| SEGMENT REPORTING |
NOTE 15 — SEGMENT REPORTING 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 (the “CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s CODM for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the CODM, reviews operation results by locations. Based on management’s assessment, the Company has determined that it has two operating segments, China and the United States. Other operations are not material and are included within the United States segment. The Company has identified the measure of segment profit or loss reviewed by the CODM as net income (loss). The CODM uses this measure to evaluate segment performance and allocate resources. Significant segment expenses regularly provided to the CODM include cost of revenue, selling expenses, and general and administrative expenses, which are disclosed in the accompanying segment information. Other income and expenses are included in the measure of segment profit or loss reviewed by the CODM. The following table presents the segment information for the six months ended June 30, 2026 and 2025, respectively: | | | For the Six Months Ended
June 30, 2026 | | | | | China | | | United
States | | | Total | | | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | Revenue | | $ | 7,814,323 | | | $ | 481,432 | | | $ | 8,295,755 | | | Less: | | | | | | | | | | | | | | Cost of revenue | | | 4,133,438 | | | | 204,977 | | | | 4,338,415 | | | Selling expenses | | | 3,084,876 | | | | 170,354 | | | | 3,255,230 | | | General and administrative expenses | | | 712,330 | | | | 771,687 | | | | 1,484,017 | | | Loss from operations | | | (116,321 | ) | | | (665,586 | ) | | | (781,907 | ) | | Other (expense) income | | | | | | | | | | | | | | Interest expense, net | | | (110,419 | ) | | | (3,612 | ) | | | (114,031 | ) | | Other (expense) income, net | | | (40,620 | ) | | | 3,216 | | | | (37,404 | ) | | Interest income from long-term debt investments | | | 444,618 | | | | 1,359,614 | | | | 1,804,232 | | | Profit before income tax expense | | | 177,258 | | | | 693,632 | | | | 870,890 | | | Income tax expense | | | (21,963 | ) | | | - | | | | (21,963 | ) | | Net income | | $ | 155,295 | | | $ | 693,632 | | | $ | 848,927 | | | Depreciation and amortization | | $ | 460,802 | | | $ | 97,029 | | | $ | 557,831 | | | Capital expenditures | | $ | 159,331 | | | $ | - | | | $ | 159,331 | | | | | For the Six Months Ended
June 30, 2025 | | | | | China | | | United States | | | Total | | | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | Revenue | | $ | 7,784,323 | | | $ | 903,885 | | | $ | 8,688,208 | | | Less: | | | | | | | | | | | | | | Cost of revenue | | | 4,058,570 | | | | 764,286 | | | | 4,822,856 | | | Selling expenses | | | 2,452,200 | | | | 364,928 | | | | 2,817,128 | | | General and administrative expenses | | | 607,647 | | | | 1,631,122 | | | | 2,238,769 | | | Income (loss) from operations | | | 665,906 | | | | (1,856,451 | ) | | | (1,190,545 | ) | | Other income (expense) | | | | | | | | | | | | | | Interest expense, net | | | (74,598 | ) | | | (3,745 | ) | | | (78,343 | ) | | Other (expense) income, net | | | (110,713 | ) | | | 34,226 | | | | (76,487 | ) | | Interest income from long term debt investment | | | - | | | | 359,014 | | | | 359,014 | | | Profit (loss) before income tax expense | | | 480,595 | | | | (1,466,956 | ) | | | (986,361 | ) | | Income tax expense | | | (62,432 | ) | | | - | | | | (62,432 | ) | | Net income (loss) | | $ | 418,163 | | | $ | (1,466,956 | ) | | $ | (1,048,793 | ) | | Depreciation and amortization | | $ | 281,051 | | | $ | 111,925 | | | $ | 392,976 | | | Capital expenditures | | $ | 1,260,320 | | | $ | 4,341 | | | $ | 1,264,661 | | | | | June 30,
2026 | | | December 31,
2025 | | | | | (Unaudited) | | | | | | Total assets: | | | | | | | | China | | $ | 49,568,616 | | | $ | 38,750,490 | | | United States | | | 48,040,682 | | | | 43,235,301 | | | Total assets | | $ | 97,609,298 | | | $ | 81,985,791 | | | | | | | | | | | | | Total liabilities: | | | | | | | | | | China | | $ | 23,170,224 | | | $ | 22,771,550 | | | United States | | | 3,990,127 | | | | 3,003,309 | | | Total liabilities | | $ | 27,160,351 | | | $ | 25,774,859 | |
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