Note 11 – Discontinued operations

In April 2025, the Company changed its business model. Rongcheng relinquished its 55% ownership in Xuchang and received its original investment back, but will still fund the opening of stores operated by Xuchang. In the future, the investment funds for stores will be recovered as loans from the stores’ profits. As a result, Xuchang was deconsolidated from the Company’s consolidated financial statements starting in the second quarter of 2025 and Xuchang’s operating results prior to the deconsolidation was accounted for as discontinued operations. The Company recorded a loss on deconsolidation of the discontinued operations of $2,788 in the second quarter of 2025.

The Company has reclassified its previously issued financial statements to segregate the discontinued operations as of the earliest period reported.