | As of June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Accrued expenses (a) | $ | $ | ||||||
| Accrued payroll and employee benefits | ||||||||
| Advances from customers (b) | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
| (a) |
| (b) |
| 10. | BORROWINGS |
The principal of the borrowings is due at maturity. Accrued interest is due either monthly or quarterly. The bank borrowings were for working capital and capital expenditure purposes.
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| (Unaudited) | ||||||||
| Bank of China Xinyu Branch (a) | $ | $ | ||||||
| Export-Import Bank of China Jiangxi Branch (b) | ||||||||
| Agricultural Bank of China Xinyu Branch (c) | ||||||||
| Xinyu Rural Commercial Bank Gaoxin Branch (d) | ||||||||
| Total short-term borrowings | ||||||||
| Industrial and Commercial Bank of China Limited Xinyu High Tech Branch (e) | ||||||||
| Total long-term borrowing, current | ||||||||
| Industrial and Commercial Bank of China Limited Xinyu High Tech Branch (e) | ||||||||
| Total long-term borrowing, non-current | ||||||||
| Total Borrowings | $ | $ | ||||||
| (a) |
| (b) |
F-17
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 10. | BORROWINGS (cont.) |
| (c) |
| (d) |
| (e) |
| Year ending December 31, | Repayment amount | |||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total | $ | |||
Interest expenses were $
As of June 30, 2026, the Group had unutilized lines of credit aggregating $
| 11. | LEASES |
The leases of the Company were classified as operating leases mainly for offices and staff dormitories. Rent expense is recognized on a straight-line basis over the lease term. The discount rate was set with reference to the loan prime rate published by the Bank of China.
Supplemental balance sheet information related to operating lease was as follows:
| As of December 31, | As of June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Right-of-use assets | $ | $ | ||||||
| Operating lease liabilities – current | $ | $ | ||||||
| Operating lease liabilities – non-current | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
The weighted average remaining lease terms and discount rates for the operating lease as of June 30, 2026, were as follows:
| Remaining lease term and discount rate: | ||||
| Weighted average remaining lease term (years) | ||||
| Weighted average discount rate | % | |||
The Group recognized operating lease expense of $
F-18
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 11. | LEASES (cont.) |
The following is a schedule of future minimum payments under the Company’s operating leases as of June 30, 2026:
| For the fiscal years ended December 31, | Amounts | |||
| Remainder of 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Total operating lease liabilities, net of interest | $ | |||
| 12. | SHARE BASED COMPENSATION |
2025 Equity Incentive Plan
Effective May 9, 2025, the board of directors of the Company approved the 2025 Equity Incentive Plan (the “Plan”), to attract and retain the best available personnel for positions of responsibility with the Group, to provide additional incentives to them and align their interests with those of the Company’s shareholders, and to thereby promote the Group’s long-term business success. On May 28, 2025,
In accordance with ASC 718, share-based compensation transactions with employees are measured based on the grant-date fair value of the equity instruments awarded. The Company determined the fair value of the Class A ordinary shares granted under the Plan to be $
As the equity awards were fully vested on the grant date and did not contain any future service or performance conditions, the Group recognizes the entire fair value of the award as compensation expense on the date of grant.
For the six months ended June 30, 2025, the share-based compensation expenses were $
A summary of activities of the restricted shares for the six months ended June 30, 2025 and 2026 is as follows:
| Number of nonvested restricted shares | ||||
| In thousand | ||||
| (Unaudited) | ||||
| Unvested on December 31, 2024 | $ | |||
| Granted | ||||
| Vested | ( | ) | ||
| Unvested on June 30, 2025 | $ | |||
The allocation of total share-based compensation expenses is as follows:
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| General and administrative expenses | $ | | $ | |||||
| Research and development expenses | ||||||||
| Total | $ | $ | ||||||
F-19
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 13. | TAX |
The Cayman Islands and the BVI
The Company was incorporated in the Cayman Islands and several of its wholly-owned subsidiaries were incorporated in the BVI. Under the current laws of the Cayman Islands and the BVI, these entities are not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholding tax in the Cayman Islands and the BVI.
Hong Kong
According to the Tax (Amendment) (No. 3) Ordinance 2018 published by the Hong Kong government, effective April 1, 2018, under the two-tiered profits tax regime, the profits tax rate for the first HKD
United States
On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”) which significantly changed previous U.S. tax laws, including a reduction of corporate income tax rate from
The Company’s U.S. subsidiaries file income tax returns with the Internal Revenue Service and are subject to income tax examinations by the IRS and applicable state tax authorities.
For the six months ended June 30, 2025 and 2026, the U.S. federal statutory corporate income tax rate applicable to the Group’s U.S. subsidiaries was
The IRS generally may examine tax returns filed within the preceding three years. However, in cases where a substantial understatement of income is identified, the statute of limitations may be extended to six years.
Europe
The Company’s subsidiaries, which were mainly incorporated in European Union (“EU”) countries, such as the Netherlands, Italy, and France, are subject to enterprise income tax on their respective taxable income as determined under the applicable tax laws and accounting standards at rates ranging from
The PRC
Generally, the Company’s subsidiaries that are considered PRC resident enterprises under PRC tax law, are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of
In accordance with the implementation rules of the Enterprise Income Tax Law of the PRC (the “EIT Law”), a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of
As a result of the above preferential income tax rate, the aggregate tax savings of the Group were $
F-20
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 13. | TAX (cont.) |
The Group’s loss before income tax expense consisted of:
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| PRC | $ | ( | ) | $ | ( | ) | ||
| Non-PRC | ||||||||
| Loss before income tax expense | $ | ( | ) | $ | ( | ) | ||
The income tax provision consisted of the following components:
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Current income tax expense | $ | ( | ) | $ | ( | ) | ||
| Deferred income tax benefit/(expense) | ( | ) | ||||||
| Total income tax expense | $ | ( | ) | $ | ( | ) | ||
The PRC
A reconciliation of the Group’s PRC statutory tax rate to the effective income tax rate during the periods is as follows:
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Computed income tax expense with PRC statutory tax rate | % | % | ||||||
| Non-deductible items | ( | )% | ( | )% | ||||
| Additional deduction of qualified R&D expenditures | % | % | ||||||
| Effect of tax holiday and preferential tax rate | ( | )% | ( | )% | ||||
| Changes in valuation allowance | ( | )% | ( | )% | ||||
| Effect of income tax rate differences in jurisdictions other than the PRC | % | % | ||||||
| Effective income tax rate | ( | )% | ( | )% | ||||
| * | The PRC statutory tax rate is used because the Group’s headquarters and primary management activities are located in PRC. |
F-21
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 13. | TAX (cont.) |
In accordance with the updated requirements of ASU No. 2023-09 for the six months ended June 30, 2026, a reconciliation between the statutory rate and the Group’s effective income tax rate is as follows (in thousands, except percentages):
| For the six months ended June 30, 2026 | ||||||||
| Amount | Percent | |||||||
| Statutory rate | $ | % | ||||||
| Foreign tax effects | ||||||||
| North America | ||||||||
| Statutory tax rate difference between North America and Chinese mainland | ( | ) | ( | )% | ||||
| Europe | ||||||||
| Statutory tax rate difference between Europe and Chinese mainland | % | |||||||
| Other foreign jurisdictions | % | |||||||
| Changes in valuation allowance | ( | ) | ( | )% | ||||
| Non-deductible items | ( | ) | ( | )% | ||||
| Additional deduction of qualified R&D expenditures | % | |||||||
| Effect of preferential tax rate of HNTE | ( | ) | ( | )% | ||||
| Effective income tax rate | $ | ( | ) | ( | )% | |||
The per share effect of the tax holiday was as follows:
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Tax holiday effect | $ | $ | ||||||
| Effect of tax holiday on basic net income per share | ||||||||
| Effect of tax holiday on diluted net income per share | ||||||||
As of December 31, 2025 and June 30, 2026, the significant components of the deferred tax assets and deferred tax liability were summarized below:
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| (Unaudited) | ||||||||
| Allowance for inventories and others | $ | $ | ||||||
| Net operating loss carried forward | ||||||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, net of valuation allowance | $ | $ | ||||||
| Deferred tax liability: | ||||||||
| Accelerated tax depreciation and others | $ | ( | ) | $ | ( | ) | ||
| Total deferred tax liability | $ | ( | ) | $ | ( | ) | ||
| Deferred tax liabilities, net | $ | ( | ) | $ | ( | ) | ||
Pursuant to the disclosure requirements of ASU 2023-09, the following table summarizes income taxes paid, net of refunds, by jurisdiction:
| For the six months ended June 30, 2026 | ||||
| Asia | $ | |||
| Europe | ||||
| Total income taxes paid (net of refunds) | $ | |||
F-22
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 14. | EQUITY |
Ordinary shares
The Company’s authorized share capital is comprised of
Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting, transfer and conversion rights. Each Class A ordinary share is entitled to
On January 29, 2024, the Company closed its initial public offering on the Nasdaq Capital Market where
As of December 31, 2025, and June 30, 2026, the number of the Company’s authorized Class A ordinary shares was
Preferred shares
As of December 31, 2025 and June 30, 2026, the number of the Company’s authorized preferred shares was
| 15. | RESTRICTED NET ASSETS |
A significant portion of the Group’s operations are conducted through its PRC (excluding Hong Kong) subsidiaries, and the Company’s ability to pay dividends is primarily dependent on receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations, and after it has met the PRC requirements for appropriation to statutory reserves. The Group is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least
As a result of these PRC laws and regulations, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. As of December 31, 2025 and June 30, 2026, net assets restricted in the aggregate, which include paid-in capital and statutory reserve funds of the Company’s subsidiaries, that are included in the Company’s consolidated net assets were approximately $
F-23
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 16. | COMMITMENTS AND CONTINGENCIES |
Commitments
As of December 31, 2025 and June 30, 2026, the Group had no material purchase commitments, significant capital commitments, long-term obligations or guarantees.
Contingencies
On November 12, 2021, ML Products Inc. filed a lawsuit against Aster U.S. and certain other entities in the U.S. District Court for the Central District of California. ML Products alleges that the defendants, including Aster U.S. and certain related entities, manipulated the Amazon search algorithm to promote sales of their consumer replacement ink and toner cartridges on Amazon.com and seeks damages. Aster U.S. filed a motion to dismiss the complaint on February 9, 2022. On October 12, 2023, ML Products filed a revised complaint against Aster U.S. in a separate action, ML Products Inc. v. Aster Graphics Inc., Case No. 5:23-cv-2094.
As of the date of this report, fact discovery has been completed and expert deposition discovery is underway. The trial, which has been continued several times, is currently scheduled for December 7, 2026.
Given that the litigation remains at a relatively early stage and significant factual and legal issues remain unresolved, the Group is currently unable to determine whether a loss will be incurred or estimate the possible loss or range of loss. No material loss or liability accrual has been recorded as of June 30, 2026.
| 17. | RELATED PARTY TRANSACTIONS |
Related parties
The Company’s related parties with which the Group had transactions include its affiliates, any director or executive officers of the Company and their immediate family members, as well as any shareholders owning more than
The table below sets forth the related parties and their relationships with the Group who had transaction with the Group for the six months ended June 30, 2025 and 2026:
| Name | Relationship | |
| Mr. Weidong Gu | ||
| Mr. Zhisheng Cheng | ||
| Mr. Xingzhi Huang | ||
| Xinyu High-Tech Investment Co., Ltd. |
F-24
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 17. | RELATED PARTY TRANSACTIONS (cont.) |
Amounts due to a Related party
The amounts due to a related party are as follows:
| As of December 31, | As of June 30, | |||||||
| 2025 | 2026 | |||||||
| (Unaudited) | ||||||||
| Rental income received in advance: | ||||||||
| Xinyu High-Tech Investment Co., Ltd. | $ | $ | ||||||
Related party transactions
The transactions of related parties are as follows:
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Guarantee provided for bank short-term borrowings | ||||||||
| Xinyu High-Tech Investment Co., Ltd. – Export-Import Bank of China Jiangxi Branch | $ | $ | ||||||
| Mr. Weidong Gu – Bank of China | ||||||||
| Mr. Weidong Gu – Xinyu Rural Commercial Bank | ||||||||
| Mr. Weidong Gu – Export-Import Bank of China Jiangxi Branch | ||||||||
| Mr. Zhisheng Cheng – Bank of China | ||||||||
| Mr. Zhisheng Cheng – Export-Import Bank of China Jiangxi Branch | ||||||||
| Mr. Xingzhi Huang – Bank of China | ||||||||
| Mr. Xingzhi Huang – Export-Import Bank of China Jiangxi Branch | ||||||||
| Rental income: | ||||||||
| Xinyu High-Tech Investment Co., Ltd. | $ | $ | ||||||
Mr. Weidong Gu, Mr. Zhisheng Cheng and Mr. Xingzhi Huang also provided guarantees with their personal property for the Group’s notes payable credited by Agricultural Bank of China Xinyu Branch and Bank of China Xinyu Branch.
| 18. | SEGMENT INFORMATION |
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Group’s chief operating decision maker in order to allocate resources and assess performance of the segment.
In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The Group applies the “management approach” in determining reportable operating segments, which considers the internal organization and reporting used by the Group’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group’s reportable segments.
F-25
PLANET IMAGE INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amount in thousands of U.S. dollars, except share and per share data)
| 18. | SEGMENT INFORMATION (cont.) |
Revenues by sales channel
The Group’s revenues derived from different channels for the six months ended June 30, 2025, and 2026, are as follows:
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Offline sales to dealers | $ | $ | ||||||
| Offline sales to ODM customers | ||||||||
| Online sales to retail customers | ||||||||
| Total | $ | $ | ||||||
Geographic information
The Group’s revenues for the six months ended June 30, 2025, and 2026, were primarily generated from North America, Europe, Asia and other regions.
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| North America | $ | $ | ||||||
| Europe | ||||||||
| Asia | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
As of December 31, 2025 and June 30, 2026, the Group’s
| 19. | SUBSEQUENT EVENTS |
Borrowings
On July 14, 2026, Jiangxi Yibo entered into a one-year loan agreement with Bank of China Xinyu Branch for a principal amount of $
On July 31, 2026, Jiangxi Yibo entered into a one-year loan agreement with Bank of China Xinyu Branch for a principal amount of $
The Group has evaluated subsequent events through September 16, 2026, the date on which the unaudited condensed consolidated financial statements were issued, and has determined that no events occurred subsequent to June 30, 2026, that would have a material impact on the unaudited condensed consolidated financial statements.
F-26