NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION

Chanson International Holding (“Chanson International,” or the “Company”), formerly known as RON Holding Limited, was incorporated under the laws of the Cayman Islands on July 26, 2019 as a holding company. Chanson International owns 100% of the equity interests of Deen Global Limited (“Deen Global”), a limited liability company incorporated under the laws of British Virgin Islands (“BVI”) on August 13, 2019. Deen Global owns 100% of the equity interests of Jenyd Holdings Limited (“Jenyd”), a business company incorporated in accordance with the laws and regulations of Hong Kong on September 13, 2019.

Chanson International, Deen Global, and Jenyd do not currently engage in any active business operations and act solely as holding companies.

Xinjiang United Family Trading Co., Ltd. (“Xinjiang United Family”), is a company incorporated in the People’s Republic of China (the “PRC”) on August 7, 2009. On September 27, 2020, the original shareholders of Xinjiang United Family entered into a share transfer agreement pursuant to which they transferred their 100% ownership interest in Xinjiang United Family to Jenyd. Accordingly Xinjiang United Family became a wholly foreign-owned enterprise (“WFOE”) and a wholly-owned subsidiary of Jenyd.

On March 3, 2025, Xinjiang United Family incorporated a wholly-owned subsidiary, Urumqi George Chanson Trading Co., Ltd. (“George Chanson Trading”) in the PRC, which is engaged in the business of sales and distribution of bakery and beverage products.

Xinjiang United Family and its subsidiary, George Chanson Trading, operate a bakery chain in China’s Xinjiang Uygur Autonomous Region under the brand name of “George●Chanson”. The chain currently consists of eight directly owned, high-end bakery stores in Urumqi and 45 bakery stores organized as individually owned businesses and collectively known as the United Family Group (each a “UFG entity” and, collectively, the “UFG entities”) in the Xinjiang region. The UFG entities are owned by the original shareholders of Xinjiang United Family but are operated pursuant to a series of contractual arrangements entered into between their respective owners and Xinjiang United Family.

On April 17, 2015, Xinjiang United Family incorporated a wholly-owned subsidiary, George Chanson (NY) Corp. (“Chanson NY”), in the State of New York, which owns and operates Chanson 23rd Street LLC (“Chanson 23rd Street”), a modern European-style café and eatery that specializes in the art of making French-style viennoiseries and pastries in the heart of Manhattan’s Flatiron District. On February 20, 2020, the Company’s Chairman, Mr. Gang Li, formed Chanson 355 Greenwich LLC (“Chanson Greenwich”), a New York limited liability company, and subsequently assigned his membership interests in Chanson Greenwich to Chanson NY on September 28, 2020. After the transfer, Chanson Greenwich became a wholly owned subsidiary of Chanson NY. Chanson Greenwich is another boutique café in Manhattan that opened in December 2021 and closed in the second half of fiscal year 2023. On April 21, 2021, Chanson NY formed a wholly owned subsidiary, Chanson Management LLC, a Delaware limited liability company. On August 5, 2021, Chanson NY formed a wholly owned subsidiary, Chanson 1293 3rd Ave LLC (“Chanson 3rd Ave”), a New York limited liability company. On March 21, 2022, Chanson NY formed a wholly owned subsidiary, Chanson 2040 Broadway LLC (“Chanson Broadway”), a New York limited liability company. Chanson 3rd Ave and Chanson Broadway are another two boutique cafés opened in March 2023 and July 2023, respectively.

Reorganization

In connection with its initial public offering, the Company has undertaken a reorganization of its legal structure (the “Reorganization”). The Reorganization involved the incorporation of Chanson International, Deen Global, and Jenyd, the execution of a Share Transfer Agreement pursuant to which the ownership interest in Xinjiang United Family was transferred from its original shareholders to Jenyd, and the execution of a series of contractual agreements between Xinjiang United Family and the owners of the UFG entities. After the Reorganization, Chanson International became the ultimate holding company of Xinjiang United Family and Xinjiang United Family became the primary beneficiary of the UFG entities through the VIE Agreements, as further discussed below.

Xinjiang United Family entered into a series of contractual arrangements with the owners of the 22 UFG entities on May 2, 2020, and with the owners of three newly established UFG entities in fiscal year 2020, five newly established UFG entities in fiscal year 2021, one newly established UFG entity in fiscal year 2022, nine newly established UFG entity in fiscal year 2023, twenty newly established UFG entities in fiscal year 2024, four newly established UFG entities in fiscal year 2025, and three newly established UFG entities in fiscal year 2026, respectively. Three of these UFG entities were closed in fiscal year 2021, three of these UFG entities were closed in fiscal year 2023, two of these UFG entities were closed in fiscal year 2024, three of these UFG entities were closed in fiscal year 2025 and nine of these UFG entities were closed in fiscal year 2026. Two of these UFG entities were converted into franchise stores in fiscal year 2026. These agreements include Exclusive Service Agreements, Pledge Agreements, Call Option Agreements, Operating Rights Proxy and Powers of Attorney Agreements and Spousal Consents (collectively, the “VIE Agreements”). Pursuant to the above VIE Agreements, Xinjiang United Family has the exclusive right to provide the UFG entities with consulting services related to business operations including operational and management consulting services. The VIE Agreements obligate Xinjiang United Family to absorb all of the risk of loss from business activities of these UFG entities and entitle Xinjiang United Family to receive all of their residual returns. In essence, Xinjiang United Family has the power to direct activities of the UFG entities that most significantly impact their economic performance, and the right to receive benefits from the UFG entities that could potentially be significant to Xinjiang United Family. Therefore, the Company believes that Xinjiang United Family has a controlling financial interest in and is the primary beneficiary of the UFG entities and that these UFG entities should be considered as Variable Interest Entities (“VIEs”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation. The eight bakery stores directly owned by Xinjiang United Family and the UFG entities controlled through the VIE Agreements are collectively referred to herein as the “PRC Stores.”

The Company, together with its wholly owned subsidiaries, was under the common control of the same shareholders before and after the Reorganization. Accordingly, the Reorganization was accounted for as a transaction among entities under common control, and the accompanying consolidated financial statements were prepared using the historical carrying amounts of the entities presented.

The VIE contractual arrangements

The UFG entities are controlled by the Company through contractual arrangements in lieu of direct equity ownership by the Company or any of its subsidiaries.

A VIE is an entity that either has a total equity investment that is insufficient to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity, or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary of, and must consolidate, the VIE.

Xinjiang United Family and its subsidiary is deemed to have a controlling financial interest in and be the primary beneficiary of the UFG entities because it has both of the following characteristics:

Pursuant to the contractual arrangements with the UFG entities, the UFG entities pay service fees equal to all of their net profit after tax payments to Xinjiang United Family and its subsidiary. At the same time, Xinjiang United Family and its subsidiary are obligated to absorb all of their losses. Such contractual arrangements are designed so that the operation of the UFG entities is for the benefit of Xinjiang United Family and, ultimately, the Company.

Risks associated with the VIE structure

The Company believes that the contractual arrangements with the UFG entities and their respective owners are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce such contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

The Company’s ability to conduct its consulting services business may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate the UFG entities in its unaudited condensed consolidated financial statements as it may lose the ability to direct activities of the UFG entities and receive economic benefits from the UFG entities. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company and its PRC subsidiaries and the UFG entities. The financial position, operation, and cash flow of the UFG entities are material to total assets and liabilities presented on the unaudited condensed consolidated balance sheets and revenue, expenses, and net income (loss) presented on the unaudited condensed consolidated statements of operations and other comprehensive income (loss) as well as the cash flows from operating, investing, and financing activities presented on the unaudited condensed consolidated statements of cash flows.

The Company did not provide any financial support to the UFG entities for the six months ended June 30, 2026 and 2025. The Company had no contractual obligation to provide financial support to the VIEs as of June 30, 2026 and December 31, 2025. The amount of the revenue-producing assets held by the VIEs was $3,338,164, including $796,335 of bakery production equipment, $180,441 of office equipment and furniture, and $2,361,388 of leasehold improvement, with the accumulated depreciation of $1,437,540, so net of these property, plant, and equipment was $1,900,624 as of June 30, 2026. The amount of the revenue-producing assets held by the VIEs was $3,256,931, including $755,667 of bakery production equipment, $160,475 of office equipment and furniture, and $2,340,789 of leasehold improvement, with the accumulated depreciation of $1,120,550, so net of these property, plant, and equipment was $2,136,381 as of December 31, 2025. In addition to property and equipment, the VIEs also hold other operating assets, including cash and cash equivalents, receivables, and inventories, as reflected in the table below. The following financial statement amounts and balances of the UFG entities were included in the accompanying unaudited condensed consolidated financial statements after elimination of intercompany transactions and balances:

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 3 — ACCOUNTS RECEIVABLE, NET

The Company’s accounts receivable primarily include balance generated from selling bakery products to local corporate customers, billed but has not been collected as of the balance sheet dates. Accounts receivable also include amounts due from third-party online delivery and e-commerce platforms for which settlement is typically received within a short period.

The Company evaluates accounts receivable for expected credit losses in accordance with ASC 326, Financial Instruments - Credit Losses. The Company considers historical loss experience, current conditions, and reasonable and supportable forecasts in estimating expected credit losses. As of June 30, 2026 and December 31, 2025, allowance for credit losses for accounts receivable amounted to $93,048 and $nil, respectively.

NOTE 4 — PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET

NOTE 5 — INVENTORIES

The Company’s inventories primarily consist of perishable bakery products with relatively short shelf lives. The Company manages inventory levels through a just-in-time production approach to minimize excess inventory and obsolescence risk. Management assesses net realizable value based on recent sales performance and subsequent sales after the reporting period. As of June 30, 2026 and December 31, 2025, no material inventory write-downs were required.

NOTE 6 — LEASES

The Company leases office spaces, bakery store facilities, employee dormitories and a vehicle under non-cancelable operating leases, with terms ranging from 1 to 15 years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of ROU assets and lease liabilities. Lease expenses are recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet.

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Certain lease agreements require lease payments to be made in advance, resulting in prepaid lease balances. These balances represent timing differences between cash payments and straight-line lease expense recognition and are reflected in the measurement of the right-of-use assets.

During the six months ended June 30, 2026 and 2025, the Company incurred total operating lease expenses of $1,216,546 and $1,546,606, respectively.

NOTE 7 — PROPERTY AND EQUIPMENT, NET

Loss on disposal of property and equipment was $nil and $77,505 for the six months ended June 30, 2026 and 2025, respectively.

Depreciation expenses were $539,706 and $374,851 for the six months ended June 30, 2026 and 2025, respectively.

NOTE 8 — INTANGIBLE ASSETS, NET

Management assessed whether events or changes in circumstances, including store closures and changes in business operations, indicated that the carrying amount of the intangible assets may not be recoverable. As the software systems are utilized across the Company’s operations and are not dependent on individual store performance, management concluded that such events did not represent impairment indicators. Accordingly, no impairment loss was recognized for the six months ended June 30, 2026.

Amortization expenses were $18,125 and $18,125 for the six months ended June 30, 2026 and 2025, respectively.

NOTE 9 — LONG-TERM DEBT INVESTMENTS

The Company’s long-term debt investments are measured at amortized cost. The Company evaluates these investments for expected credit losses in accordance with ASC 326, Financial Instruments - Credit Losses, and recognizes an allowance for credit losses based on lifetime expected losses, considering historical experience, current conditions, and reasonable and supportable forecasts. As of June 30, 2026, the Company’s long-term debt investments were concentrated with a limited number of counterparties. The Company monitors the creditworthiness of these counterparties on an ongoing basis and considers such concentration risk in its assessment of expected credit losses. Management assessed the expected credit losses associated with these investments, taking into account the financial condition of the counterparties, contractual terms, repayment history, and available guarantees. While the Company has not experienced any defaults to date and expects to realize these investments in accordance with their contractual terms, the concentration of these investments and reliance on counterparty performance and guarantees may expose the Company to credit and liquidity risks. Based on management’s assessment, no material allowance for credit losses was recorded as of June 30, 2026.

During the year ended December 31, 2025, the Company significantly increased its long-term debt investments as part of its strategy to enhance returns on excess cash and expand financing-related activities. The realization of returns from these investments is an important component of the Company’s liquidity planning and is subject to counterparty performance.

NOTE 10 — LOANS

Short-term bank loans

On March 24, 2025, Xinjiang United Family entered into a loan agreement with Huaxia Bank to borrow RMB3.0 million ($428,844) as working capital for a year, with a maturity date of March 24, 2026. This loan bears a fixed interest rate of 3.5% per annum. The loan was guaranteed by Ms. Baolin Wang, the legal representative of Xinjiang United Family, and Urumqi Meihe Cancer Rehabilitation Hospital Co., Ltd., a related party controlled by a family member of the Company’s Chairman, Mr. Gang Li. The loan was repaid in full upon maturity.

Subsequently, on March 23, 2026, Xinjiang United Family entered into another loan agreement with Huaxia Bank to borrow RMB2.5 million ($368,051) as working capital for one year, with a maturity date of March 23, 2027. The loan bears a fixed interest rate of 3.0% per annum. The loan was guaranteed by Ms. Baolin Wang, Mr. Gang Li and Urumqi Meihe Cancer Rehabilitation Hospital Co., Ltd.

Long-term bank loans

For the above-mentioned short-term and long-term bank loans, the Company recorded interest expenses of $110,603 and $74,745 for the six months ended June 30, 2026 and 2025, respectively.

The Company is subject to certain customary covenants under its loan agreements. Management has assessed compliance with these covenants as of June 30, 2026 and concluded that the Company was in compliance with all applicable covenants. There were no events of default or breaches identified during the period.

Management has assessed compliance with the terms of the loan agreements as of June 30, 2026 and concluded that the Company was in compliance with all applicable repayment and other contractual requirements. No events of default had occurred as of June 30, 2026 that would trigger early repayment or otherwise affect the classification of the borrowings.

Management has reviewed the terms of the loan agreements, including provisions related to covenant compliance and potential acceleration, and determined that the classification of the loans between current and non-current is appropriate as of June 30, 2026.

Certain of the Company’s borrowings are guaranteed by the Company’s controlling shareholder, Mr. Gang Li, his family member, Ms. Ying Xiong, and entities controlled by Mr. Gang Li. These guarantees were provided to support the Company’s financing arrangements and were not separately compensated.

NOTE 11 — RELATED PARTY TRANSACTIONS

As of June 30, 2026, the Company had both amounts due from and due to Mr. Gang Li arising primarily from funding arrangements involving the Company’s PRC and U.S. entities, with Mr. Gang Li acting as the central counterparty in facilitating the transfer and settlement of funds. On a gross basis, the Company had amounts due from Mr. Gang Li of approximately $15.1 million and amounts due to Mr. Gang Li of approximately $16.3 million as of June 30, 2026. Pursuant to an offsetting arrangement among the relevant parties, the Company has the right and intention to settle the reciprocal balances on a net basis. Accordingly, the Company presented a net amount due to the related party of approximately $1.2 million as of June 30, 2026.

During the six months ended June 30, 2026, the Company entered into various funding arrangements with Mr. Gang Li and entities controlled by or associated with Mr. Gang Li and his family. These transactions primarily consisted of interest-free advances and repayments, funding transfers, and payments made on behalf of the Company or related parties. The related transactions were authorized in accordance with the Company’s applicable approval procedures, and the related outstanding balances as of June 30, 2026 are reflected in the related-party balances described above, as applicable.

Several related parties provided guarantees in connection with the Company’s short-term and long-term bank loans (see Note 10).

Pursuant to a Premises Use Agreement dated April 30, 2020 and a Supplemental Agreement dated June 18, 2020, Urumqi Plastic Surgery Hospital Co., Ltd., a PRC company controlled by Mr. Gang Li, provided approximately 5,382 square feet office space for the Company’s headquarters without charge. The term of the agreement is from January 1, 2020 to June 25, 2028, unless otherwise terminated by either party.

During the year ended December 31, 2025, the Company acquired a commercial property unit from its controlling shareholder, Mr. Gang Li, through a debt settlement arrangement. The transaction involved the settlement of amounts due from the controlling shareholder, whereby the property was transferred to the Company in satisfaction of the outstanding balance. The Company determined the value of the property based on an independent third-party valuation at the acquisition date.

Management considers the above transactions to be conducted in the normal course of business and, where applicable, based on terms comparable to those that could be obtained in transactions with unrelated parties.

NOTE 12 — TAXES

Cayman Islands

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains, or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. No stamp duty is payable in the Cayman Islands on the issue of shares by, or any transfers of shares of, Cayman Islands companies (except those which hold interests in land in the Cayman Islands). There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares, as the case may be, nor will gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax.

British Virgin Islands

Deen Global is incorporated in the BVI as an offshore holding company and is not subject to tax on income or capital gain under the laws of BVI.

Hong Kong

Jenyd is incorporated in Hong Kong and is subject to profit taxes in Hong Kong at a rate of 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000. However, Jenyd did not generate any assessable profits arising in or derived from Hong Kong for the six months ended June 30, 2026 and 2025, and accordingly no provision for Hong Kong profits tax was made in these periods.

PRC

Under the Enterprise Income Tax (“EIT”) Law of the PRC, domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays, or exemptions may be granted on a case-by-case basis. The Company’s subsidiary, Xinjiang United Family and its branch offices were incorporated in the PRC and subject to 25% income tax rate.

The UFG entities are individually-owned businesses, which are not subject to the EIT Law of the PRC, but the Individual Income Tax. The Measures for Individual Income Tax Calculation of Individual Industrial and Commercial Households, or the “Measures,” were adopted by the State Administration of Taxation on December 19, 2014 and promulgated on December 27, 2014, and amended on June 15, 2018. According to Article 7 of the Measures, for the income from production and operation of individually-owned businesses, the amount of taxable income shall be the balance of the total income of each tax year after deducting costs, expenses, taxes, losses and other expenditures, and allowable compensation for losses in previous years. Income tax for an individually-owned business can generally be assessed on an actual basis or a deemed basis, which the UFG entities apply. The deemed basis adopted by the UFG entities includes two types: taxation based on fixed amount (“Fixed Amount Method”) and taxation based on fixed tax rate (“Fixed Rate Method”), both methods are as determined by the local tax authority on a case-by-case basis. Therefore, income tax for the UFG entities is levied either as a fixed amount pursuant to Fixed Amount Method, or at an industry-specific fixed rate pursuant to the Fixed Rate Method. According to Announcement No. 12 [2021], Announcement No. 6 [2023] and Announcement No. 12 [2023] of the State Taxation Administration, the income tax payable by the UFG entities shall be halved during the period from January 1, 2021 to December 31, 2027. For the six months ended June 30, 2026 and 2025, 42 and 14 of these UFG entities paid income tax, respectively. The rest of these UFG entities were exempted from paying income tax. During the six months ended June 30, 2026 and 2025, the total tax exemption of the UFG entities were $9,376 and $14,627, respectively. As of June 30, 2026, for the tax years ended December 31, 2021 through December 31, 2025 the Company’s UFG entities remained open for statutory examination by PRC tax authorities. In addition, the TNI and tax rate of the Company’s UFG entities are subject to periodical reassessment by the local tax authority. If the local tax authority determined that income tax for the UFG entities should be levied at a higher TNI or higher tax rate, the Company would be obligated to pay additional income tax for the UFG entities. Along with the continuing growth of business, the Company expects that the tax rates of these UFG entities are likely to increase in the future in the annual assessment based on the past performance.

United States

The Company’s subsidiaries in the U.S. are subject to a U.S. federal corporate income tax rate of 21%.

The Company’s operations in the U.S. incurred a cumulative net operating loss (“NOL”) which may reduce future federal taxable income. As of December 31, 2025, the cumulative NOL was $17,010,211. During the six months ended June 30, 2026, the U.S. operations incurred an additional NOL of $560,447, resulting in a cumulative NOL of $17,570,658 as of June 30, 2026, among which approximately $2,882,465 will expire in 2037 and the remaining balance is carried forward indefinitely.

The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect the Company’s future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company determined that it is more likely than not its deferred tax assets could not be realized due to uncertainty on future earnings in the U.S. operations. The Company provided a 100% valuation allowance for its deferred tax assets as of June 30, 2026 and December 31, 2025, respectively.

NOTE 13 — SHAREHOLDERS’ EQUITY

Ordinary Shares

Chanson International (formerly known as RON Holding Limited) was incorporated under the laws of the Cayman Islands on July 26, 2019. Upon incorporation, the authorized share capital of the Company was $50,000 divided into 50,000 ordinary shares of par value $1.00 each and 100 ordinary shares were issued. The issuance of these 100 ordinary shares, and the 1,000-for-1 share split (as described below) and the subsequent share issuances are considered as a part of the Reorganization of the Company, which was retroactively applied as if the transaction occurred at the beginning of the period presented (see Note 1).

On March 27, 2021, the Company’s shareholders and board of directors approved (i) the subdivision of the Company’s authorized and issued share capital at a ratio of 1,000-for-1 share such that the authorized share capital of the Company was amended to $50,000 divided into 50,000,000 ordinary shares of par value $0.001 each and the 100 ordinary shares of a par value of $1 then issued and outstanding were subdivided into 100,000 ordinary shares of a par value of $0.001 (the “1,000-for-1 share split”); (ii) the creation of Class A Ordinary Shares and Class B ordinary shares, par value $0.001 per share (“Class B Ordinary Shares”, and collectively with Class A Ordinary Shares, “Ordinary Shares”). Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except for voting and conversion rights. In respect of matters requiring a vote of all shareholders, each holder of Class A Ordinary Shares will be entitled to one vote per one Class A Ordinary Share and each holder of Class B Ordinary Shares will be entitled to 10 votes per one Class B Ordinary Share. The Class A Ordinary Shares are not convertible into shares of any other class. The Class B Ordinary Shares are convertible into Class A Ordinary Shares at any time after issuance at the option of the holder on a one-to-one basis; (iii) the re-designation of 3,000 ordinary shares held by Haily Global Limited into 3,000 Class B Ordinary Shares; and (iv) issuances of Class A Ordinary Shares and Class B Ordinary Shares to the existing shareholders, to increase the number of total Ordinary Shares issued and outstanding prior to the completion of this offering from 100,000 to 9,000,000 (the “share issuances”). The Company believes the 1,000-for-1 share split and the share issuances should be considered as a part of the Reorganization of the Company and accounted for on a retroactive basis pursuant to ASC 260. The Company has retroactively restated all shares and per share data for all periods presented.

On March 12, 2025, the Company’s shareholders resolved to increase the authorized share capital from $50,000 divided into 5,500 (Pre-Reverse Share Split 44,000,000) Class A Ordinary Shares of $8.0 (Pre-Reverse Share Split $0.001) par value each and 750 (Pre-Reverse Share Split 6,000,000) Class B Ordinary Shares of $8.0 (Pre-Reverse Share Split $0.001) par value each, to $5,000,000 divided into 550,000 (Pre-Reverse Share Split 4,400,000,000) Class A Ordinary Shares of $8.0 (Pre-Reverse Share Split $0.001) par value each and 75,000 (Pre-Reverse Share Split 600,000,000) Class B Ordinary Shares of $8.0 (Pre-Reverse Share Split $0.001) par value each.

On August 1, 2025, the Company’s board of directors approved a 1-for-80 reverse stock split of its ordinary shares, which became effective on August 18, 2025 (the “2025 Reverse Share Split”). As a result of the 2025 Reverse Share Split, each of the eighty pre-split ordinary shares outstanding automatically combined and converted to one issued and outstanding ordinary share without any action on the part of the shareholders. No fractional shares were issued to any shareholders in connection with the Reverse Share Split. Each shareholder received one share of the Company in lieu of the fractional share that would have resulted from the Reverse Share Split. As a result of the 2025 Reverse Share Split, the par value changed from $0.1 (Pre-2026 Reverse Share Split $0.001) to $8.0 (Pre-2026 Reverse Share Split $0.08) accordingly. At the same time, the Company’s authorized share capital changed from $5,000,000 divided into 44,000,000 (Pre-2026 Reverse Share Split 4,400,000,000) Class A Ordinary Shares of $0.1 (Pre-2026 Reverse Share Split $0.001) par value each and 6,000,000 (Pre-2026 Reverse Share Split 600,000,000) Class B ordinary shares of $0.1 (Pre-2026 Reverse Share Split $0.001) par value each, to $5,000,000 divided into 550,000 (Pre-2026 Reverse Share Split 55,000,000) Class A Ordinary Shares of $8.0 (Pre-2026 Reverse Share Split $0.08) par value each and 75,000 (Pre-2026 Reverse Share Split 7,500,000) Class B Ordinary Shares of $8.0 (Pre-2026 Reverse Share Split $0.08) par value each. The Company has retroactively restated all shares and per share data for all periods presented.

On November 12, 2025, the Company’s shareholders resolved to increase the authorized share capital from $5,000,000 divided into 550,000 (Pre-2026 Reverse Share Split 55,000,000) Class A Ordinary Shares of $8.0 (Pre-2026 Reverse Share Split $0.08) par value each and 75,000 (Pre-2026 Reverse Share Split 7,500,000) Class B Ordinary Shares of $8.0 (Pre-2026 Reverse Share Split $0.08) par value each to $165,000,000 divided into 20,550,000 (Pre-2026 Reverse Share Split 2,055,000,000) Class A Ordinary Shares of $8.0 (Pre-2026 Reverse Share Split $0.08) par value each and 75,000 (Pre-2026 Reverse Share Split 7,500,000) Class B Ordinary Shares of $8.0 (Pre-2026 Reverse Share Split $0.08) par value each.

On January 6, 2026, the Company entered into a sales agreement (the “Sales Agreement”), with AC Sunshine Securities LLC (the “Sales Agent”) to act as its sales agent in connection with an at-the-market (“ATM”) offering program. Pursuant to the Sales Agreement, the Company may offer and sell, from time to time, to or through the Sales Agent, Class A Ordinary Shares, par value $8.0 (Pre-2026 Reverse Share Split $0.08) per share, for an aggregate offering price of up to $219,375,000 (the “Offered Shares”). In April 2026, 3,250,000 Class A Ordinary Shares (Pre-2026 Reverse Share Split 325,000,000) were issued under the Sales Agreement. On May 28, 2026, the Company surrendered 1,317,429 Class A Ordinary Shares for no consideration. As of June 30, 2026, net proceeds of approximately $13.0 million were fully received after deducting offering expenses and commissions. Subsequent to June 30, 2026, an additional 93,720 Class A Ordinary Shares were issued, with related additional net proceeds of approximately $0.1 million received in July 2026.

On February 23, 2026, the Company’s shareholders resolved a series resolution relating to the reduction and reorganization of the Company’s share capital (the “Share Capital Reduction and Reorganization”), and on March 13, 2026, the Share Capital Reduction and Reorganization were approved by the Registrar of Companies of the Cayman Islands (the “Cayman Registrar”). The principal components of the Share Capital Reduction and Reorganization are as follows:

As a result of the Share Capital Reduction and Reorganization, the Company’s authorized share capital was $412,500 divided into 41,100,000 (Pre-2026 Reverse Share Split 4,110,000,000) Class A Ordinary Shares of $0.01 (Pre-2026 Reverse Share Split $0.0001) par value each and 150,000 (Pre-2026 Reverse Share Split 15,000,000) Class B Ordinary Shares of $0.01 (Pre-2026 Reverse Share Split $0.0001) par value each.

On May 5, 2026, the Company announced a 1-for-100 reverse stock split of its authorized, issued and outstanding ordinary shares, which became effective on May 7, 2026 (the “2026 Reverse Share Split”). Each 100 ordinary shares outstanding were automatically combined and converted to one issued and outstanding ordinary share without any action on the part of the shareholders. No fractional shares were issued to any shareholders in connection with the 2026 Reverse Share Split, and each shareholder was entitled to receive one share of the Company in lieu of the fractional share of that class that would have resulted from the 2026 Reverse Share Split. As a result of the 2026 Reverse Share Split, the Company’s authorized share capital was changed from $412,500 divided into 4,110,000,000 Class A Ordinary Shares of $0.0001 par value each and 15,000,000 Class B Ordinary Shares of $0.0001 par value each, to $412,500 divided into 41,100,000 Class A Ordinary Shares of $0.01 par value each and 150,000 Class B Ordinary Shares of $0.01 par value each. The Company has retroactively restated all shares and per share data for all periods presented.

Initial Public Offering

On April 3, 2023, the Company closed its IPO of 424 (Pre-Reverse Share Split 3,390,000) Class A Ordinary Shares at a public offering price of $32,000 (Pre-Reverse Share Split $4.0) per Class A Ordinary Share for the total gross proceeds of $13.6 million before deducting underwriting discounts and other related expenses. Net proceeds of the Company’s IPO were approximately $12.0 million. The Company’s Class A Ordinary Shares began trading on the Nasdaq Capital Market under the ticker symbol “CHSN” on March 30, 2023.

Representative Warrants

In connection with the Company’s IPO, the Company agreed to issue warrants to the representative of several underwriters (“Representative warrants”), exercisable for a period of four and a half years commencing six months from the date of commencement of sales of the offering, to purchase 8 (Pre-Reverse Share Split 67,800) Class A Ordinary Shares at $32,000 (Pre-Reverse Share Split $4.0) per Class A Ordinary Share. As the Representative warrants are considered indexed to the Company’s own stock and meet the criteria for equity classification according to ASC 815-40, therefore, the Representative warrants are classified as equity on the unaudited condensed consolidated balance sheets. The warrants classified as equity are not subject to remeasurement after initial recognition. On December 13, 2023, 4 (Pre-Reverse Share Split 35,319) Class A Ordinary Share were issued as the Representative warrants were fully exercised on a cashless basis.

Conversion of Ordinary Shares

On February 5, 2024, the Company’s shareholder Haily Global Limited elected to convert 34 (Pre-Reverse Share Split 270,000) Class B Ordinary Shares on a one-for-one basis into 34 (Pre-Reverse Share Split 270,000) Class A Ordinary Shares, which was duly approved by the Company’s board of directors.

Issuance of Ordinary Shares

On September 13, 2024, the Company entered into a securities purchase agreement with certain investors identified therein for a best efforts follow-on public offering of (i) 1,123 (Pre-Reverse Share Split 8,980,251) Class A Ordinary Shares, and (ii) 1,123 (Pre-Reverse Share Split 8,980,251) common warrants to purchase 1,123 (Pre-Reverse Share Split 8,980,251) Class A Ordinary Shares, at an exercise price of $7,776 (Pre-Reverse Share Split $0.972) per share, exercisable within one year anniversary of the closing of the offering. The Class A Ordinary Shares and common warrants were sold at a combined public offering price of $6,480 (Pre-Reverse Share Split $0.81) per share and accompanying warrants. The offering was closed on September 17, 2024, and the Company received aggregate gross proceeds of $7.3 million from the offering, before deducting offering expenses and commissions, excluding the exercise of any common warrants. During the year ended December 31, 2024, 737 (Pre-Reverse Share Split 5,894,137) Class A Ordinary Shares were issued as all the common warrants were exercised on a cashless basis.

On November 5, 2025, the Company entered into a securities purchase agreement with certain investors for a private placement offering of 375,000 (Pre-2026 Reverse Share Split 37,500,000) Class A Ordinary Shares at the subscription price of $80.0 (Pre-2026 Reverse Share Split $0.80) per Class A Ordinary Share. All of the Class A Ordinary Shares was issued on November 18, 2025, and the Company received aggregate gross proceeds of $30.0 million from the offering, before deducting offering expenses and commissions.

Issuance of the Equity Security Units

On June 13, 2025, the Company priced a best-efforts public offering for the sale of units as described below. The offering was comprised of 2,000 (Pre-Reverse Share Split 16,000,000) units (each a “Unit”), consisting of (i) one Class A Ordinary Share, or in lieu thereof, a pre-funded warrant (each a “Pre-Funded Warrant”); (ii) one series A warrant to purchase one Class A Ordinary Share (each a “Series A Warrant”); and (iii) one series B warrant to purchase one Class A Ordinary Share (each a “Series B Warrant”). The public offering price of the Units was $4,000 (Pre-Reverse Share Split $0.5) per Unit. The Pre-Funded Warrants will be immediately exercisable (subject to the beneficial ownership limitation) and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. Each of the Series A Warrants and the Series B Warrants would have an exercise price of $4,200 (Pre-Reverse Share Split $0.525) per Class A Ordinary Share and be exercisable beginning on the date of the issuance date and ending on the two and half anniversary of the issuance date. Additionally, holders of Series B Warrants may affect a “zero exercise price option,” under which up to 9,375 (Pre-Reverse Share Split 75,000,000) Class A Ordinary Shares may be issuable in aggregate under all Series B Warrants. The Company registered up to 13,375 (Pre-Reverse Share Split 107,000,000) Class A Ordinary Shares underlying the Pre-Funded Warrants, the Series A Warrants and the Series B Warrants. The offering was closed on June 16, 2025, and the Company received aggregate gross proceeds of $8.0 million from the offering, before deducting placement agent fees and other estimated expenses payable by the Company, excluding the exercise of any warrant offered. During the year ended December 31, 2025, 625 (Pre-Reverse Share Split 5,000,000) Class A Ordinary Shares were directly issued; 1,375 (Pre-Reverse Share Split 11,000,000) Class A Ordinary Shares were issued upon the exercise of all Pre-Funded Warrants; and 9,375 (Pre-Reverse Share Split 75,000,000) Class A Ordinary Shares were issued upon on the exercise of all Series B Warrants at zero exercise price option. No Series A Warrants had been exercised as of June 30, 2026.

As a result, the Company had 41,100,000 (Pre-2026 Reverse Share Split 4,110,000,000) authorized Class A Ordinary Shares of a par value of $0.01 (Pre-2026 Reverse Share Split $0.0001), of which 2,321,682 shares and 389,080 (Pre-2026 Reverse Share Split 38,907,905) Class A Ordinary Shares were issued and outstanding as of June 30, 2026 and December 31, 2025, respectively, and the Company had 150,000 (Pre-2026 Reverse Share Split 15,000,000) authorized Class B Ordinary Shares of a par value of $0.01 (Pre-2026 Reverse Share Split $0.0001), of which 709 shares and 709 (Pre-2026 Reverse Share Split 70,875) Class B Ordinary Shares were issued and outstanding as of June 30, 2026 and December 31, 2025, respectively. In total, the Company had 41,250,000 (Pre-2026 Reverse Share Split 4,125,000,000) authorized Ordinary Shares of par value of $0.01 (Pre-2026 Reverse Share Split $0.0001) each, of which 2,322,391 shares and 389,789 (Pre-2026 Reverse Share Split 38,978,780) shares were issued and outstanding as of June 30, 2026 and December 31, 2025, respectively.

Statutory Reserve

The Company’s PRC subsidiaries are 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 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory reserve may be applied against prior year losses, if any, and may be used for general business expansion and production or increase in registered capital, but are not distributable as cash dividends. As of June 30, 2026 and December 31, 2025, the balance of the statutory reserves was $740,816 and $740,816, respectively.

Restricted net assets

The Company’s PRC subsidiaries and the UFG entities are restricted in their ability to transfer a portion of their net assets, equivalent to their statutory reserves and their share capital to the Company in the form of loans, advances, or cash dividends. The payment of dividends by entities organized in China is subject to limitations, procedures, and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. As of June 30, 2026 and December 31, 2025, the total restricted net assets amounted to $14,382,727 and $6,382,727, respectively.

NOTE 14 — COMMITMENTS AND CONTINGENCIES

Contingencies

From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. As of June 30, 2026 and December 31, 2025, there were no legal claims and litigation against the Company.

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.

NOTE 16 — SUBSEQUENT EVENTS

On August 14, 2026, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain investors for a private placement offering (the “Private Placement”) of 5,000,000 Class A ordinary shares (the “Shares”) of the Company, par value $0.01 per share, at the subscription price of $0.80 per Class A Ordinary Share, for aggregate gross proceeds of $4,000,000. The Company has received the gross proceeds in full from the investors, and all Shares have been issued as of the date of this report.

The Company evaluated subsequent events through September 18, 2026, the date on which these unaudited condensed consolidated financial statements were issued, and concluded that there were no additional subsequent events, other than those disclosed above, requiring adjustment to or disclosure in, the unaudited condensed consolidated financial statements.