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1. ORGANIZATION, PRINCIPAL ACTIVITIES AND MANAGEMENT’S PLANS Taoping Inc., together with its subsidiaries (the “Company”), is a provider of cloud-based technologies for Smart City IoT platforms, elevator products and related services, digital advertising delivery, and other internet-based information systems in China. The Company has built a far-reaching city partner ecosystem and comprehensive portfolio for its products and services, which are aligned together with its smart cloud platform, cloud services and solutions. In May 2018, we changed our corporate name from “China Information Technology Inc.” to “Taoping Inc.”, to reflect our current business operations in the new media and IoT industries. In 2021, Information Security Tech International Co. Ltd. (“IST HK”), one of the Company’s Hong Kong subsidiaries then, changed its corporate name to Taoping Group (China) Ltd. to reflect the Company’s current corporate structure to be in line with the new business strategies. As listed in the table below, these services are provided through the Company’s operating subsidiaries, primarily in Hong Kong and mainland China. In June 2021, the Company consummated an acquisition of <span id="xdx_90F_eus-gaap--BusinessAcquisitionPercentageOfVotingInterestsAcquired_iI_pid_dp_uPure_c20210630__us-gaap--BusinessAcquisitionAxis__custom--TaopingNewMediaCoLtdMember_zXsKHR1SSMQg" title="Equity interest acquired, percentage">100% of the equity interest of Taoping New Media Co., Ltd (“TNM”), a leading media operator in China’s out-of-home digital advertising industry. Mr. Jianghuai Lin, the Chairman and Co-Chief Executive Officer of the Company, who then owned approximately 24.6% of total shares outstanding of the Company, owned approximately <span id="xdx_90E_eus-gaap--BusinessAcquisitionPercentageOfVotingInterestsAcquired_iI_pid_dp_c20210630__us-gaap--BusinessAcquisitionAxis__custom--TaopingNewMediaCoLtdMember__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--MrJianghuaiLinMember_z3jRZ1Toi589" title="Equity interest acquired, percentage">51% of TNM. TNM focuses on digital life scenes and is mainly engaged in selling out-of-home advertising time slots on its networked smart digital advertising display terminals with artificial intelligence and big data technologies. The acquisition of TNM has enhanced the Company’s presence in the new media and advertising sectors. In 2021, the Company launched blockchain related new business in cryptocurrency mining operations and newly established subsidiaries in Hong Kong to supplement its diminished Traditional Information Technology (TIT) business segment as a part of new business transformation. However, due to the decreased output and the highly volatile cryptocurrency market, the Company had ceased the operation of cryptocurrency mining business by December 2022, and continues to focus the efforts on its digital advertising, smart display and the newly added smart community and related businesses. In September 2021, the Company and the Company’s wholly owned subsidiary, Information Security Technology (China) Co., Ltd. (“IST”) entered into an equity transfer agreement with Mr. Jianghuai Lin, the sole shareholder of iASPEC Technology Group Co., Ltd. (“iASPEC”). Upon closing of the equity transfer, the Company’s variable interest entity structure was dissolved and iASPEC became a wholly owned indirect subsidiary of the Company. In January 2022, the Company completed the acquisition of <span id="xdx_900_eus-gaap--BusinessAcquisitionPercentageOfVotingInterestsAcquired_iI_pid_dp_uPure_c20220131__us-gaap--BusinessAcquisitionAxis__custom--ZhenjiangTaopingIoTTechCoLtdZJIOTMember_zfIGmArDy91l" title="Equity interest acquired, percentage">100% equity interest of Zhenjiang Taoping IoT Tech. Co., Ltd (“ZJIOT”), aiming to accelerate the Company’s smart charging pile and digital new media businesses in East China. As a result of the Company’s business transformation and its exit from the TIT business, the Company disposed of <span id="xdx_903_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_uPure_c20221231__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--IASPECTechnologyGroupCoLtdiASPECMember_zSIgbfB1UMc3" title="Equity method investment, ownership percentage">100% equity interests of iASPEC (excluding iASPEC’s subsidiaries) which mainly conducted the Company’s TIT business to an unrelated third party for <span id="xdx_90C_eus-gaap--DisposalGroupIncludingDiscontinuedOperationConsideration_iI_dxL_c20220607__us-gaap--DisposalGroupClassificationAxis__custom--IASPECTechnologyGroupCoLtdiASPECMember_zCzSk8XaXdSd" title="Disposal group including discontinued operation, consideration::XDX::-">nil consideration on June 7, 2022. The disposition resulted in a total recorded income of approximately $<span id="xdx_90E_eus-gaap--DisposalGroupIncludingDiscontinuedOperationOtherIncome_pn5n6_c20220101__20221231__us-gaap--DisposalGroupClassificationAxis__custom--IASPECTechnologyGroupCoLtdiASPECMember_zOlUnAPEy3j2" title="Disposal group including discontinued operation other , Income">3.0 million for the Company for the year ended December 31, 2022. The Company disposed of <span id="xdx_90D_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_uPure_c20230906__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--TaopingDigitalAssetsHongKongLimitedTDLMember_zTXWJwMIpny" title="Equity method investment, ownership percentage">100% equity interests of Taoping Digital Assets (Hong Kong) Limited (“TDL”) to an unrelated third party for <span id="xdx_90B_eus-gaap--DisposalGroupIncludingDiscontinuedOperationConsideration_iI_dxL_c20230906__us-gaap--DisposalGroupClassificationAxis__custom--TaopingDigitalAssetsHongKongLimitedTDLMember_zRYZBsHVggK4" title="Disposal group including discontinued operation, consideration::XDX::-">nil consideration on September 6, 2023, and disposed of <span id="xdx_905_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_uPure_c20231027__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--TaopingCapitalLimitedTCLMember_zNdeqNlW4ds4" title="Equity method investment, ownership percentage">100% equity interests of Taoping Digital Assets (Asia) Limited (“TDAL”) and Taoping Capital Limited (“TCL”) (including their respective subsidiary) to an unrelated third party for <span id="xdx_905_eus-gaap--DisposalGroupIncludingDiscontinuedOperationConsideration_iI_dxL_c20231027__us-gaap--DisposalGroupClassificationAxis__custom--TaopingCapitalLimitedTCLMember_zjIo6XGumNxk" title="Disposal group including discontinued operation, consideration::XDX::-">nil consideration on October 27, 2023. The disposition resulted in a total recorded loss of $16,184 for the Company for the year ended December 31, 2023. In May 2023, the Company established a subsidiary Taoping EP Holdings (Shenzhen) Co., Ltd. (“TEPH”) with a majority stake of <span id="xdx_900_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_uPure_c20230531__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--TaopingEPHoldingsShenzhenCoLtdTEPHMember_zZ1MBlkz5Ymh" title="Ownership percentage">51%, to explore the new off-grid wastewater treatment business line. In September 2023, the Company acquired <span id="xdx_90A_eus-gaap--BusinessAcquisitionPercentageOfVotingInterestsAcquired_iI_pid_dp_uPure_c20230930__us-gaap--BusinessAcquisitionAxis__custom--FujianTaopingInvestmentCoMember_zzp4TCqzlLVi" title="Acquired percentage">80% equity from other shareholders of Fujian Taoping Investment Co., Ltd. with nil consideration, to expand its digital advertising and other businesses in Fujian Province. As a result of the acquisition, the Company currently owns <span id="xdx_90F_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_uPure_c20230930__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--FujianTaopingInvestmentCoMember_zoCtn7w9bD5c" title="Equity method investment, ownership percentage">100% of Fujian Taoping Investment Co, Ltd. In November 2023, the Company established a subsidiary Taoping (Guangxi) EP Tech. Co., Ltd. (“TPGXT”) to expand its waste water treatment business in Guangxi Province. In April 2024, the Company established a subsidiary Taoping Industrial (Yunnan) Co., Ltd. (“TIYN”) to explore smart agricultural related businesses in Yunnan Province. In June 2024, ZJIOT was dissolved as a result of the Company’s business realignment. In January 2025, TDTJS was dissolved as a result of the Company’s business realignment. In April 2025, TEPH was dissolved as a result of the Company’s business realignment. In June 2025, TPGXT was dissolved as a result of the Company’s business realignment. In September 2025, through its wholly owned subsidiary Taoping Holdings Limited, the Company entered into a share purchase agreement with Skyladder Holding Limited, as amended by a supplemental agreement dated November 25, 2025, to acquire <span id="xdx_905_eus-gaap--BusinessAcquisitionPercentageOfVotingInterestsAcquired_iI_pid_dp_uPure_c20250930__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zwWFEM8TKUea" title="Equity interest acquired, percentage">100% of Skyladder Group Limited, or Skyladder Group, a Hong Kong company, for consideration of RMB <span id="xdx_900_eus-gaap--BusinessAcquisitionCostOfAcquiredEntityTransactionCosts_iI_pn6n6_uRMB_c20250930__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_z2aY4AXS5E4" title="Business acquisition cost">152 million (approximately US$<span id="xdx_909_eus-gaap--BusinessAcquisitionCostOfAcquiredEntityTransactionCosts_iI_pn4n6_c20250930__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zgt9VGghg4x" title="Business acquisition cost">21.36 million), payable in an aggregate of <span id="xdx_90B_eus-gaap--BusinessAcquisitionEquityInterestsIssuedOrIssuableNumberOfSharesIssued_c20250901__20250930__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zNL9lCMf8jDe" title="Business acquisition, shares issued, shares">7,882,921 ordinary shares of the Company. Such consideration shares are subject to transfer restrictions, released in tranches upon achievement of audited revenue and net profit targets for 2025–2029. The acquisition was closed on November 26, 2025. Skyladder Group is a provider of elevator products and related physical and cloud-based services. It provides services throughout the entire elevator lifecycle including sales, installation, repair, maintenance, renovation, and upgrades. Skyladder Group operates through subsidiaries in China. On March 13, 2026, the Company disposed of its <span id="xdx_90C_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_uPure_c20260313__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--BannaTaopingAgriculturalTechCoLtdMember_zTm4b0E8B1A2" title="Equity method investment, ownership percentage">60% equity interest in Banna Taoping Agricultural Tech. Co., Ltd. (“BTAT”) to an unrelated third party for consideration of RMB <span id="xdx_90C_eus-gaap--BusinessAcquisitionCostOfAcquiredEntityTransactionCosts_iI_uRMB_c20260313__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zhjzedNUyNsi" title="Business acquisition cost">360,000, and as a result, the Company no longer holds any equity interest in BTAT. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS The following table lists our subsidiaries as of the respective date as indicated below. SCHEDULE OF SUBSIDIARIES AND VARIABLE INTEREST ENTITY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: center">June 30, 2026</td><td> </td><td> </td> <td style="text-align: center">December 31, 2025</td><td> </td><td> </td> <td style="text-align: center">December 31, 2024</td><td> </td><td> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Entities</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Subsidiaries</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">% owned</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">% owned</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">% owned</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Location</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Taoping Inc.</td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">British Virgin Islands</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 41%; text-align: left">Taoping Holdings Limited (THL)</td><td style="width: 2%"> </td> <td style="width: 8%; text-align: center">Subsidiary</td><td style="width: 2%"> </td> <td style="width: 8%; text-align: right">100</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 8%; text-align: right">100</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 8%; text-align: right">100</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 14%; text-align: center">British Virgin Islands</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Taoping Group (China) Ltd. (IST HK)</td><td> </td> <td style="text-align: center">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Hong Kong, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Information Security Tech. (China) Co., Ltd. (IST)</td><td> </td> <td style="text-align: center">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">TopCloud Software (China) Co., Ltd. (TopCloud)</td><td> </td> <td style="text-align: center"><span id="xdx_902_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TopCloudSoftwareChinaCoLtdTopCloudMember_zwf9bMC7eJZ1" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_90C_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--TopCloudSoftwareChinaCoLtdTopCloudMember_zI5rJ4JyGCf4" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_909_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--TopCloudSoftwareChinaCoLtdTopCloudMember_zWABpUUs8yCh" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90B_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--TopCloudSoftwareChinaCoLtdTopCloudMember_zwmkDhaiBVHh" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Information Security IoT Tech. Co., Ltd. (ISIOT)</td><td> </td> <td style="text-align: center"><span id="xdx_905_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--InformationSecurityIOTTechCoLtdISIOTMember_z1atwGD4d0D2" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_902_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--InformationSecurityIOTTechCoLtdISIOTMember_zX0b2UwPSHJ6" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_900_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--InformationSecurityIOTTechCoLtdISIOTMember_zeFiXHO0nCi8" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90E_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--InformationSecurityIOTTechCoLtdISIOTMember_zN0OcajWrUj8" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Biznest Internet Tech. Co., Ltd. (Biznest)</td><td> </td> <td style="text-align: center"><span id="xdx_90B_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--BiznestInternetTechCoLtdBiznestMember_zstCuLuwKt81" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_90F_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--BiznestInternetTechCoLtdBiznestMember_zj03bshIqlmg" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_900_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--BiznestInternetTechCoLtdBiznestMember_zP8J60GHSl0k" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_907_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--BiznestInternetTechCoLtdBiznestMember_z7ur885hFpg6" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">iASPEC Bocom IoT Tech. Co., Ltd. (Bocom)</td><td> </td> <td style="text-align: center">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_905_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--IASPECBocomIoTTechCoLtdBocomMember_zf1u7m5JtnLg" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_905_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--IASPECBocomIoTTechCoLtdBocomMember_zu142qupbCdg" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_902_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--IASPECBocomIoTTechCoLtdBocomMember_z1jyvUao7gRg" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Taoping New Media Co., Ltd. (TNM)</td><td> </td> <td style="text-align: center">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Taoping Digital Tech. (Jiangsu) Co., Ltd. (TDTJS)</td><td> </td> <td style="text-align: center"><span id="xdx_903_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingDigitalTechJiangsuCoLtdTDTJSMember_zLK9PGvuykuk" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_902_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingDigitalTechJiangsuCoLtdTDTJSMember_zMhWgngbMvG4" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"><span id="xdx_90E_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--TaopingDigitalTechJiangsuCoLtdTDTJSMember_zzOYBUWOOac4" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"><span id="xdx_90D_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--TaopingDigitalTechJiangsuCoLtdTDTJSMember_z7SkJthVRbC5" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Jiangsu, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Taoping EP Holdings (Shenzhen) Co., Ltd. (TEPH)</td><td> </td> <td style="text-align: center"><span id="xdx_90B_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingEPHoldingsShenzhenCoLtdTEPHMember_zSxxn5gx7os" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_900_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingEPHoldingsShenzhenCoLtdTEPHMember_zVGl3kXBAGGc" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"><span id="xdx_903_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--TaopingEPHoldingsShenzhenCoLtdTEPHMember_zioWxzxnNF1a" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"><span id="xdx_904_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--TaopingEPHoldingsShenzhenCoLtdTEPHMember_zFphYJKOU2g9" title="Percentage owned">51</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Fujian Taoping Investment Co., Ltd. (FJTI)</td><td> </td> <td style="text-align: center"><span id="xdx_90E_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--FujianTaopingInvestmentCoLtdFJTIMember_zGxvjtXwlnD1" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_904_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--FujianTaopingInvestmentCoLtdFJTIMember_z67yO3tWNjh7" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90B_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--FujianTaopingInvestmentCoLtdFJTIMember_zBccqwM8XUZf" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_908_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--FujianTaopingInvestmentCoLtdFJTIMember_zh67Q3H0srXa" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Fujian, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Taoping (Guangxi) EP Tech. Co., Ltd. (TPGXT)</td><td> </td> <td style="text-align: center"><span id="xdx_907_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingGuangxiEPTechCoLtdTPGXTMember_zkMZEkjkBXya" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Guangxi, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Taoping Industrial (Yunnan) Co., Ltd. (TIYN)</td><td> </td> <td style="text-align: center"><span id="xdx_901_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingIndustrialYunnanCoLtdTIYNMember_z4GgDy7MB5z9" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_900_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingIndustrialYunnanCoLtdTIYNMember_z2beEgDj236k" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90D_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--TaopingIndustrialYunnanCoLtdTIYNMember_zBYw7hxF6iZa" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_902_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--TaopingIndustrialYunnanCoLtdTIYNMember_zr08Ze7LB1qb" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Yunnan, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Skyladder Group Limited (SGL)</td><td> </td> <td style="text-align: center">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Hong Kong, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Skyladder (Tianjin) Technology Development Co., Ltd. (STTD)</td><td> </td> <td style="text-align: center"><span id="xdx_90C_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--SkyladderTianjinTechnologyDevelopmentCoLtdSTTDMember_zxMVOu2Hk0Le" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_909_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--SkyladderTianjinTechnologyDevelopmentCoLtdSTTDMember_zZg4kGkA8rD" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_901_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--SkyladderTianjinTechnologyDevelopmentCoLtdSTTDMember_zBdkWpVMOAV" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_908_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--SkyladderTianjinTechnologyDevelopmentCoLtdSTTDMember_z1Cylp2IeLU9" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Tianjin, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Shenzhen Smart Skyladder IoT Co., Ltd. (SZSS)</td><td> </td> <td style="text-align: center"><span id="xdx_908_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--ShenzhenSmartSkyladderIoTCoLtdSZSSMember_zz3WlMo3wWr4" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_909_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--ShenzhenSmartSkyladderIoTCoLtdSZSSMember_zUoAzDrUzYif" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_904_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--ShenzhenSmartSkyladderIoTCoLtdSZSSMember_zhf3wmlyGSXe" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90C_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--ShenzhenSmartSkyladderIoTCoLtdSZSSMember_zNC1CmYClW2" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Tianjin Zeyuan Elevator Co., Ltd. (TJZY)</td><td> </td> <td style="text-align: center"><span id="xdx_906_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TianjinZeyuanElevatorCoLtdTJZYMember_zyC8m8ra2TJe" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Tianjin, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Skyladder New Century (Tianjin) IoT Technology Co., Ltd. (SNCT)</td><td> </td> <td style="text-align: center"><span id="xdx_902_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--SkyladderNewCenturyTianjinIoTTechnologyCoLtdSNCTMember_zpO8g3daTzD4" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_90A_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--SkyladderNewCenturyTianjinIoTTechnologyCoLtdSNCTMember_zEyDPgtwGm8d" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90A_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--SkyladderNewCenturyTianjinIoTTechnologyCoLtdSNCTMember_zvMVZnRtj4Ig" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90F_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--SkyladderNewCenturyTianjinIoTTechnologyCoLtdSNCTMember_zo1yciZFvoEj" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Tianjin, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Tianjin Weida Elevator Co., Ltd. (TJWD)</td><td> </td> <td style="text-align: center"><span id="xdx_903_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TianjinWeidaElevatorCoLtdTJWDMember_zAM6I4nbfObk" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Tianjin, China</td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Going Concern and Management’s Plans As a result of business transformation, the Company’s revenue was decreased period-over-period in the first half of 2026. The Company incurred a net loss of approximately $2.5 million for the six months ended June 30, 2026, compared to a net loss of approximately $4.7 million for the same period of 2025. The Company reported negative cash flows from operations of approximately $2.4 million for the six months ended June 30, 2026, compared to negative cash flows of $1.5 million from operations for the same period of 2025. The negative operating cash flow was primarily attributable to the increase in other receivables and prepaid expenses and the decrease in accounts payable. As of June 30, 2026, the Company had a working capital surplus of approximately $10.6 million, compared to a working capital surplus of $12.3 million as of December 31, 2025. The Company will continue to invest efforts on diversifying its existing cloud-based product and service lines through strategic collaborations and acquisitions. In November 2025, the Company completed the acquisition of Skyladder Group, a provider of elevator products and related physical and cloud-based services. Based on the government policies which advocate the modification and replacement of old elevators, more confirmed orders/contracts have been obtained by Skyladder Group in 2026. From the confirmed orders/contracts on hand, Skyladder Group is expected to achieve significant revenue growth in 2026, which is expected to improve the Company’s operating cash flow by year-end 2026. The Company considers the legacy market in China is competitive, in particular the escalated tariff environment and geopolitical disorders would raise significant uncertainty to the Company’s businesses. If the Company cannot effectively execute the confirmed orders/contracts for achieving more positive operating cash flows, additional capital raise from issuing equity security or debt instrument or additional loan facility may have to be considered to support required cash flows. The Company’s existing $5.5 million in short-term bank loans and $5.7 million in long-term bank loans, of which $3.7 million of the short-term bank loans are unsecured while the remaining loans were guaranteed and/or collateralized by the Company’s office properties, provide important capital support for its operations. On July 15, 2026, the Company entered into a Securities Purchase Agreement with Streeterville Capital, LLC (the “Investor”), pursuant to which the Company issued an unsecured convertible promissory note with a 12-month maturity (the “Convertible Note”) to the Investor. The Convertible Note has the original principal amount of $3,195,000 including the original issue discount of $180,000 and Investor’s legal and other transaction costs of $15,000. Net proceeds received by the Company from this transaction were approximately $3.0 million. From above, the Company believes that it has the ability to raise needed capital to maintain its operations, repay short term loans and fund business growth, and is able to operate as a going concern. However, the Company considered the recent fluctuation in Nasdaq market and can make no assurances that financing will be always available for the amounts we need, or on terms commercially acceptable to us, if at all. If one or all of these businesses and/or strategies do not go well or subsequent capital raise was insufficient to bridge financial and liquidity shortfall, substantial doubt exists about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

0.246

0.51

3000000.0

-16184

0.51

0.80

152000000

21360000

7882921

0.60

360000

The following table lists our subsidiaries as of the respective date as indicated below. SCHEDULE OF SUBSIDIARIES AND VARIABLE INTEREST ENTITY <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: center">June 30, 2026</td><td> </td><td> </td> <td style="text-align: center">December 31, 2025</td><td> </td><td> </td> <td style="text-align: center">December 31, 2024</td><td> </td><td> </td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Entities</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Subsidiaries</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">% owned</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">% owned</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">% owned</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Location</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Taoping Inc.</td><td> </td> <td style="text-align: center"> </td><td> </td> <td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">British Virgin Islands</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 41%; text-align: left">Taoping Holdings Limited (THL)</td><td style="width: 2%"> </td> <td style="width: 8%; text-align: center">Subsidiary</td><td style="width: 2%"> </td> <td style="width: 8%; text-align: right">100</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 8%; text-align: right">100</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 8%; text-align: right">100</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 14%; text-align: center">British Virgin Islands</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Taoping Group (China) Ltd. (IST HK)</td><td> </td> <td style="text-align: center">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Hong Kong, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Information Security Tech. (China) Co., Ltd. (IST)</td><td> </td> <td style="text-align: center">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">TopCloud Software (China) Co., Ltd. (TopCloud)</td><td> </td> <td style="text-align: center"><span id="xdx_902_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TopCloudSoftwareChinaCoLtdTopCloudMember_zwf9bMC7eJZ1" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_90C_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--TopCloudSoftwareChinaCoLtdTopCloudMember_zI5rJ4JyGCf4" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_909_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--TopCloudSoftwareChinaCoLtdTopCloudMember_zWABpUUs8yCh" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90B_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--TopCloudSoftwareChinaCoLtdTopCloudMember_zwmkDhaiBVHh" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Information Security IoT Tech. Co., Ltd. (ISIOT)</td><td> </td> <td style="text-align: center"><span id="xdx_905_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--InformationSecurityIOTTechCoLtdISIOTMember_z1atwGD4d0D2" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_902_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--InformationSecurityIOTTechCoLtdISIOTMember_zX0b2UwPSHJ6" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_900_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--InformationSecurityIOTTechCoLtdISIOTMember_zeFiXHO0nCi8" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90E_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--InformationSecurityIOTTechCoLtdISIOTMember_zN0OcajWrUj8" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Biznest Internet Tech. Co., Ltd. (Biznest)</td><td> </td> <td style="text-align: center"><span id="xdx_90B_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--BiznestInternetTechCoLtdBiznestMember_zstCuLuwKt81" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_90F_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--BiznestInternetTechCoLtdBiznestMember_zj03bshIqlmg" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_900_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--BiznestInternetTechCoLtdBiznestMember_zP8J60GHSl0k" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_907_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--BiznestInternetTechCoLtdBiznestMember_z7ur885hFpg6" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">iASPEC Bocom IoT Tech. Co., Ltd. (Bocom)</td><td> </td> <td style="text-align: center">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_905_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--IASPECBocomIoTTechCoLtdBocomMember_zf1u7m5JtnLg" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_905_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--IASPECBocomIoTTechCoLtdBocomMember_zu142qupbCdg" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_902_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--IASPECBocomIoTTechCoLtdBocomMember_z1jyvUao7gRg" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Taoping New Media Co., Ltd. (TNM)</td><td> </td> <td style="text-align: center">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Taoping Digital Tech. (Jiangsu) Co., Ltd. (TDTJS)</td><td> </td> <td style="text-align: center"><span id="xdx_903_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingDigitalTechJiangsuCoLtdTDTJSMember_zLK9PGvuykuk" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_902_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingDigitalTechJiangsuCoLtdTDTJSMember_zMhWgngbMvG4" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"><span id="xdx_90E_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--TaopingDigitalTechJiangsuCoLtdTDTJSMember_zzOYBUWOOac4" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"><span id="xdx_90D_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--TaopingDigitalTechJiangsuCoLtdTDTJSMember_z7SkJthVRbC5" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Jiangsu, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Taoping EP Holdings (Shenzhen) Co., Ltd. (TEPH)</td><td> </td> <td style="text-align: center"><span id="xdx_90B_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingEPHoldingsShenzhenCoLtdTEPHMember_zSxxn5gx7os" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_900_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingEPHoldingsShenzhenCoLtdTEPHMember_zVGl3kXBAGGc" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"><span id="xdx_903_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--TaopingEPHoldingsShenzhenCoLtdTEPHMember_zioWxzxnNF1a" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right"><span id="xdx_904_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--TaopingEPHoldingsShenzhenCoLtdTEPHMember_zFphYJKOU2g9" title="Percentage owned">51</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Fujian Taoping Investment Co., Ltd. (FJTI)</td><td> </td> <td style="text-align: center"><span id="xdx_90E_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--FujianTaopingInvestmentCoLtdFJTIMember_zGxvjtXwlnD1" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_904_eus-gaap--VariableInterestEntityOwnershipPercentage_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--FujianTaopingInvestmentCoLtdFJTIMember_z67yO3tWNjh7" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90B_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--FujianTaopingInvestmentCoLtdFJTIMember_zBccqwM8XUZf" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_908_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--FujianTaopingInvestmentCoLtdFJTIMember_zh67Q3H0srXa" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Fujian, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Taoping (Guangxi) EP Tech. Co., Ltd. (TPGXT)</td><td> </td> <td style="text-align: center"><span id="xdx_907_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingGuangxiEPTechCoLtdTPGXTMember_zkMZEkjkBXya" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Guangxi, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Taoping Industrial (Yunnan) Co., Ltd. (TIYN)</td><td> </td> <td style="text-align: center"><span id="xdx_901_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingIndustrialYunnanCoLtdTIYNMember_z4GgDy7MB5z9" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_900_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--TaopingIndustrialYunnanCoLtdTIYNMember_z2beEgDj236k" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90D_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--TaopingIndustrialYunnanCoLtdTIYNMember_zBYw7hxF6iZa" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_902_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--TaopingIndustrialYunnanCoLtdTIYNMember_zr08Ze7LB1qb" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: center">Yunnan, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Skyladder Group Limited (SGL)</td><td> </td> <td style="text-align: center">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Hong Kong, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Skyladder (Tianjin) Technology Development Co., Ltd. (STTD)</td><td> </td> <td style="text-align: center"><span id="xdx_90C_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--SkyladderTianjinTechnologyDevelopmentCoLtdSTTDMember_zxMVOu2Hk0Le" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_909_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--SkyladderTianjinTechnologyDevelopmentCoLtdSTTDMember_zZg4kGkA8rD" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_901_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--SkyladderTianjinTechnologyDevelopmentCoLtdSTTDMember_zBdkWpVMOAV" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_908_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--SkyladderTianjinTechnologyDevelopmentCoLtdSTTDMember_z1Cylp2IeLU9" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Tianjin, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Shenzhen Smart Skyladder IoT Co., Ltd. (SZSS)</td><td> </td> <td style="text-align: center"><span id="xdx_908_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--ShenzhenSmartSkyladderIoTCoLtdSZSSMember_zz3WlMo3wWr4" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_909_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--ShenzhenSmartSkyladderIoTCoLtdSZSSMember_zUoAzDrUzYif" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_904_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--ShenzhenSmartSkyladderIoTCoLtdSZSSMember_zhf3wmlyGSXe" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90C_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--ShenzhenSmartSkyladderIoTCoLtdSZSSMember_zNC1CmYClW2" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Shenzhen, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Tianjin Zeyuan Elevator Co., Ltd. (TJZY)</td><td> </td> <td style="text-align: center"><span id="xdx_906_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TianjinZeyuanElevatorCoLtdTJZYMember_zyC8m8ra2TJe" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Tianjin, China</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Skyladder New Century (Tianjin) IoT Technology Co., Ltd. (SNCT)</td><td> </td> <td style="text-align: center"><span id="xdx_902_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--SkyladderNewCenturyTianjinIoTTechnologyCoLtdSNCTMember_zpO8g3daTzD4" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right"><span id="xdx_90A_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--SkyladderNewCenturyTianjinIoTTechnologyCoLtdSNCTMember_zEyDPgtwGm8d" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90A_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20250101__20251231__dei--LegalEntityAxis__custom--SkyladderNewCenturyTianjinIoTTechnologyCoLtdSNCTMember_zvMVZnRtj4Ig" title="Percentage owned">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right"><span id="xdx_90F_eus-gaap--VariableInterestEntityOwnershipPercentage_dp_uPure_c20240101__20241231__dei--LegalEntityAxis__custom--SkyladderNewCenturyTianjinIoTTechnologyCoLtdSNCTMember_zo1yciZFvoEj" title="Percentage owned">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Tianjin, China</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Tianjin Weida Elevator Co., Ltd. (TJWD)</td><td> </td> <td style="text-align: center"><span id="xdx_903_eus-gaap--VariableInterestEntitySimilarEntityAggregationDescription_c20260101__20260630__dei--LegalEntityAxis__custom--TianjinWeidaElevatorCoLtdTJWDMember_zAM6I4nbfObk" title="Subsidiaries">Subsidiary</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">100</td><td style="text-align: left">%</td><td> </td> <td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: center">Tianjin, China</td></tr> </table>

Taoping Inc. British Virgin Islands Taoping Holdings Limited (THL)

Subsidiary

British Virgin Islands Taoping Group (China) Ltd. (IST HK)

Subsidiary

Hong Kong, China Information Security Tech. (China) Co., Ltd. (IST)

Subsidiary

Shenzhen, China TopCloud Software (China) Co., Ltd. (TopCloud)

Subsidiary

Shenzhen, China Information Security IoT Tech. Co., Ltd. (ISIOT)

Subsidiary

Shenzhen, China Biznest Internet Tech. Co., Ltd. (Biznest)

Subsidiary

Shenzhen, China iASPEC Bocom IoT Tech. Co., Ltd. (Bocom)

Subsidiary

Shenzhen, China Taoping New Media Co., Ltd. (TNM)

Subsidiary

Shenzhen, China Taoping Digital Tech. (Jiangsu) Co., Ltd. (TDTJS)

Subsidiary

Jiangsu, China Taoping EP Holdings (Shenzhen) Co., Ltd. (TEPH)

Subsidiary

0.51

Shenzhen, China Fujian Taoping Investment Co., Ltd. (FJTI)

Subsidiary

Fujian, China Taoping (Guangxi) EP Tech. Co., Ltd. (TPGXT)

Subsidiary

Guangxi, China Taoping Industrial (Yunnan) Co., Ltd. (TIYN)

Subsidiary

Yunnan, China Skyladder Group Limited (SGL)

Subsidiary

Hong Kong, China Skyladder (Tianjin) Technology Development Co., Ltd. (STTD)

Subsidiary

Tianjin, China Shenzhen Smart Skyladder IoT Co., Ltd. (SZSS)

Subsidiary

Shenzhen, China Tianjin Zeyuan Elevator Co., Ltd. (TJZY)

Subsidiary

Tianjin, China Skyladder New Century (Tianjin) IoT Technology Co., Ltd. (SNCT)

Subsidiary

Tianjin, China Tianjin Weida Elevator Co., Ltd. (TJWD)

Subsidiary

Tianjin, China

-2500000

-4700000

-2400000

-1500000

-10600000 -12300000

5500000

5700000

3700000

3195000

180000

15000

3000000.0

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation and Principles of Consolidation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made that are necessary to present fairly the financial position, the results of its operations and cash flows. The consolidated financial statements include the accounts of the Company, and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Reverse Stock Split: A one-for-thirty reverse stock split of the Company’s issued and outstanding ordinary shares was effective on May 29, 2025 (the “Reverse Stock Split”). Except shares authorized, all share and per share information has been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated. (b) Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company’s significant estimates include estimates used in business acquisition, goodwill assessment, going concern assessment and assessment of credit losses. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (c) Economic, Pandemic, Political, and Currency Exchange Risks All the Company’s revenue-generating operations are conducted in mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, public health, and legal environments in the PRC, and by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks that are not typically pertaining to the companies in North America and Western Europe. These include risks associated with, among others, the political, economic, public health concerns, and legal environments, geopolitical influences, and foreign currency exchange, notably in recent events, where the government’s sudden interventions or modifications of the laws and regulations currently in effective could negatively impact the Company’s operations and financial results. The functional currency of the Company is primarily Chinese Renminbi Yuan (“RMB”), which is not freely convertible into foreign currencies. The Company cannot guarantee that the current exchange rate will remain steady. Therefore, there is a possibility that the Company could post the same amount of profit for two comparable periods and yet, because of fluctuating exchange rates, record higher or lower profit depending on exchange rate of RMB. RMB converted to U.S. dollars on the relevant dates. The exchange rate could fluctuate depending on changes in the political and economic environment without notice. (d) Cash and Cash Equivalents The Company considers all highly liquid investments purchased and cash deposits with financial institutions with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents other than bank and cash as of June 30, 2026 or December 31, 2025. The Company maintains its bank accounts at credit worthy financial institutions and closely monitors the movements of its cash positions. As of June 30, 2026, and December 31, 2025, approximately $1.0 million and $2.1 million of cash, respectively, was held in bank accounts in Hong Kong and mainland China. (e) Restricted Cash Restricted cash represents the bank deposit frozen by the court as a result of legal proceedings. As of June 30, 2026 and December 31, 2025, the Company had restricted cash balance of $12,000 and nil, respectively. (f) Accounts Receivable, Accounts Receivable – related parties, and Concentration of Risk Accounts receivable are recognized and carried at carrying amount less an allowance for credit loss, if any. The Company maintains an allowance for credit losses resulting from the inability of its customers to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis according to historical trend, and estimates its provision for expected credit losses on receivables aging analysis. In addition, the Company estimates allowance for credit losses for the anticipation of future economic condition and credit risk indicators of customers. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. In the event the Company recovers amounts previously reserved for, the Company will reduce the specific allowance for credit losses. The balance of allowance for credit losses for the six month ended June 30, 2026 has increased by approximately $1.5 million from the year ended December 31, 2025. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Accounts receivable as of June 30, 2026 and December 31, 2025 are as follows: SCHEDULE OF ACCOUNTS RECEIVABLE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_493_20260630_zX5V6RSBhO71" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_492_20251231_zPCeTuR5KLZ8" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--AccountsReceivableGrossCurrent_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--NonrelatedPartyMember_maARNCzMzr_zSkO6l1YczGe" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: justify">Accounts Receivable</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">18,897,430</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">17,500,166</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--AllowanceForDoubtfulAccountsReceivableCurrent_iNI_di_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--NonrelatedPartyMember_msARNCzMzr_z3DUwJotm71h" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Allowance for credit losses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(10,067,840</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(8,518,902</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--AccountsReceivableNetCurrent_iTI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--NonrelatedPartyMember_mtARNCzMzr_zln8YW6WcDo8" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Accounts Receivable, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,829,590</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,981,264</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--AccountsReceivableGrossCurrent_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_maARRPCzpFP_zQfzuiBQ1ybg" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accounts Receivable - related parties</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">112</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">398,538</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--AllowanceForDoubtfulAccountsReceivableCurrent_iNI_di_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_msARNCzMzr_zjFClc4Czua8" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Allowance for credit losses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(112</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(139,796</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--AccountsReceivableNetCurrent_iTI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_mtARRPCzpFP_zYnGjzKlOYqj" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Accounts Receivable - related parties, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">258,742</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The normal credit term is ranging from 1 month to 3 months after the customers’ acceptance of data storage servers or software, and completion of advertising and other services, and ranging from 1 month to 6 months after the customers’ acceptance of ads display terminals. The normal credit term for elevator project, maintenance, repair and operations supply and services is ranging from 3 months to 6 months. However, because of various factors related to the business cycle, the actual collection of outstanding accounts receivable may be beyond the normal credit terms. The allowance for credit losses at June 30, 2026 and December 31, 2025, totaled approximately $10.1 million and $8.7 million, respectively, representing management’s best estimate. The following table describes the movements for allowance for credit losses during the six month period ended June 30, 2026 and the year ended December 31, 2025: SCHEDULE OF ALLOWANCE FOR CREDIT LOSSES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 80%; text-align: justify">Balance at January 1, 2025</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iS_c20250101__20251231_zXWEx87GNXt4" style="width: 16%; text-align: right" title="Allowance for credit losses, beginning">7,688,491</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Increase in allowance for credit losses</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--AllowanceForDoubtfulAccountsReceivablePeriodIncreaseDecrease_c20250101__20251231_zzJWvtgt5MWc" style="text-align: right" title="Increase in allowance for credit losses">4,931,702</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Amounts recovered during the year</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--AllowanceForDoubtfulAccountsReceivableRecoveries_iN_di_c20250101__20251231_zqMvQh45v2U1" style="text-align: right" title="Amounts recovered during the year">(19,167</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Decrease from dissolution of a subsidiary</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_ecustom--DecreaseFromDissolutionOfASubsidiary_c20250101__20251231_z4SkDgSI64ni" style="text-align: right" title="Decrease from dissolution of a subsidiary">(228,958</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Amounts written off as uncollectible</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--AllowanceForDoubtfulAccountsReceivableWriteOffs_iN_di_c20250101__20251231_zQmJHvXfcjk6" style="text-align: right" title="Amounts written off as uncollectible">(4,001,169</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1pt">Foreign exchange difference</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_986_ecustom--ForeignExchangeDifference_c20250101__20251231_z4dNBTUtcJd6" style="border-bottom: Black 1pt solid; text-align: right" title="Foreign exchange difference">287,799</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Balance at December 31, 2025</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iS_c20260101__20260630_zSGkH1pzGZUb" style="text-align: right" title="Allowance for credit losses, beginning">8,658,698</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Increase in allowance for credit losses</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--AllowanceForDoubtfulAccountsReceivablePeriodIncreaseDecrease_c20260101__20260630_zFIgyxZ4PwS8" style="text-align: right" title="Increase in allowance for credit losses">1,051,848</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Impairment losses reversed</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_ecustom--ImpairmentLossesReversed_c20260101__20260630_zZMDlIbKLbAh" style="text-align: right" title="Impairment losses reversed">(490,306</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Foreign exchange difference</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_ecustom--ForeignExchangeDifference_c20260101__20260630_zMOF6MCzRGI1" style="border-bottom: Black 1pt solid; text-align: right" title="Foreign exchange difference">847,712</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Balance at June 30, 2026 (Unaudited)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iE_c20260101__20260630_zLodaBypNj7g" style="border-bottom: Black 2.5pt double; text-align: right" title="Allowance for credit losses, ending">10,067,952</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (g) Advances to Suppliers, net Advances to suppliers include but are not limited to cash deposits for the purchase of inventory items and super-computing server machines from suppliers. For the six months ended June 30, 2026 and 2025, the increase in allowance for credit losses for advances to suppliers was approximately $<span id="xdx_90F_eus-gaap--AllowanceForDoubtfulAccountsReceivablePeriodIncreaseDecrease_c20260101__20260630__srt--TitleOfIndividualAxis__custom--SuppliersMember_zVKVY8X3iRh3" title="Increase in allowance for credit losses">94,000 and $<span id="xdx_908_eus-gaap--AllowanceForDoubtfulAccountsReceivablePeriodIncreaseDecrease_c20250101__20250630__srt--TitleOfIndividualAxis__custom--SuppliersMember_zaNeMVLRh8r6" title="Increase in allowance for credit losses">69,000, respectively. (h) Contract Assets and Contract Liabilities Projects with performance obligations recognized over time that have revenue recognized to date in excess of cumulative billings are reported on our consolidated balance sheets as “contract assets”. Provisions for estimated losses of contract assets on uncompleted contracts are made in the period in which such losses are determined. As of June 30, 2026 and December 31, 2025, the Company had contract assets of $701,000 and $789,000, respectively. The amounts of contract assets are expected to be recovered within one year. During the periods ended June 30, 2026 and 2025, no provision was made to contract assets. Contract liabilities on uncompleted contracts represent the amounts of cash collected from clients, billings to clients on contracts in advance of work performed and revenue recognized. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. As of June 30, 2026 and December 31, 2025, the Company had contract liabilities of $1,299,000 and $nil, respectively. (i) Advances from Customers and Related Parties Advances from customers and related parties represent cash received from customers and related parties as advance payments for the purchases of the Company’s products and services. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (j) Fair Value and Fair Value Measurement of Financial Instruments Management has estimated that carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, accounts receivable – related parties, advances to suppliers, contract assets, other current assets, short-term bank loans, long-term bank loans, accounts payable, advances from customers, advances from customers - related parties, accrued payroll and benefits, other payables and accrued expenses, income taxes payable, and due to related parties approximate their fair market value based on the short-term maturity of these instruments. (k) Fair Value Accounting Financial Accounting Standards Board (FASB) Accounting Standards Codifications (ASC) 820-10 “Fair Value Measurements and Disclosures”, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). As required by FASB ASC 820-10, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The three levels of the fair value hierarchy under FASB ASC 820-10 are described below: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.75in; text-align: justify">Level 1</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 2</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 3</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).</td></tr> </table> (l) Inventories, net Inventories are valued at the lower of cost (weighted average basis) and net realizable value. Net realizable value is the expected selling price in the ordinary course of business minus any costs of completion, disposal, and transportation to make the sale. The Company performs an analysis of slow-moving or obsolete inventory periodically and any necessary valuation reserves, which could potentially be significant, are included in the period in which the evaluations are completed. Any inventory impairment results in a new cost basis for accounting purposes. (m) Property, equipment and software Property, equipment and software are stated at cost less accumulated amortization and depreciation. Amortization and depreciation are provided over the assets’ estimated useful lives, using the straight-line method. Estimated useful lives of property, equipment and software are as follows: SCHEDULE OF PROPERTY , EQUIPMENT AND SOFTWARE ESTIMATED USEFUL LIVES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 49%; text-align: justify">Office buildings</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 49%; text-align: right"><span id="xdx_908_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__srt--OfficeBuildingMember__srt--RangeAxis__srt--MinimumMember_ze2rMYCPG0yk" title="Estimated useful life of property, plant and equipment">20-<span id="xdx_902_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__srt--OfficeBuildingMember__srt--RangeAxis__srt--MaximumMember_zJSJ8RQSjzij" title="Estimated useful life of property, plant and equipment">50 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Lease improvement</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_901_eus-gaap--PropertyPlantAndEquipmentUsefulLifeDescriptionOfTermExtensibleEnumeration_iI_dxL_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--LeaseholdImprovementsMember_zbjtz1u5yfsa" title="::XDX::http%3A%2F%2Ffasb.org%2Fus-gaap%2F2026%23UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember">Shorter of lease term or assets lives</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Electronic equipment, furniture and fixtures</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_909_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ElectronicEquipmentFurnitureAndFixturesMember__srt--RangeAxis__srt--MinimumMember_zM2XWfbBCKLf" title="Estimated useful life of property, plant and equipment">3-<span id="xdx_908_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ElectronicEquipmentFurnitureAndFixturesMember__srt--RangeAxis__srt--MaximumMember_zZOo8F3SaDX1" title="Estimated useful life of property, plant and equipment">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Motor vehicles</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90A_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MotorVehiclesMember_zSoIuSWMJoN1" title="Estimated useful life of property, plant and equipment">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Purchased software</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90F_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--PurchasedSoftwareMember__srt--RangeAxis__srt--MinimumMember_z4NprOzutceg" title="Estimated useful life of intangible assets">5-<span id="xdx_900_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--PurchasedSoftwareMember__srt--RangeAxis__srt--MaximumMember_zEwUKO3Ind7" title="Estimated useful life of intangible assets">10 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Media display equipment</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90A_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MediaDisplayEquipmentMember_zTfe0kCGh7Ka" title="Estimated useful life of property, plant and equipment">5 years</td></tr> </table> Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss are included in the Company’s results of operations. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (n) Business combination In accordance with ASC 805, the Company applies acquisition method to account for business combination. The acquisition method requires that the fair value of the underlying exchange transaction is used to establish a new accounting basis of the acquired entity upon the acquirer taking control over the acquiree. Furthermore, because of obtaining control the acquirer is responsible and accountable for all of the acquiree’s assets, liabilities and operations, the acquirer recognizes and measures the assets acquired and liabilities assumed at their full fair values as of the date control is obtained, which may result in goodwill, when purchase consideration exceeds the net of fair value of the assets acquired and liabilities assumed, or a bargain purchase gain, when the net of fair value of the assets acquired and liabilities assumed exceeds the purchase consideration, regardless of the percentage ownership in the acquiree or how the acquisition was achieved. The Company evaluates goodwill for impairment on an annual basis or more frequently if indicators of impairment exist that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company conducts a quantitative goodwill impairment test, which involves comparing the estimated fair value of the reporting unit with its carrying value, including goodwill. The Company estimates the fair value of a reporting unit using the income approach. If the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss is recorded for the difference. (o) Disposal of subsidiary The Company deconsolidates a subsidiary upon the loss of control, the related subsidiary’s assets (including goodwill), liabilities, non-controlling interest and other components of equity are de-recognized. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss. Any consideration received is recognized at fair value. Any resultant gain or loss is recognized in the Statement of Operations. (p) Long-term investment The Company’s long-term investment consists of investments accounted for under the equity method and equity investments without readily determinable fair value. Pursuant to ASC 321, equity investments, except for those accounted for under the equity method, those that result in consolidation of the investee and certain other investments, are measured at fair value, and any changes in fair value are recognized in earnings. For equity securities without readily determinable fair value and do not qualify for the existing practical expedient in ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) to estimate fair value using the net asset value per share (or its equivalent) of the investment, the Company elected to measure those investments at cost, less any impairment (if applicable plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer). For equity investments that the Company elects to measure at cost, less any impairment, the Company makes a qualitative assessment considering impairment indicators to evaluate whether investments are impaired at each reporting date. Impairment indicators considered include, but are not limited to, a significant deterioration in the earnings performance or business prospects of the investee, including factors that raise significant concerns about the investee’s ability to continue as a going concern, a significant adverse change in the regulatory, economic, or technologic environment of the investee and a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates. If a qualitative assessment indicates that the investment is impaired, the entity has to estimate the investment’s fair value in accordance with the principles of ASC 820. For equity investments without readily determinable fair value, the Company uses Level 3 inputs of fair value accounting in accordance with ASC 820-10 and recognizes impairment loss other than temporary in the statement of operations equal to the difference between its initial investment and its proportional share of the net book value of the investee’s net assets which approximates its fair value. For impairment on equity investments without readily determinable fair value, the Company uses Level 3 inputs of fair value accounting in accordance with ASC 820-10 and recognizes impairment loss in the statement of operations equal to the difference between its initial investment and its proportional share of the net book value of investee’s net assets which approximates its fair value if those are determined to be other than temporary. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (q) Convertible promissory note The Company determines the appropriate accounting treatment of its convertible debts in accordance with the terms in relation to conversion features. After considering the impact of such features, the Company may account for such instrument as a liability in its entirety, or separate the instrument into debt and liability and equity components following the guidance described under ASC 815 Derivatives and Hedging and ASC 470 Debt. The debt discount, if any, together with related issuance cost are subsequently amortized as interest expense over the period from the issuance date to the earliest conversion date or stated redemption date. The Company presented the issuance cost of debt in the balance sheet as a direct deduction from the related debt. (r) Impairment of Long-Lived Assets Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Recoverability of assets to be held and used is determined by comparing their carrying amount with their expected future net undiscounted future cash flows from the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by how much the carrying amount exceeds the fair value of the assets. There were no impairment charges for the six months ended June 30, 2026 and 2025. Assets held for disposal, if any, are reported at the lower of the carrying amount or fair value less costs to sell. (s) Operating leases - Right-of-use assets and lease liabilities The Company accounts for lease under ASC 842 “Leases”, and also elects practical expedient not to separate non-lease component from lease components in accordance with ASC 842-10-15-37 and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. The Company also elects the practical expedient not to recognize lease assets and lease liabilities for leases with a term of 12 months or less. The Company recognized a lease liability and corresponding right-of-use asset based on the present value of minimum lease payments discounted at the Company’s incremental borrowing rate. The Company records amortization and interest expense on a straight-line basis based on lease terms and reduces lease liabilities upon making lease payments. (t) Revenue Recognition In accordance with the ASC 606, the Company recognizes revenues net of applicable taxes, when goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to receive in exchange for those goods or services. The Company generates its revenues primarily from six sources: (1) product sales, (2) software sales, (3) advertising, (4) elevator project, and (5) elevator Maintenance, Repair and Operations (“MRO”) and (6) elevator services. Revenue is recognized when obligations under the terms of a contract with our customers are satisfied, generally, upon delivery of the goods and services. Revenue - Products Product revenues are generated primarily from the sale of Cloud-Application-Terminal based digital ads display terminals with integrated software essential to the functionality of the hardware to our customers (inclusive of related parties), high-end data storage servers, super-computing servers and graphic cards. Although manufacturing of the products has been outsourced to the Company’s Original Equipment Manufacturer (OEM) suppliers or directly sourced from the suppliers, the Company has acted as the principal of the contract. The Company recognized the product sales at the point of delivery. Product sales are classified as “Revenue-Products” on the Company’s consolidated statements of operations. Revenue - Software Revenue – software represents software upgrade and maintenance services provided for customers by the Company. The Company recognized the software revenue for software upgrade and maintenance service on a straight-line basis over the contracted service period. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Revenue - Advertising The Company generates revenues primarily from providing advertising slots to customers to promote their businesses by broadcasting advertisements on identifiable digital ads display terminals and vehicular ads display terminals in different geographic regions and locations through a cloud-based new media sharing platform. The Company also contracts individuals to promote special events or for various occasions. The Company is only obligated to broadcast the advertisements to the contracted digital ads display terminals, and therefore allocates 100% of the transaction price to advertisement broadcasting. The transaction price for advertisement broadcasting is fixed based on the numbers of advertisement delivery and duration of the contract, and has no variable consideration, or significant financing component, or subsequent price change, and is not refundable. The Company recognizes the revenues, net of applicable taxes, from advertisement broadcasting contracts with customers over the contracted advertising duration. The Company also generates its advertising revenue through facilitating internet promotion advertising service and recognizes the revenue over the contracted advertising duration. The Company provides advertising services to customers for promotion of their brands and products through internet. For the network promotion advertising contracts, the Company generally recognizes revenue over time, because the customer simultaneously receives and consumes the benefits as the Company performs throughout a fixed contract term. Revenue - Project Project represents two types of revenue, i.e. sales of elevators and elevator installation services. Product revenues are generated from the sale of elevators. The transfer of control is initiated when ordered equipment is delivered to a customer site as then the customer has the ability to direct the use of and obtain substantially all the remaining benefits from. The Company has acted as the principal of the contract. The Company recognized the product sales at the point of delivery. Installation services provide mobility solutions with elevators for all applications and needs. The control is transferred continuously to the customer from the start of the installation of the unit, as the work performed enhances an asset controlled by the customer. Revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which corresponds with and best depicts transfer of control or the enhancement of the customer’s assets. Contract costs included in the calculation are comprised of materials, subcontractors’ costs or other direct costs. In developing the total cost estimates, the Company utilizes a combination of its historical cost experience and expected costs considering current circumstances. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Revenue - MRO MRO represents two types of revenue, i.e. revenues from elevator maintenance services and repairs services. Maintenance services are rendered by the Company for the installations carried out by us and other service providers. Control is transferred to the customer over the contract period based on the time elapsed. Maintenance revenue is recognized over the contract period as the service is provided, according to the agreed contractual terms and conditions. Wide range of repair services are rendered by the Company to the installations carried out by us and other service providers. For repairs, the customer benefits from the service once the repair is completed, revenue is therefore recognized at the point of service completion. Revenue - Service Elevator service represents two types of revenue, i.e. revenues from platform service and consultation services. The Company owns a software which serves a platform providing elevator operational data to the customers through intelligent sensors installed in the elevators and connected to the platform. The customers purchase platform service will be granted periodic access rights to access the platform for the review of operational data of elevators. Given the continuous nature of this service, the Company recognizes revenue from platform service on a straight-line basis which aligns with the cost and benefit profile of this service. Platform revenue is recognized over the contract period as the service is provided. Consultation services include the provision of solutions on technical issues relating to elevators. The revenue is recognized when the service is completed and accepted by the customer. Revenue - Other The Company also reports other revenue, which comprises: (i) revenue from system upgrade and technical support services; (ii) platform service fee; and (iii) rental income. System upgrade and technical support revenue is recognized when performance obligations are satisfied upon completion of the services. Platform service fee is charged based on number of the display terminals used by the customers or a percentage of advertising revenue generated by the display terminals. Platform service revenue is recognized on a monthly basis over the contract period. The Company follows ASC 842 – Leases that requires lessor to identify the underlying assets and allocate rental income among considerations in lease and non-lease components. The Company owns two units of office space. The first unit is leased to a third party with an initial lease term of two years commencing on May 1, 2024 and expiring on April 30, 2026. It was subsequently renewed for an additional three years with the maturity date extended to April 30, 2029. The second unit was leased to another third party with lease term of three years starting from January 1, 2024 to December 31, 2026, but was early terminated on June 30, 2025. The lease agreements have fixed monthly rental payments, and no non-lease component or option for lessees to purchase the underlying assets. The Company collects monthly rental payments from the lessees, and has generated approximately $121,000 and $126,000 rental income for the periods ended June 30, 2026, and 2025, respectively. SCHEDULE OF ANNUAL MINIMUM RENTAL INCOME RECEIVED <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Annual minimum rental income to be received in the next 5 years:</td><td> </td> <td colspan="2" id="xdx_490_20260630_zGBtr8thMs9g" style="text-align: right"> </td><td> </td></tr> <tr id="xdx_405_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedRemainderOfFiscalYear_iI_maLOLLPzMCQ_zAXzV3tTp75l" style="vertical-align: bottom; background-color: White"> <td style="width: 80%; text-align: left">2026</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">120,978</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedNextTwelveMonths_iI_maLOLLPzMCQ_zTPCfTIYxG63" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2027</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">241,956</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedTwoYears_iI_maLOLLPzMCQ_zSusQLh6xM4h" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2028</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">241,956</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedThreeYears_iI_maLOLLPzMCQ_z0WgUffWEyfh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2029</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">80,652</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedFourYears_iI_maLOLLPzMCQ_zFmzUMWQUFC8" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2030</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--LessorOperatingLeasePaymentsToBeReceived_iTI_mtLOLLPzMCQ_ziYiriSsInF2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Total</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">685,542</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> </table> Contract balances The Company records advances from customers when cash payments are received or due in advance of our performance. For the six months ended June 30, 2026 and 2025, the Company recognized revenue of approximately $456,000 and $2,169,000, respectively, that was included in the advances from customers balance at the beginning of each reporting period. Practical expedients and exemptions The Company generally expenses sales commissions if any incurred because the amortization period would have been one year or less. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. (u) Cost of Sales - advertising The cost of sales for advertising revenue mainly comprises of direct costs of generating advertising revenue including lease expense for the wall space, to where the ads display terminal to be installed, installation costs of ads display terminals, depreciation of display termination, labor, and other related expenses. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (v) Discontinued Operations The Company follows “ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” for reporting discontinued operations. Under the revised standard, a discontinued operation must represent a strategic shift that has or will have a major effect on an entity’s operations and financial results. Examples could include a disposal of a major line of business, a major geographical area, a major equity method investment, or other major parts of an entity. The revised standard also allows an entity to have certain continuing cash flows or involvement with the component after the disposal. Additionally, the standard requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. (w) Segment reporting Segment information is consistent with how the Chief Operating Decision Maker, i.e., the Directors of the Company, review the businesses, make investing and resource allocation decisions and assess operating performance. Transfers and sales between reportable segments, if any, are recorded at cost. The Company reports financial and operating information in the following three segments: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(1)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Cloud-based Technology (CBT) segment — It includes the Company’s cloud-based products, high-end data storage servers and related services sold to private sectors including new media, healthcare, education and residential community management, and among other industries and applications. In this segment, the Company generates revenues from the sales of hardware and software solutions with proprietary software and content as well as from designing and developing software products specifically customized for private sector customers’ needs for a fixed price. The Company includes the revenue and cost of revenue of high-end data storage servers in the CBT segment. Advertising services is included in the CBT segment, after the Company consummated the acquisition of TNM. Advertisements are delivered to the ads display terminals and vehicular ads display terminals through the Company’s cloud-based new media sharing platform. Incorporation of advertising services complements the Company’s out-of-home advertising business strategy.</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif">(2)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Traditional Information Technology (TIT) segment - The TIT segment includes the Company’s project-based technology products and services sold to the public sector. The solutions the Company has sold primarily include Geographic Information Systems (GIS), Digital Public Security Technology (DPST), and Digital Hospital Information Systems (DHIS). In this segment, the Company generates revenues from sales of hardware and system integration services. As a result of the business transformation, the TIT segment is gradually being phased out in 2021. Nevertheless, due to the difference business nature from the other segments, the Chief Operating Decision Maker considers it is a separate operating segment of which the performance is separately assessed and financial information for this segment is separately disclosed for financial reporting purpose.</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif">(3)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Smart Elevator (SE) segment - Following the acquisition of Skyladder Group Limited in November 2025, the Company added the Smart Elevator (SE) segment. As a provider of elevator services, the Company provides services throughout the entire elevator lifecycle, including sales, installation, repair, cloud-based maintenance, renovation, and upgrades. The segment serves a diverse user base, including governments, businesses, and households. In this segment, the Company generates revenues from elevator sales and installation contracts, as well as maintenance, repair, and other service agreements. The SE segment diversifies the Company’s cloud-based product offerings and expands the Company’s presence in the smart building and urban infrastructure market.</td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (x) Recent Accounting Pronouncements (i) Recently adopted accounting pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, (“ASU 2023-09”). The ASU enhances the transparency and decision usefulness of income tax disclosures by requiring additional disaggregation of information related to the effective tax rate reconciliation, income taxes paid, and income tax expense and pretax income by jurisdiction. The Company adopted ASU 2023 09 on a prospective basis effective January 1, 2025. Accordingly, the enhanced income tax disclosures are presented beginning in fiscal year 2025, and prior period disclosures have not been recast. The adoption of this guidance did not have an impact on the Company’s consolidated results of operations, financial position, or cash flows, as the amendments relate solely to disclosure requirements. In March 2024, the FASB issued ASU 2024-02, “Codification Improvements – Amendments to Remove References to the Concept Statements” (“ASU 2024-02”). ASU 2024-02 contains amendments to the FASB Accounting Standards Codification that remove references to various FASB Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior statements to provide guidance in certain topical areas. The Company adopted ASU 2024-02 for the annual period ending December 31, 2025. The adoption of this standard did not have a material impact to our results of operations, cash flows or financial condition. (ii) Recently issued accounting pronouncements not yet adopted In January 2025, the FASB issued ASU 2025-01, “Income Statement – Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date.” This pronouncement revises the effective date of ASU 2024-03 and clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Entities within the ASU’s scope are permitted to early adopt the accounting standard update. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact. In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as: employee compensation; depreciation; amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. The ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted. In January 2025, the FASB issued ASU 2025-01, which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact. Other accounting standards issued by FASB do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(a) Basis of Presentation and Principles of Consolidation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made that are necessary to present fairly the financial position, the results of its operations and cash flows. The consolidated financial statements include the accounts of the Company, and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Reverse Stock Split: A one-for-thirty reverse stock split of the Company’s issued and outstanding ordinary shares was effective on May 29, 2025 (the “Reverse Stock Split”). Except shares authorized, all share and per share information has been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated.

(b) Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company’s significant estimates include estimates used in business acquisition, goodwill assessment, going concern assessment and assessment of credit losses. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(c) Economic, Pandemic, Political, and Currency Exchange Risks All the Company’s revenue-generating operations are conducted in mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, public health, and legal environments in the PRC, and by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks that are not typically pertaining to the companies in North America and Western Europe. These include risks associated with, among others, the political, economic, public health concerns, and legal environments, geopolitical influences, and foreign currency exchange, notably in recent events, where the government’s sudden interventions or modifications of the laws and regulations currently in effective could negatively impact the Company’s operations and financial results. The functional currency of the Company is primarily Chinese Renminbi Yuan (“RMB”), which is not freely convertible into foreign currencies. The Company cannot guarantee that the current exchange rate will remain steady. Therefore, there is a possibility that the Company could post the same amount of profit for two comparable periods and yet, because of fluctuating exchange rates, record higher or lower profit depending on exchange rate of RMB. RMB converted to U.S. dollars on the relevant dates. The exchange rate could fluctuate depending on changes in the political and economic environment without notice.

(d) Cash and Cash Equivalents The Company considers all highly liquid investments purchased and cash deposits with financial institutions with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents other than bank and cash as of June 30, 2026 or December 31, 2025. The Company maintains its bank accounts at credit worthy financial institutions and closely monitors the movements of its cash positions. As of June 30, 2026, and December 31, 2025, approximately $1.0 million and $2.1 million of cash, respectively, was held in bank accounts in Hong Kong and mainland China.

1000000.0

2100000

(e) Restricted Cash Restricted cash represents the bank deposit frozen by the court as a result of legal proceedings. As of June 30, 2026 and December 31, 2025, the Company had restricted cash balance of $12,000 and nil, respectively.

12000

(f) Accounts Receivable, Accounts Receivable – related parties, and Concentration of Risk Accounts receivable are recognized and carried at carrying amount less an allowance for credit loss, if any. The Company maintains an allowance for credit losses resulting from the inability of its customers to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis according to historical trend, and estimates its provision for expected credit losses on receivables aging analysis. In addition, the Company estimates allowance for credit losses for the anticipation of future economic condition and credit risk indicators of customers. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. In the event the Company recovers amounts previously reserved for, the Company will reduce the specific allowance for credit losses. The balance of allowance for credit losses for the six month ended June 30, 2026 has increased by approximately $1.5 million from the year ended December 31, 2025. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Accounts receivable as of June 30, 2026 and December 31, 2025 are as follows: SCHEDULE OF ACCOUNTS RECEIVABLE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_493_20260630_zX5V6RSBhO71" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_492_20251231_zPCeTuR5KLZ8" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--AccountsReceivableGrossCurrent_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--NonrelatedPartyMember_maARNCzMzr_zSkO6l1YczGe" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: justify">Accounts Receivable</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">18,897,430</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">17,500,166</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--AllowanceForDoubtfulAccountsReceivableCurrent_iNI_di_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--NonrelatedPartyMember_msARNCzMzr_z3DUwJotm71h" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Allowance for credit losses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(10,067,840</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(8,518,902</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--AccountsReceivableNetCurrent_iTI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--NonrelatedPartyMember_mtARNCzMzr_zln8YW6WcDo8" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Accounts Receivable, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,829,590</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,981,264</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--AccountsReceivableGrossCurrent_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_maARRPCzpFP_zQfzuiBQ1ybg" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accounts Receivable - related parties</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">112</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">398,538</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--AllowanceForDoubtfulAccountsReceivableCurrent_iNI_di_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_msARNCzMzr_zjFClc4Czua8" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Allowance for credit losses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(112</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(139,796</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--AccountsReceivableNetCurrent_iTI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_mtARRPCzpFP_zYnGjzKlOYqj" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Accounts Receivable - related parties, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">258,742</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The normal credit term is ranging from 1 month to 3 months after the customers’ acceptance of data storage servers or software, and completion of advertising and other services, and ranging from 1 month to 6 months after the customers’ acceptance of ads display terminals. The normal credit term for elevator project, maintenance, repair and operations supply and services is ranging from 3 months to 6 months. However, because of various factors related to the business cycle, the actual collection of outstanding accounts receivable may be beyond the normal credit terms. The allowance for credit losses at June 30, 2026 and December 31, 2025, totaled approximately $10.1 million and $8.7 million, respectively, representing management’s best estimate. The following table describes the movements for allowance for credit losses during the six month period ended June 30, 2026 and the year ended December 31, 2025: SCHEDULE OF ALLOWANCE FOR CREDIT LOSSES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 80%; text-align: justify">Balance at January 1, 2025</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iS_c20250101__20251231_zXWEx87GNXt4" style="width: 16%; text-align: right" title="Allowance for credit losses, beginning">7,688,491</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Increase in allowance for credit losses</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--AllowanceForDoubtfulAccountsReceivablePeriodIncreaseDecrease_c20250101__20251231_zzJWvtgt5MWc" style="text-align: right" title="Increase in allowance for credit losses">4,931,702</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Amounts recovered during the year</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--AllowanceForDoubtfulAccountsReceivableRecoveries_iN_di_c20250101__20251231_zqMvQh45v2U1" style="text-align: right" title="Amounts recovered during the year">(19,167</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Decrease from dissolution of a subsidiary</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_ecustom--DecreaseFromDissolutionOfASubsidiary_c20250101__20251231_z4SkDgSI64ni" style="text-align: right" title="Decrease from dissolution of a subsidiary">(228,958</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Amounts written off as uncollectible</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--AllowanceForDoubtfulAccountsReceivableWriteOffs_iN_di_c20250101__20251231_zQmJHvXfcjk6" style="text-align: right" title="Amounts written off as uncollectible">(4,001,169</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1pt">Foreign exchange difference</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_986_ecustom--ForeignExchangeDifference_c20250101__20251231_z4dNBTUtcJd6" style="border-bottom: Black 1pt solid; text-align: right" title="Foreign exchange difference">287,799</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Balance at December 31, 2025</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iS_c20260101__20260630_zSGkH1pzGZUb" style="text-align: right" title="Allowance for credit losses, beginning">8,658,698</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Increase in allowance for credit losses</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--AllowanceForDoubtfulAccountsReceivablePeriodIncreaseDecrease_c20260101__20260630_zFIgyxZ4PwS8" style="text-align: right" title="Increase in allowance for credit losses">1,051,848</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Impairment losses reversed</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_ecustom--ImpairmentLossesReversed_c20260101__20260630_zZMDlIbKLbAh" style="text-align: right" title="Impairment losses reversed">(490,306</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Foreign exchange difference</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_ecustom--ForeignExchangeDifference_c20260101__20260630_zMOF6MCzRGI1" style="border-bottom: Black 1pt solid; text-align: right" title="Foreign exchange difference">847,712</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Balance at June 30, 2026 (Unaudited)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iE_c20260101__20260630_zLodaBypNj7g" style="border-bottom: Black 2.5pt double; text-align: right" title="Allowance for credit losses, ending">10,067,952</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1500000

Accounts receivable as of June 30, 2026 and December 31, 2025 are as follows: SCHEDULE OF ACCOUNTS RECEIVABLE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_493_20260630_zX5V6RSBhO71" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_492_20251231_zPCeTuR5KLZ8" style="border-bottom: Black 1pt solid; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--AccountsReceivableGrossCurrent_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--NonrelatedPartyMember_maARNCzMzr_zSkO6l1YczGe" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: justify">Accounts Receivable</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">18,897,430</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">17,500,166</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--AllowanceForDoubtfulAccountsReceivableCurrent_iNI_di_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--NonrelatedPartyMember_msARNCzMzr_z3DUwJotm71h" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Allowance for credit losses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(10,067,840</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(8,518,902</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--AccountsReceivableNetCurrent_iTI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--NonrelatedPartyMember_mtARNCzMzr_zln8YW6WcDo8" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Accounts Receivable, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,829,590</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,981,264</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--AccountsReceivableGrossCurrent_iI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_maARRPCzpFP_zQfzuiBQ1ybg" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accounts Receivable - related parties</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">112</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">398,538</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--AllowanceForDoubtfulAccountsReceivableCurrent_iNI_di_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_msARNCzMzr_zjFClc4Czua8" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Allowance for credit losses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(112</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(139,796</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--AccountsReceivableNetCurrent_iTI_hus-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--RelatedPartyMember_mtARRPCzpFP_zYnGjzKlOYqj" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Accounts Receivable - related parties, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">-</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">258,742</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

18897430

17500166

10067840

8518902

8829590

8981264

112

398538

112

139796

258742

10100000

8700000

SCHEDULE OF ALLOWANCE FOR CREDIT LOSSES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 80%; text-align: justify">Balance at January 1, 2025</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iS_c20250101__20251231_zXWEx87GNXt4" style="width: 16%; text-align: right" title="Allowance for credit losses, beginning">7,688,491</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Increase in allowance for credit losses</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--AllowanceForDoubtfulAccountsReceivablePeriodIncreaseDecrease_c20250101__20251231_zzJWvtgt5MWc" style="text-align: right" title="Increase in allowance for credit losses">4,931,702</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Amounts recovered during the year</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--AllowanceForDoubtfulAccountsReceivableRecoveries_iN_di_c20250101__20251231_zqMvQh45v2U1" style="text-align: right" title="Amounts recovered during the year">(19,167</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Decrease from dissolution of a subsidiary</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98B_ecustom--DecreaseFromDissolutionOfASubsidiary_c20250101__20251231_z4SkDgSI64ni" style="text-align: right" title="Decrease from dissolution of a subsidiary">(228,958</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Amounts written off as uncollectible</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--AllowanceForDoubtfulAccountsReceivableWriteOffs_iN_di_c20250101__20251231_zQmJHvXfcjk6" style="text-align: right" title="Amounts written off as uncollectible">(4,001,169</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1pt">Foreign exchange difference</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_986_ecustom--ForeignExchangeDifference_c20250101__20251231_z4dNBTUtcJd6" style="border-bottom: Black 1pt solid; text-align: right" title="Foreign exchange difference">287,799</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Balance at December 31, 2025</td><td> </td> <td style="text-align: left">$</td><td id="xdx_98E_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iS_c20260101__20260630_zSGkH1pzGZUb" style="text-align: right" title="Allowance for credit losses, beginning">8,658,698</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Increase in allowance for credit losses</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--AllowanceForDoubtfulAccountsReceivablePeriodIncreaseDecrease_c20260101__20260630_zFIgyxZ4PwS8" style="text-align: right" title="Increase in allowance for credit losses">1,051,848</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Impairment losses reversed</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_ecustom--ImpairmentLossesReversed_c20260101__20260630_zZMDlIbKLbAh" style="text-align: right" title="Impairment losses reversed">(490,306</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Foreign exchange difference</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_ecustom--ForeignExchangeDifference_c20260101__20260630_zMOF6MCzRGI1" style="border-bottom: Black 1pt solid; text-align: right" title="Foreign exchange difference">847,712</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Balance at June 30, 2026 (Unaudited)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_983_eus-gaap--AllowanceForDoubtfulAccountsReceivable_iE_c20260101__20260630_zLodaBypNj7g" style="border-bottom: Black 2.5pt double; text-align: right" title="Allowance for credit losses, ending">10,067,952</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

7688491

4931702

19167

-228958

4001169

287799

8658698

1051848

-490306 847712

10067952

(g) Advances to Suppliers, net Advances to suppliers include but are not limited to cash deposits for the purchase of inventory items and super-computing server machines from suppliers. For the six months ended June 30, 2026 and 2025, the increase in allowance for credit losses for advances to suppliers was approximately $<span id="xdx_90F_eus-gaap--AllowanceForDoubtfulAccountsReceivablePeriodIncreaseDecrease_c20260101__20260630__srt--TitleOfIndividualAxis__custom--SuppliersMember_zVKVY8X3iRh3" title="Increase in allowance for credit losses">94,000 and $<span id="xdx_908_eus-gaap--AllowanceForDoubtfulAccountsReceivablePeriodIncreaseDecrease_c20250101__20250630__srt--TitleOfIndividualAxis__custom--SuppliersMember_zaNeMVLRh8r6" title="Increase in allowance for credit losses">69,000, respectively.

94000

69000

(h) Contract Assets and Contract Liabilities Projects with performance obligations recognized over time that have revenue recognized to date in excess of cumulative billings are reported on our consolidated balance sheets as “contract assets”. Provisions for estimated losses of contract assets on uncompleted contracts are made in the period in which such losses are determined. As of June 30, 2026 and December 31, 2025, the Company had contract assets of $701,000 and $789,000, respectively. The amounts of contract assets are expected to be recovered within one year. During the periods ended June 30, 2026 and 2025, no provision was made to contract assets. Contract liabilities on uncompleted contracts represent the amounts of cash collected from clients, billings to clients on contracts in advance of work performed and revenue recognized. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. As of June 30, 2026 and December 31, 2025, the Company had contract liabilities of $1,299,000 and $nil, respectively.

701000

789000

1299000

(i) Advances from Customers and Related Parties Advances from customers and related parties represent cash received from customers and related parties as advance payments for the purchases of the Company’s products and services. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(j) Fair Value and Fair Value Measurement of Financial Instruments Management has estimated that carrying amounts reported in the consolidated balance sheets for cash, accounts receivable, accounts receivable – related parties, advances to suppliers, contract assets, other current assets, short-term bank loans, long-term bank loans, accounts payable, advances from customers, advances from customers - related parties, accrued payroll and benefits, other payables and accrued expenses, income taxes payable, and due to related parties approximate their fair market value based on the short-term maturity of these instruments.

(k) Fair Value Accounting Financial Accounting Standards Board (FASB) Accounting Standards Codifications (ASC) 820-10 “Fair Value Measurements and Disclosures”, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). As required by FASB ASC 820-10, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The three levels of the fair value hierarchy under FASB ASC 820-10 are described below: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.75in; text-align: justify">Level 1</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 2</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Level 3</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).</td></tr> </table>

(l) Inventories, net Inventories are valued at the lower of cost (weighted average basis) and net realizable value. Net realizable value is the expected selling price in the ordinary course of business minus any costs of completion, disposal, and transportation to make the sale. The Company performs an analysis of slow-moving or obsolete inventory periodically and any necessary valuation reserves, which could potentially be significant, are included in the period in which the evaluations are completed. Any inventory impairment results in a new cost basis for accounting purposes.

(m) Property, equipment and software Property, equipment and software are stated at cost less accumulated amortization and depreciation. Amortization and depreciation are provided over the assets’ estimated useful lives, using the straight-line method. Estimated useful lives of property, equipment and software are as follows: SCHEDULE OF PROPERTY , EQUIPMENT AND SOFTWARE ESTIMATED USEFUL LIVES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 49%; text-align: justify">Office buildings</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 49%; text-align: right"><span id="xdx_908_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__srt--OfficeBuildingMember__srt--RangeAxis__srt--MinimumMember_ze2rMYCPG0yk" title="Estimated useful life of property, plant and equipment">20-<span id="xdx_902_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__srt--OfficeBuildingMember__srt--RangeAxis__srt--MaximumMember_zJSJ8RQSjzij" title="Estimated useful life of property, plant and equipment">50 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Lease improvement</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_901_eus-gaap--PropertyPlantAndEquipmentUsefulLifeDescriptionOfTermExtensibleEnumeration_iI_dxL_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--LeaseholdImprovementsMember_zbjtz1u5yfsa" title="::XDX::http%3A%2F%2Ffasb.org%2Fus-gaap%2F2026%23UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember">Shorter of lease term or assets lives</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Electronic equipment, furniture and fixtures</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_909_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ElectronicEquipmentFurnitureAndFixturesMember__srt--RangeAxis__srt--MinimumMember_zM2XWfbBCKLf" title="Estimated useful life of property, plant and equipment">3-<span id="xdx_908_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ElectronicEquipmentFurnitureAndFixturesMember__srt--RangeAxis__srt--MaximumMember_zZOo8F3SaDX1" title="Estimated useful life of property, plant and equipment">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Motor vehicles</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90A_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MotorVehiclesMember_zSoIuSWMJoN1" title="Estimated useful life of property, plant and equipment">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Purchased software</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90F_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--PurchasedSoftwareMember__srt--RangeAxis__srt--MinimumMember_z4NprOzutceg" title="Estimated useful life of intangible assets">5-<span id="xdx_900_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--PurchasedSoftwareMember__srt--RangeAxis__srt--MaximumMember_zEwUKO3Ind7" title="Estimated useful life of intangible assets">10 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Media display equipment</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90A_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MediaDisplayEquipmentMember_zTfe0kCGh7Ka" title="Estimated useful life of property, plant and equipment">5 years</td></tr> </table> Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss are included in the Company’s results of operations. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SCHEDULE OF PROPERTY , EQUIPMENT AND SOFTWARE ESTIMATED USEFUL LIVES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; width: 49%; text-align: justify">Office buildings</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 49%; text-align: right"><span id="xdx_908_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__srt--OfficeBuildingMember__srt--RangeAxis__srt--MinimumMember_ze2rMYCPG0yk" title="Estimated useful life of property, plant and equipment">20-<span id="xdx_902_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__srt--OfficeBuildingMember__srt--RangeAxis__srt--MaximumMember_zJSJ8RQSjzij" title="Estimated useful life of property, plant and equipment">50 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Lease improvement</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_901_eus-gaap--PropertyPlantAndEquipmentUsefulLifeDescriptionOfTermExtensibleEnumeration_iI_dxL_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__us-gaap--LeaseholdImprovementsMember_zbjtz1u5yfsa" title="::XDX::http%3A%2F%2Ffasb.org%2Fus-gaap%2F2026%23UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember">Shorter of lease term or assets lives</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Electronic equipment, furniture and fixtures</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_909_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ElectronicEquipmentFurnitureAndFixturesMember__srt--RangeAxis__srt--MinimumMember_zM2XWfbBCKLf" title="Estimated useful life of property, plant and equipment">3-<span id="xdx_908_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ElectronicEquipmentFurnitureAndFixturesMember__srt--RangeAxis__srt--MaximumMember_zZOo8F3SaDX1" title="Estimated useful life of property, plant and equipment">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Motor vehicles</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90A_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MotorVehiclesMember_zSoIuSWMJoN1" title="Estimated useful life of property, plant and equipment">5 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Purchased software</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90F_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--PurchasedSoftwareMember__srt--RangeAxis__srt--MinimumMember_z4NprOzutceg" title="Estimated useful life of intangible assets">5-<span id="xdx_900_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--PurchasedSoftwareMember__srt--RangeAxis__srt--MaximumMember_zEwUKO3Ind7" title="Estimated useful life of intangible assets">10 years</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: White"> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Media display equipment</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right"><span id="xdx_90A_eus-gaap--PropertyPlantAndEquipmentUsefulLife_iI_dtY_c20260630__us-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MediaDisplayEquipmentMember_zTfe0kCGh7Ka" title="Estimated useful life of property, plant and equipment">5 years</td></tr> </table>

P20Y

P50Y

P3Y

P5Y

P10Y

P5Y

(n) Business combination In accordance with ASC 805, the Company applies acquisition method to account for business combination. The acquisition method requires that the fair value of the underlying exchange transaction is used to establish a new accounting basis of the acquired entity upon the acquirer taking control over the acquiree. Furthermore, because of obtaining control the acquirer is responsible and accountable for all of the acquiree’s assets, liabilities and operations, the acquirer recognizes and measures the assets acquired and liabilities assumed at their full fair values as of the date control is obtained, which may result in goodwill, when purchase consideration exceeds the net of fair value of the assets acquired and liabilities assumed, or a bargain purchase gain, when the net of fair value of the assets acquired and liabilities assumed exceeds the purchase consideration, regardless of the percentage ownership in the acquiree or how the acquisition was achieved. The Company evaluates goodwill for impairment on an annual basis or more frequently if indicators of impairment exist that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company conducts a quantitative goodwill impairment test, which involves comparing the estimated fair value of the reporting unit with its carrying value, including goodwill. The Company estimates the fair value of a reporting unit using the income approach. If the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss is recorded for the difference.

(o) Disposal of subsidiary The Company deconsolidates a subsidiary upon the loss of control, the related subsidiary’s assets (including goodwill), liabilities, non-controlling interest and other components of equity are de-recognized. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss. Any consideration received is recognized at fair value. Any resultant gain or loss is recognized in the Statement of Operations.

(p) Long-term investment The Company’s long-term investment consists of investments accounted for under the equity method and equity investments without readily determinable fair value. Pursuant to ASC 321, equity investments, except for those accounted for under the equity method, those that result in consolidation of the investee and certain other investments, are measured at fair value, and any changes in fair value are recognized in earnings. For equity securities without readily determinable fair value and do not qualify for the existing practical expedient in ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) to estimate fair value using the net asset value per share (or its equivalent) of the investment, the Company elected to measure those investments at cost, less any impairment (if applicable plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer). For equity investments that the Company elects to measure at cost, less any impairment, the Company makes a qualitative assessment considering impairment indicators to evaluate whether investments are impaired at each reporting date. Impairment indicators considered include, but are not limited to, a significant deterioration in the earnings performance or business prospects of the investee, including factors that raise significant concerns about the investee’s ability to continue as a going concern, a significant adverse change in the regulatory, economic, or technologic environment of the investee and a significant adverse change in the general market condition of either the geographical area or the industry in which the investee operates. If a qualitative assessment indicates that the investment is impaired, the entity has to estimate the investment’s fair value in accordance with the principles of ASC 820. For equity investments without readily determinable fair value, the Company uses Level 3 inputs of fair value accounting in accordance with ASC 820-10 and recognizes impairment loss other than temporary in the statement of operations equal to the difference between its initial investment and its proportional share of the net book value of the investee’s net assets which approximates its fair value. For impairment on equity investments without readily determinable fair value, the Company uses Level 3 inputs of fair value accounting in accordance with ASC 820-10 and recognizes impairment loss in the statement of operations equal to the difference between its initial investment and its proportional share of the net book value of investee’s net assets which approximates its fair value if those are determined to be other than temporary. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(q) Convertible promissory note The Company determines the appropriate accounting treatment of its convertible debts in accordance with the terms in relation to conversion features. After considering the impact of such features, the Company may account for such instrument as a liability in its entirety, or separate the instrument into debt and liability and equity components following the guidance described under ASC 815 Derivatives and Hedging and ASC 470 Debt. The debt discount, if any, together with related issuance cost are subsequently amortized as interest expense over the period from the issuance date to the earliest conversion date or stated redemption date. The Company presented the issuance cost of debt in the balance sheet as a direct deduction from the related debt.

(r) Impairment of Long-Lived Assets Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Recoverability of assets to be held and used is determined by comparing their carrying amount with their expected future net undiscounted future cash flows from the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by how much the carrying amount exceeds the fair value of the assets. There were no impairment charges for the six months ended June 30, 2026 and 2025. Assets held for disposal, if any, are reported at the lower of the carrying amount or fair value less costs to sell.

(s) Operating leases - Right-of-use assets and lease liabilities The Company accounts for lease under ASC 842 “Leases”, and also elects practical expedient not to separate non-lease component from lease components in accordance with ASC 842-10-15-37 and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. The Company also elects the practical expedient not to recognize lease assets and lease liabilities for leases with a term of 12 months or less. The Company recognized a lease liability and corresponding right-of-use asset based on the present value of minimum lease payments discounted at the Company’s incremental borrowing rate. The Company records amortization and interest expense on a straight-line basis based on lease terms and reduces lease liabilities upon making lease payments.

(t) Revenue Recognition In accordance with the ASC 606, the Company recognizes revenues net of applicable taxes, when goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to receive in exchange for those goods or services. The Company generates its revenues primarily from six sources: (1) product sales, (2) software sales, (3) advertising, (4) elevator project, and (5) elevator Maintenance, Repair and Operations (“MRO”) and (6) elevator services. Revenue is recognized when obligations under the terms of a contract with our customers are satisfied, generally, upon delivery of the goods and services. Revenue - Products Product revenues are generated primarily from the sale of Cloud-Application-Terminal based digital ads display terminals with integrated software essential to the functionality of the hardware to our customers (inclusive of related parties), high-end data storage servers, super-computing servers and graphic cards. Although manufacturing of the products has been outsourced to the Company’s Original Equipment Manufacturer (OEM) suppliers or directly sourced from the suppliers, the Company has acted as the principal of the contract. The Company recognized the product sales at the point of delivery. Product sales are classified as “Revenue-Products” on the Company’s consolidated statements of operations. Revenue - Software Revenue – software represents software upgrade and maintenance services provided for customers by the Company. The Company recognized the software revenue for software upgrade and maintenance service on a straight-line basis over the contracted service period. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Revenue - Advertising The Company generates revenues primarily from providing advertising slots to customers to promote their businesses by broadcasting advertisements on identifiable digital ads display terminals and vehicular ads display terminals in different geographic regions and locations through a cloud-based new media sharing platform. The Company also contracts individuals to promote special events or for various occasions. The Company is only obligated to broadcast the advertisements to the contracted digital ads display terminals, and therefore allocates 100% of the transaction price to advertisement broadcasting. The transaction price for advertisement broadcasting is fixed based on the numbers of advertisement delivery and duration of the contract, and has no variable consideration, or significant financing component, or subsequent price change, and is not refundable. The Company recognizes the revenues, net of applicable taxes, from advertisement broadcasting contracts with customers over the contracted advertising duration. The Company also generates its advertising revenue through facilitating internet promotion advertising service and recognizes the revenue over the contracted advertising duration. The Company provides advertising services to customers for promotion of their brands and products through internet. For the network promotion advertising contracts, the Company generally recognizes revenue over time, because the customer simultaneously receives and consumes the benefits as the Company performs throughout a fixed contract term. Revenue - Project Project represents two types of revenue, i.e. sales of elevators and elevator installation services. Product revenues are generated from the sale of elevators. The transfer of control is initiated when ordered equipment is delivered to a customer site as then the customer has the ability to direct the use of and obtain substantially all the remaining benefits from. The Company has acted as the principal of the contract. The Company recognized the product sales at the point of delivery. Installation services provide mobility solutions with elevators for all applications and needs. The control is transferred continuously to the customer from the start of the installation of the unit, as the work performed enhances an asset controlled by the customer. Revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress. Incurred costs represent work performed, which corresponds with and best depicts transfer of control or the enhancement of the customer’s assets. Contract costs included in the calculation are comprised of materials, subcontractors’ costs or other direct costs. In developing the total cost estimates, the Company utilizes a combination of its historical cost experience and expected costs considering current circumstances. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Revenue - MRO MRO represents two types of revenue, i.e. revenues from elevator maintenance services and repairs services. Maintenance services are rendered by the Company for the installations carried out by us and other service providers. Control is transferred to the customer over the contract period based on the time elapsed. Maintenance revenue is recognized over the contract period as the service is provided, according to the agreed contractual terms and conditions. Wide range of repair services are rendered by the Company to the installations carried out by us and other service providers. For repairs, the customer benefits from the service once the repair is completed, revenue is therefore recognized at the point of service completion. Revenue - Service Elevator service represents two types of revenue, i.e. revenues from platform service and consultation services. The Company owns a software which serves a platform providing elevator operational data to the customers through intelligent sensors installed in the elevators and connected to the platform. The customers purchase platform service will be granted periodic access rights to access the platform for the review of operational data of elevators. Given the continuous nature of this service, the Company recognizes revenue from platform service on a straight-line basis which aligns with the cost and benefit profile of this service. Platform revenue is recognized over the contract period as the service is provided. Consultation services include the provision of solutions on technical issues relating to elevators. The revenue is recognized when the service is completed and accepted by the customer. Revenue - Other The Company also reports other revenue, which comprises: (i) revenue from system upgrade and technical support services; (ii) platform service fee; and (iii) rental income. System upgrade and technical support revenue is recognized when performance obligations are satisfied upon completion of the services. Platform service fee is charged based on number of the display terminals used by the customers or a percentage of advertising revenue generated by the display terminals. Platform service revenue is recognized on a monthly basis over the contract period. The Company follows ASC 842 – Leases that requires lessor to identify the underlying assets and allocate rental income among considerations in lease and non-lease components. The Company owns two units of office space. The first unit is leased to a third party with an initial lease term of two years commencing on May 1, 2024 and expiring on April 30, 2026. It was subsequently renewed for an additional three years with the maturity date extended to April 30, 2029. The second unit was leased to another third party with lease term of three years starting from January 1, 2024 to December 31, 2026, but was early terminated on June 30, 2025. The lease agreements have fixed monthly rental payments, and no non-lease component or option for lessees to purchase the underlying assets. The Company collects monthly rental payments from the lessees, and has generated approximately $121,000 and $126,000 rental income for the periods ended June 30, 2026, and 2025, respectively. SCHEDULE OF ANNUAL MINIMUM RENTAL INCOME RECEIVED <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Annual minimum rental income to be received in the next 5 years:</td><td> </td> <td colspan="2" id="xdx_490_20260630_zGBtr8thMs9g" style="text-align: right"> </td><td> </td></tr> <tr id="xdx_405_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedRemainderOfFiscalYear_iI_maLOLLPzMCQ_zAXzV3tTp75l" style="vertical-align: bottom; background-color: White"> <td style="width: 80%; text-align: left">2026</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">120,978</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedNextTwelveMonths_iI_maLOLLPzMCQ_zTPCfTIYxG63" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2027</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">241,956</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedTwoYears_iI_maLOLLPzMCQ_zSusQLh6xM4h" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2028</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">241,956</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedThreeYears_iI_maLOLLPzMCQ_z0WgUffWEyfh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2029</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">80,652</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedFourYears_iI_maLOLLPzMCQ_zFmzUMWQUFC8" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2030</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--LessorOperatingLeasePaymentsToBeReceived_iTI_mtLOLLPzMCQ_ziYiriSsInF2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Total</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">685,542</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> </table> Contract balances The Company records advances from customers when cash payments are received or due in advance of our performance. For the six months ended June 30, 2026 and 2025, the Company recognized revenue of approximately $456,000 and $2,169,000, respectively, that was included in the advances from customers balance at the beginning of each reporting period. Practical expedients and exemptions The Company generally expenses sales commissions if any incurred because the amortization period would have been one year or less. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

121000

126000

SCHEDULE OF ANNUAL MINIMUM RENTAL INCOME RECEIVED <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Annual minimum rental income to be received in the next 5 years:</td><td> </td> <td colspan="2" id="xdx_490_20260630_zGBtr8thMs9g" style="text-align: right"> </td><td> </td></tr> <tr id="xdx_405_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedRemainderOfFiscalYear_iI_maLOLLPzMCQ_zAXzV3tTp75l" style="vertical-align: bottom; background-color: White"> <td style="width: 80%; text-align: left">2026</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">120,978</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedNextTwelveMonths_iI_maLOLLPzMCQ_zTPCfTIYxG63" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2027</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">241,956</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedTwoYears_iI_maLOLLPzMCQ_zSusQLh6xM4h" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2028</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">241,956</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedThreeYears_iI_maLOLLPzMCQ_z0WgUffWEyfh" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2029</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">80,652</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--LessorOperatingLeasePaymentsToBeReceivedFourYears_iI_maLOLLPzMCQ_zFmzUMWQUFC8" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2030</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--LessorOperatingLeasePaymentsToBeReceived_iTI_mtLOLLPzMCQ_ziYiriSsInF2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Total</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">685,542</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> </table>

120978

241956

80652

685542

456000

2169000

(u) Cost of Sales - advertising The cost of sales for advertising revenue mainly comprises of direct costs of generating advertising revenue including lease expense for the wall space, to where the ads display terminal to be installed, installation costs of ads display terminals, depreciation of display termination, labor, and other related expenses. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(v) Discontinued Operations The Company follows “ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” for reporting discontinued operations. Under the revised standard, a discontinued operation must represent a strategic shift that has or will have a major effect on an entity’s operations and financial results. Examples could include a disposal of a major line of business, a major geographical area, a major equity method investment, or other major parts of an entity. The revised standard also allows an entity to have certain continuing cash flows or involvement with the component after the disposal. Additionally, the standard requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations.

(w) Segment reporting Segment information is consistent with how the Chief Operating Decision Maker, i.e., the Directors of the Company, review the businesses, make investing and resource allocation decisions and assess operating performance. Transfers and sales between reportable segments, if any, are recorded at cost. The Company reports financial and operating information in the following three segments: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(1)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Cloud-based Technology (CBT) segment — It includes the Company’s cloud-based products, high-end data storage servers and related services sold to private sectors including new media, healthcare, education and residential community management, and among other industries and applications. In this segment, the Company generates revenues from the sales of hardware and software solutions with proprietary software and content as well as from designing and developing software products specifically customized for private sector customers’ needs for a fixed price. The Company includes the revenue and cost of revenue of high-end data storage servers in the CBT segment. Advertising services is included in the CBT segment, after the Company consummated the acquisition of TNM. Advertisements are delivered to the ads display terminals and vehicular ads display terminals through the Company’s cloud-based new media sharing platform. Incorporation of advertising services complements the Company’s out-of-home advertising business strategy.</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif">(2)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Traditional Information Technology (TIT) segment - The TIT segment includes the Company’s project-based technology products and services sold to the public sector. The solutions the Company has sold primarily include Geographic Information Systems (GIS), Digital Public Security Technology (DPST), and Digital Hospital Information Systems (DHIS). In this segment, the Company generates revenues from sales of hardware and system integration services. As a result of the business transformation, the TIT segment is gradually being phased out in 2021. Nevertheless, due to the difference business nature from the other segments, the Chief Operating Decision Maker considers it is a separate operating segment of which the performance is separately assessed and financial information for this segment is separately disclosed for financial reporting purpose.</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif">(3)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Smart Elevator (SE) segment - Following the acquisition of Skyladder Group Limited in November 2025, the Company added the Smart Elevator (SE) segment. As a provider of elevator services, the Company provides services throughout the entire elevator lifecycle, including sales, installation, repair, cloud-based maintenance, renovation, and upgrades. The segment serves a diverse user base, including governments, businesses, and households. In this segment, the Company generates revenues from elevator sales and installation contracts, as well as maintenance, repair, and other service agreements. The SE segment diversifies the Company’s cloud-based product offerings and expands the Company’s presence in the smart building and urban infrastructure market.</td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(x) Recent Accounting Pronouncements (i) Recently adopted accounting pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, (“ASU 2023-09”). The ASU enhances the transparency and decision usefulness of income tax disclosures by requiring additional disaggregation of information related to the effective tax rate reconciliation, income taxes paid, and income tax expense and pretax income by jurisdiction. The Company adopted ASU 2023 09 on a prospective basis effective January 1, 2025. Accordingly, the enhanced income tax disclosures are presented beginning in fiscal year 2025, and prior period disclosures have not been recast. The adoption of this guidance did not have an impact on the Company’s consolidated results of operations, financial position, or cash flows, as the amendments relate solely to disclosure requirements. In March 2024, the FASB issued ASU 2024-02, “Codification Improvements – Amendments to Remove References to the Concept Statements” (“ASU 2024-02”). ASU 2024-02 contains amendments to the FASB Accounting Standards Codification that remove references to various FASB Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior statements to provide guidance in certain topical areas. The Company adopted ASU 2024-02 for the annual period ending December 31, 2025. The adoption of this standard did not have a material impact to our results of operations, cash flows or financial condition. (ii) Recently issued accounting pronouncements not yet adopted In January 2025, the FASB issued ASU 2025-01, “Income Statement – Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date.” This pronouncement revises the effective date of ASU 2024-03 and clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Entities within the ASU’s scope are permitted to early adopt the accounting standard update. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact. In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as: employee compensation; depreciation; amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. The ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted. In January 2025, the FASB issued ASU 2025-01, which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact. Other accounting standards issued by FASB do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

3. BUSINESS ACQUISITION On September 29, 2025, the Company and Taoping Holdings Limited (“THL”), a wholly owned subsidiary of the Company, entered into a share purchase agreement with Skyladder Holding Limited to acquire <span id="xdx_907_eus-gaap--BusinessAcquisitionPercentageOfVotingInterestsAcquired_iI_dp_uPure_c20250929__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember__us-gaap--TypeOfArrangementAxis__custom--SharePurchaseAgreementMember_zViZqkHASzyc" title="Equity interest acquired, percentage">100% equity interest in Skyladder Group Limited (“SGL”) (the “Acquisition”). SGL is a provider of elevator services throughout the entire elevator lifecycle, including sales, installation, repair, maintenance, renovation, and upgrades. The Acquisition was consummated on November 26, 2025, and as a result, SGL became a wholly owned subsidiary of THL. Pursuant to the share purchase agreement, as amended (the “Purchase Agreement”), the total maximum consideration for the Acquisition on the Purchase Agreement date is RMB <span id="xdx_906_eus-gaap--BusinessCombinationConsiderationTransferred1_pn6n6_uRMB_c20250929__20250929__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember_zJBT3xexzE6a" title="Purchase consideration">152 million (approximately US$<span id="xdx_900_eus-gaap--BusinessCombinationConsiderationTransferred1_pn4n6_c20250929__20250929__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember_zoYUwRGJIaSi" title="Purchase consideration">21.36 million), payable in <span id="xdx_905_eus-gaap--BusinessAcquisitionEquityInterestsIssuedOrIssuableNumberOfSharesIssued_c20250929__20250929__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember_z0oG2W2FwAE9" title="Consideration shares">7,882,921 ordinary shares of the Company, with no par value per share (the “Consideration Shares”). The Consideration Shares were issued in a single batch after all closing conditions were satisfied or waived and the equity transfer of SGL had been completed in Hong Kong. All of the Consideration Shares are subject to forfeiture in the event that SGL fails to meet specified revenue and net profit (after tax) targets (the “Performance Targets”) for various time periods as set forth in the Purchase Agreement. The fair value of the Consideration Shares as of the acquisition date, determined based on the probability-weighted assessment of achieving the Performance Targets, is reflected in the purchase price allocation set out below. The Company completed the valuations necessary to assess the fair values of the tangible and intangible assets acquired and liabilities assumed, resulting from which the amount of goodwill was determined and recognized as of the acquisition closing date. The following table summarizes the estimated aggregate fair values of the assets acquired, and liabilities assumed as of the completion closing date: The total maximum consideration under the Purchase Agreement is RMB <span id="xdx_905_eus-gaap--BusinessCombinationConsiderationTransferred1_pn6n6_uRMB_c20250929__20250929__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember_zACflERDkDbd">152 million (approximately US$<span id="xdx_900_eus-gaap--BusinessCombinationConsiderationTransferred1_pn4n6_c20250929__20250929__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember_zcUUDo73Ifk5">21.36 million), representing the aggregate value of all <span id="xdx_909_eus-gaap--BusinessAcquisitionEquityInterestsIssuedOrIssuableNumberOfSharesIssued_c20250929__20250929__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember__us-gaap--TypeOfArrangementAxis__custom--PurchaseAgreementMember_z6Rb87ZNs05i">7,882,921 Consideration Shares if all Performance Targets are achieved and no forfeiture occurs. All of the Consideration Shares are subject to forfeiture contingent upon the achievement of the Performance Targets; accordingly, the fair value of the Consideration Shares recognized in the purchase price allocation reflects the probability-weighted fair value of the Consideration Shares expected to be unlocked as of the acquisition date. The fair value of consideration of $7,252,286 reflected herein represents management’s best estimate as of the acquisition closing date, based on the closing market price of TAOP’s ordinary shares on that date and the best estimated probability of achieving the Performance Targets. <p id="xdx_892_eus-gaap--ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock_hus-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zZoBrey1xOA7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; padding: 0pt; text-align: justify"> SCHEDULE OF BUSINESS ACQUISITION ASSETS ACQUIRED, AND LIABILITIES ASSUMED <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="display: none; vertical-align: bottom; background-color: White"> <td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_499_20251126__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zlMEwQKvfBB6" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 80%; padding-bottom: 2.5pt">Fair value of consideration on November 26, 2025 (closing date)</td><td style="width: 2%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--BusinessCombinationConsiderationTransferred1_c20251126__20251126__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zpfbWzJqBdG5" style="border-bottom: Black 2.5pt double; width: 16%; text-align: right" title="Total purchase price">7,252,286</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Assets acquired (liabilities assumed):</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents_iI_maBCRIAzw9M_ziUNC9I6esf3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Cash and cash equivalents</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">24,826</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables_iI_maBCRIAzw9M_zCUrZJSXIIRa" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accounts receivable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,643,799</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedContractAssets_iI_maBCRIAzw9M_zGS0zWTioM33" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Contract assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">257,894</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedAdvancesToSuppliers_iI_maBCRIAzw9M_z5jM0PvYZek1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Advances to suppliers</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">687,945</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedInventory_iI_maBCRIAzw9M_zdemDVLdbYt5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Inventories</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">487,455</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsOther_iI_maBCRIAzw9M_zJxSzQYX78sd" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other current assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">284,779</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedAmountsDueFromRelatedParties_iI_maBCRIAzw9M_zaLsBv35gzh4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Amounts due from related parties</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">116,752</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment_iI_maBCRIAzw9M_zuF5CQAswZSf" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Property, plant and equipment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">52,436</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedRightOfUseAssets_iI_maBCRIAzw9M_zTMw88v0tWU3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Right of use assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">88,416</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesShortTermBankLoans_iNI_di_msBCRIAzw9M_zJ80EFRvKXc" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Short-term bank loans</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,241,930</td><td style="text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable_iNI_di_msBCRIAzw9M_zFoyiSAwZ3Ah" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accounts payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,855,540</td><td style="text-align: left">)</td></tr> <tr id="xdx_40D_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAdvancesFromCustomer_iNI_di_msBCRIAzw9M_zDArwwjQtGxj" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Advances from customers</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,068,002</td><td style="text-align: left">)</td></tr> <tr id="xdx_40F_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccruedPayrollAndBenefits_iNI_di_msBCRIAzw9M_zxkaDDYMQT1c" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accrued payroll and benefit</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(97,627</td><td style="text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesOther_iNI_di_msBCRIAzw9M_zzZRjw5cmZE8" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other payables and accrued expenses</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(273,158</td><td style="text-align: left">)</td></tr> <tr id="xdx_406_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIncomeTaxPayable_iNI_di_msBCRIAzw9M_zjErWETpL9k2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Income tax payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(28,987</td><td style="text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCapitalLeaseObligation_iNI_di_msBCRIAzw9M_zWfRL3MlBbcd" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Lease liabilities</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(104,146</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedAssets_iNTI_di_mtBCRIAzw9M_zG1UrFMuZ57l" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total net liabilities acquired</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(25,088</td><td style="text-align: left">)</td></tr> <tr id="xdx_403_eus-gaap--Goodwill_iI_zAwuWUPAmDd2" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Goodwill</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,277,374</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total fair value of Consideration</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_981_eus-gaap--BusinessCombinationConsiderationTransferred1_c20251126__20251126__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zj8Gh6TPeLe1" style="border-bottom: Black 2.5pt double; text-align: right" title="Total purchase price">7,252,286</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The transaction resulted in allocation of $7,277,374 to goodwill, representing the financial, strategic and operational value of the transaction to the Company. Goodwill is attributed to the premium that the Company paid to obtain the value of the business of SGL and the synergies expected from the combined operations of SGL and the Company, the assembled workforce and their knowledge and experience in provision of elevator services. The total amount of the goodwill acquired is not deductible for tax purposes. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS The Company’s consolidated statement of operations for the year ended December 31, 2025 included revenue of $2.7 million and net profit of $0.3 million attributable to SGL since November 26, 2025, the acquisition closing date, to the end of December 31, 2025. Goodwill is evaluated for impairment on an annual basis, or more frequently if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company performed an assessment of potential triggering events as of June 30, 2026, and concluded that no events or circumstances had occurred that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Accordingly, no interim goodwill impairment test was required, and no impairment charge was recognized for the six months ended June 30, 2026.

152000000

21360000

7882921

152000000

21360000

7882921

7252286

<p id="xdx_892_eus-gaap--ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock_hus-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zZoBrey1xOA7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; padding: 0pt; text-align: justify"> SCHEDULE OF BUSINESS ACQUISITION ASSETS ACQUIRED, AND LIABILITIES ASSUMED <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="display: none; vertical-align: bottom; background-color: White"> <td style="display: none; text-align: left"> </td><td style="display: none"> </td> <td style="display: none; text-align: left"> </td><td id="xdx_499_20251126__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zlMEwQKvfBB6" style="display: none; text-align: right"> </td><td style="display: none; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 80%; padding-bottom: 2.5pt">Fair value of consideration on November 26, 2025 (closing date)</td><td style="width: 2%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">$</td><td id="xdx_980_eus-gaap--BusinessCombinationConsiderationTransferred1_c20251126__20251126__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zpfbWzJqBdG5" style="border-bottom: Black 2.5pt double; width: 16%; text-align: right" title="Total purchase price">7,252,286</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Assets acquired (liabilities assumed):</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents_iI_maBCRIAzw9M_ziUNC9I6esf3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Cash and cash equivalents</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">24,826</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables_iI_maBCRIAzw9M_zCUrZJSXIIRa" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accounts receivable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,643,799</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedContractAssets_iI_maBCRIAzw9M_zGS0zWTioM33" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Contract assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">257,894</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedAdvancesToSuppliers_iI_maBCRIAzw9M_z5jM0PvYZek1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Advances to suppliers</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">687,945</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedInventory_iI_maBCRIAzw9M_zdemDVLdbYt5" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Inventories</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">487,455</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsOther_iI_maBCRIAzw9M_zJxSzQYX78sd" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other current assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">284,779</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedAmountsDueFromRelatedParties_iI_maBCRIAzw9M_zaLsBv35gzh4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Amounts due from related parties</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">116,752</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment_iI_maBCRIAzw9M_zuF5CQAswZSf" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Property, plant and equipment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">52,436</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedRightOfUseAssets_iI_maBCRIAzw9M_zTMw88v0tWU3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Right of use assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">88,416</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesShortTermBankLoans_iNI_di_msBCRIAzw9M_zJ80EFRvKXc" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Short-term bank loans</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,241,930</td><td style="text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccountsPayable_iNI_di_msBCRIAzw9M_zFoyiSAwZ3Ah" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accounts payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,855,540</td><td style="text-align: left">)</td></tr> <tr id="xdx_40D_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAdvancesFromCustomer_iNI_di_msBCRIAzw9M_zDArwwjQtGxj" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Advances from customers</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,068,002</td><td style="text-align: left">)</td></tr> <tr id="xdx_40F_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesAccruedPayrollAndBenefits_iNI_di_msBCRIAzw9M_zxkaDDYMQT1c" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accrued payroll and benefit</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(97,627</td><td style="text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilitiesOther_iNI_di_msBCRIAzw9M_zzZRjw5cmZE8" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other payables and accrued expenses</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(273,158</td><td style="text-align: left">)</td></tr> <tr id="xdx_406_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIncomeTaxPayable_iNI_di_msBCRIAzw9M_zjErWETpL9k2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Income tax payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(28,987</td><td style="text-align: left">)</td></tr> <tr id="xdx_408_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCapitalLeaseObligation_iNI_di_msBCRIAzw9M_zWfRL3MlBbcd" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Lease liabilities</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(104,146</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedAssets_iNTI_di_mtBCRIAzw9M_zG1UrFMuZ57l" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total net liabilities acquired</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(25,088</td><td style="text-align: left">)</td></tr> <tr id="xdx_403_eus-gaap--Goodwill_iI_zAwuWUPAmDd2" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Goodwill</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,277,374</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total fair value of Consideration</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_981_eus-gaap--BusinessCombinationConsiderationTransferred1_c20251126__20251126__us-gaap--BusinessAcquisitionAxis__custom--SkyladderGroupLimitedMember_zj8Gh6TPeLe1" style="border-bottom: Black 2.5pt double; text-align: right" title="Total purchase price">7,252,286</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

7252286

24826

3643799

257894 687945

487455

284779

116752

52436

88416 1241930

2855540

1068002 97627

273158

28987

104146

25088

7277374

7252286

7277374

2700000

300000

4. DISPOSALS OF CONSOLIDATED ENTITIES TDTJS was dissolved on January 15, 2025. The dissolution resulted in a recorded loss of $68,545 for the year ended December 31, 2025. TEPH and TPGXT were dissolved on April 29, 2025 and June 11, 2025, respectively. The dissolution of these companies results in minimal gain or loss for the year ended December 31, 2025. The Company disposed of <span id="xdx_909_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_pid_dp_uPure_c20260313__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--BannaTaopingAgriculturalTechCoLtdMember_zh8wC5zyt7uh" title="Equity interest">60% equity interests of BTAT to an unrelated third party for consideration of RMB 360,000 on March 13, 2026. The disposal of BTAT was not qualified as discontinued operations as it does not represent a strategic shift that has had a major impact on the Company’s operations or financial results. The dissolution of TDTJS, TEPH and TPGXT were not qualified as discontinued operations as they do not individually or in the aggregate represent a strategic shift that has had a major impact on the Company’s operations or financial results.

68545

0.60

360000

5. LOSS PER SHARE Basic loss per share is computed by dividing loss available to common shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur, if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares, or resulted in the issuance of ordinary shares that shared in the earnings of the entity. Components of basic and diluted earnings per share were as follows for the six months ended June 30, 2026 and 2025: SCHEDULE OF COMPONENTS OF BASIC AND DILUTED EARNINGS PER SHARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_497_20260101__20260630_zJ1EJSqI41L4" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2026*</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_496_20250101__20250630_zs0qLxd55H95" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2025*</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Numerator:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--NetIncomeLoss_zg70WcTxMiwg" style="vertical-align: bottom; background-color: White"> <td style="width: 60%; text-align: left; padding-bottom: 2.5pt">Net (loss)</td><td style="width: 2%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; width: 16%; text-align: right">(2,494,622</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left">)</td><td style="width: 2%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; width: 16%; text-align: right">(4,679,549</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Denominator:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_zo6XJIJEhlDa" style="vertical-align: bottom; background-color: White"> <td>Weighted average outstanding ordinary shares-Basic*</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,532,138</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">715,992</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--IncrementalCommonSharesAttributableToConversionOfDebtSecurities_zqimYSY9A4Lk" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">-dilutive effect of convertible note</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_zKZnYPDFW51" style="vertical-align: bottom; background-color: White"> <td>Weighted average outstanding ordinary shares- Diluted*</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,532,138</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">715,992</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--EarningsPerShareReconciliationAbstract_iB_zJa79WsceTHb" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Earnings (loss) per share*</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--EarningsPerShareBasic_i01_zfurkOuS6dv1" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.99</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(6.54</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_402_eus-gaap--EarningsPerShareDiluted_i01_zADxB41WiOLk" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.99</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(6.54</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify">*</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">On May 29, 2025, the Company implemented a one-for-thirty reverse stock split of the Company’s issued and outstanding ordinary shares. The computation of basic and diluted EPS was retroactively adjusted for all periods presented.</td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Components of basic and diluted earnings per share were as follows for the six months ended June 30, 2026 and 2025: SCHEDULE OF COMPONENTS OF BASIC AND DILUTED EARNINGS PER SHARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_497_20260101__20260630_zJ1EJSqI41L4" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2026*</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_496_20250101__20250630_zs0qLxd55H95" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2025*</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Numerator:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--NetIncomeLoss_zg70WcTxMiwg" style="vertical-align: bottom; background-color: White"> <td style="width: 60%; text-align: left; padding-bottom: 2.5pt">Net (loss)</td><td style="width: 2%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; width: 16%; text-align: right">(2,494,622</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left">)</td><td style="width: 2%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; width: 16%; text-align: right">(4,679,549</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Denominator:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_zo6XJIJEhlDa" style="vertical-align: bottom; background-color: White"> <td>Weighted average outstanding ordinary shares-Basic*</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,532,138</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">715,992</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--IncrementalCommonSharesAttributableToConversionOfDebtSecurities_zqimYSY9A4Lk" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">-dilutive effect of convertible note</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--WeightedAverageNumberOfDilutedSharesOutstanding_zKZnYPDFW51" style="vertical-align: bottom; background-color: White"> <td>Weighted average outstanding ordinary shares- Diluted*</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,532,138</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">715,992</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--EarningsPerShareReconciliationAbstract_iB_zJa79WsceTHb" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Earnings (loss) per share*</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--EarningsPerShareBasic_i01_zfurkOuS6dv1" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.99</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(6.54</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> <tr id="xdx_402_eus-gaap--EarningsPerShareDiluted_i01_zADxB41WiOLk" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.99</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(6.54</td><td style="padding-bottom: 2.5pt; text-align: left">)</td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify">*</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">On May 29, 2025, the Company implemented a one-for-thirty reverse stock split of the Company’s issued and outstanding ordinary shares. The computation of basic and diluted EPS was retroactively adjusted for all periods presented.</td></tr> </table>

-2494622

-4679549

2532138

715992

2532138

715992

-0.99

-6.54

-0.99

-6.54

6. RELATED PARTY TRANSACTIONS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(a)</td> <td style="font: 10pt Times New Roman, Times, Serif">Revenue – related parties</td></tr> </table> For the six months ended June 30, 2026 and 2025, approximately $<span id="xdx_905_eus-gaap--Revenues_pn5n6_c20260101__20260630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--TaopingAllianceCompaniesMember_zGAblK6UDG33" title="Revenues from related parties">0.1 million and $<span id="xdx_904_eus-gaap--Revenues_pp0p0_dxL_c20250101__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--TaopingAllianceCompaniesMember_ze9LPpoc5Yo6" title="Revenues from related parties::XDX::-">nil, respectively. <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(b)</td> <td style="font: 10pt Times New Roman, Times, Serif">Other revenue – related parties</td></tr> </table> Other revenue generated from related parties includes system maintenance service provided to Taoping affiliate customers, which was approximately $<span id="xdx_902_eus-gaap--OtherIncome_c20260101__20260630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--TaopingAffiliateCustomersMember__srt--ProductOrServiceAxis__custom--SystemMaintenanceServiceMember_zqQdTzMEw7Zb" title="Other revenue related party">570 and $<span id="xdx_900_eus-gaap--OtherIncome_c20250101__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--TaopingAffiliateCustomersMember__srt--ProductOrServiceAxis__custom--SystemMaintenanceServiceMember_zxMfw8oR0sjc" title="Other revenue related party">1,400, for the six months ended June 30, 2026 and 2025, respectively. <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(c)</td> <td style="font: 10pt Times New Roman, Times, Serif">Amounts due to related parties</td></tr> </table> As of June 30, 2026, the net amounts due to related parties were $2.3 million, which consist of amounts due to related parties of $2.5 million and amounts due from related parties of $0.2 million. The amounts due to related parties, used to support the Company’s business development, included (i) borrowing from the Company’s Chairman and Co-Chief Executive Officer, Mr. Jianghuai Lin (“Mr. Lin”), of approximately $0.3 million, with an interest rate of <span id="xdx_907_eus-gaap--DebtInstrumentInterestRateDuringPeriod_pid_dp_uPure_c20260101__20260630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--TaopingNewMediaCoLtdMember_zrZgjcr9Ywd" title="Debt interest rate">3%, and with maturity dates ranging from <span id="xdx_903_eus-gaap--DebtInstrumentMaturityDate_pid_dd_c20260101__20260630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--TaopingNewMediaCoLtdMember__srt--RangeAxis__srt--MinimumMember_zEQ7t5v1wwY8" title="Debt, maturity date">November 6, 2026 to <span id="xdx_90A_eus-gaap--DebtInstrumentMaturityDate_pid_dd_c20260101__20260630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--TaopingNewMediaCoLtdMember__srt--RangeAxis__srt--MaximumMember_z4Xgm4MdkRNd" title="Debt, maturity date">December 30, 2026; (ii) a loan balance of approximately $2.2 million (RMB15 million) from a related company 100% owned by Mr. Lin for 12-month at an interest rate of 4.75% per annum, which matures on March 21, 2027. The amounts due from related parties included the advances of out-of-pocket expenses to the Company’s heads of marketing and project execution departments, who are also minority shareholders of the Company, of approximately $0.2 million. These advances are expected to be fully claimed or collected by the end of 2026.

100000

570

1400

2300000

2500000

200000

300000

0.03

2026-11-06

2026-12-30

2200000

15000000

0.0475

2027-03-21

200000

7. INVENTORIES As of June 30, 2026 and December 31, 2025, inventories consist of: SCHEDULE OF INVENTORIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_495_20260630_zQZT0MGeRpcg" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_493_20251231_zU5z6WoRxvC2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--InventoryRawMaterialsAndSupplies_iI_pp0p0_maIGzdU1_zAmA6F5JZoJg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 54%; text-align: left">Raw materials</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$ </td><td style="width: 19%; text-align: right">3</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 19%; text-align: right">3</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--InventoryFinishedGoods_iI_pp0p0_maIGzdU1_zUP6FgNA1RWk" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Finished goods</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,181,589</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,039,671</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--InventoryGross_iTI_pp0p0_mtIGzdU1_maINztF9_zaSsbjdIIiP3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Inventories, gross</td><td> </td> <td style="text-align: left">$ </td><td style="text-align: right">1,181,592</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">1,039,674</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_ecustom--AllowanceForSlowMovingOrObsoleteInventories_iNI_pp0p0_di_msINztF9_zFblTY8L8kx1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Allowance for slow-moving or obsolete inventories</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(289,979</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(249,467</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--InventoryNet_iTI_pp0p0_mtINztF9_zKVc3q4x4h0h" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Inventories, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$ </td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">891,613</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">790,207</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> For the six months ended June 30, 2026, impairments expense for obsolete inventories were approximately $32,000, For the six months ended June 30, 2025, there was a reversal of allowance for obsolete inventories in the amount of approximately $4,900. Impairment charges on inventories are included with administrative expenses. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2026 and December 31, 2025, inventories consist of: SCHEDULE OF INVENTORIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_495_20260630_zQZT0MGeRpcg" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_493_20251231_zU5z6WoRxvC2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--InventoryRawMaterialsAndSupplies_iI_pp0p0_maIGzdU1_zAmA6F5JZoJg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 54%; text-align: left">Raw materials</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$ </td><td style="width: 19%; text-align: right">3</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 19%; text-align: right">3</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--InventoryFinishedGoods_iI_pp0p0_maIGzdU1_zUP6FgNA1RWk" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Finished goods</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,181,589</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,039,671</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--InventoryGross_iTI_pp0p0_mtIGzdU1_maINztF9_zaSsbjdIIiP3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Inventories, gross</td><td> </td> <td style="text-align: left">$ </td><td style="text-align: right">1,181,592</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">1,039,674</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_ecustom--AllowanceForSlowMovingOrObsoleteInventories_iNI_pp0p0_di_msINztF9_zFblTY8L8kx1" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Allowance for slow-moving or obsolete inventories</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(289,979</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(249,467</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--InventoryNet_iTI_pp0p0_mtINztF9_zKVc3q4x4h0h" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.5pt">Inventories, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$ </td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">891,613</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">790,207</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table>

1181589

1039671

1181592

1039674

289979 249467

891613

790207

32000

4900

8. PROPERTY, EQUIPMENT AND SOFTWARE As of June 30, 2026 and December 31, 2025, property, equipment and software consist of: SCHEDULE OF PROPERTY, EQUIPMENT AND SOFTWARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49E_20260630_z2GaYWl2lmVe" style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">June 30, 2026</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_492_20251231_zzAdcaoka1L7" style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2025</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; text-align: center">(Unaudited)</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_40E_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__srt--OfficeBuildingMember_z9kOInK5YZw8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; width: 62%">Office buildings</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%">$</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">4,114,534</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%">$</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">3,997,682</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td></tr> <tr id="xdx_40E_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ElectronicEquipmentFurnitureAndFixturesMember_zsrziEAgXPYi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white"> <td style="font: 10pt Times New Roman, Times, Serif">Electronic equipment, furniture and fixtures</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">4,141,384</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,925,955</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_40A_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MediaDisplayEquipmentMember_zW84Ft9mpUtg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif">Media display equipment</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">971,453</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">943,864</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_40F_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--PurchasedSoftwareMember_zxPA3IPdPO8h" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Purchased software</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9,628,645</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9,355,192</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td></tr> <tr id="xdx_409_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MotorVehicleMember_zlx6c6txkTU5" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Motor vehicle</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11,561</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11,770</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td></tr> <tr id="xdx_409_eus-gaap--PropertyPlantAndEquipmentGross_iI_maPPAENzCyd_zxmR5bF7BKD3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif">Total</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">18,867,577</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">18,234,463</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_405_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_di_msPPAENzCyd_zfJoaSCCOmx6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Less: accumulated depreciation</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(13,655,996</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">)</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(12,564,247</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">)</td></tr> <tr id="xdx_403_eus-gaap--PropertyPlantAndEquipmentNet_iTI_mtPPAENzCyd_zvjEGor26lTj" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Property, equipment and software, net</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif">$</td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,211,581</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif">$</td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,670,216</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td></tr> </table> Depreciation expenses for the six months ended June 30, 2026 and 2025 were approximately $0.7 million and $0.8 million, respectively. Management regularly evaluates property, equipment and software for impairment, if an event occurs or circumstances change that would potentially indicate that the carrying amount of the property, equipment and software exceeded its fair value. Company’s office buildings, with net carrying value of approximately $2.4 million, are used as collateral for its bank loans.

As of June 30, 2026 and December 31, 2025, property, equipment and software consist of: SCHEDULE OF PROPERTY, EQUIPMENT AND SOFTWARE <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49E_20260630_z2GaYWl2lmVe" style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">June 30, 2026</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_492_20251231_zzAdcaoka1L7" style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">December 31, 2025</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; text-align: center">(Unaudited)</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_40E_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__srt--OfficeBuildingMember_z9kOInK5YZw8" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; width: 62%">Office buildings</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%">$</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">4,114,534</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%">$</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">3,997,682</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td></tr> <tr id="xdx_40E_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--ElectronicEquipmentFurnitureAndFixturesMember_zsrziEAgXPYi" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white"> <td style="font: 10pt Times New Roman, Times, Serif">Electronic equipment, furniture and fixtures</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">4,141,384</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">3,925,955</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_40A_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MediaDisplayEquipmentMember_zW84Ft9mpUtg" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif">Media display equipment</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">971,453</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">943,864</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_40F_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--PurchasedSoftwareMember_zxPA3IPdPO8h" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Purchased software</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9,628,645</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">9,355,192</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td></tr> <tr id="xdx_409_eus-gaap--PropertyPlantAndEquipmentGross_iI_hus-gaap--PropertyPlantAndEquipmentByTypeAxis__custom--MotorVehicleMember_zlx6c6txkTU5" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Motor vehicle</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11,561</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11,770</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td></tr> <tr id="xdx_409_eus-gaap--PropertyPlantAndEquipmentGross_iI_maPPAENzCyd_zxmR5bF7BKD3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif">Total</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">18,867,577</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">18,234,463</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_405_eus-gaap--AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment_iNI_di_msPPAENzCyd_zfJoaSCCOmx6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Less: accumulated depreciation</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(13,655,996</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">)</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(12,564,247</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">)</td></tr> <tr id="xdx_403_eus-gaap--PropertyPlantAndEquipmentNet_iTI_mtPPAENzCyd_zvjEGor26lTj" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Property, equipment and software, net</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif">$</td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,211,581</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif">$</td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">5,670,216</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td></tr> </table>

4114534

3997682

4141384

3925955

971453

943864

9628645

9355192

11561

11770

18867577

18234463

13655996

12564247

5211581

5670216

700000

800000

2400000

9. BANK LOANS (a) Short-term bank loans SCHEDULE OF SHORT-TERM BANK LOANS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49B_20260630_zVIbg10wVtfh" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49A_20251231_z3Sqfe89L7Me" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--SecuredDebt_iI_maSTBz4vd_zbZSpTHtpTZ2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Secured short-term loans (1)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,471,130</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">2,144,025</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--UnsecuredDebt_iI_maSTBz4vd_zh5tKrDvtzQb" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unsecured short-term loans (2)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,736,670</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,542,269</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--AmountsDueWithinOneYearUnderLongtermLoanContracts_iI_maSTBz4vd_zczEXJ55kro7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Add: amounts due within one year under long-term loan contracts</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">328,356</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">319,031</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--ShortTermBorrowings_iTI_mtSTBz4vd_zwb7XF4vkBDb" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total short-term bank loans</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">5,536,156</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">4,005,325</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 15pt; text-align: right">(1)</td><td style="width: 5pt"></td><td style="text-align: justify">Detailed information of secured short-term loan balances as of June 30, 2026 and December 31, 2025 were as follows:</td> </tr></table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"> <tr style="display: none; vertical-align: top; text-align: justify"> <td id="xdx_F00_zGuEIAVOD6l4" style="display: none; text-align: right; width: 15pt">(2)</td><td style="display: none; width: 5pt"></td><td style="display: none; text-align: justify">Unsecured short-term loans are fiduciary bank loans, bearing fixed interest rates, ranging from 3.0% to 3.6%, due within one year.</td> </tr> </table> SCHEDULE OF SECURED SHORT-TERM LOAN BALANCES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20260630_ztiCc0fGX5Kb" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49E_20251231_zdxMWRn1FKl3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--SecuredDebt_iI_hus-gaap--ShortTermDebtTypeAxis__custom--BankLoanOneMember_zesi85YuSVGg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Guaranteed by Mr. Lin and IST HK</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,471,130</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,429,350</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--SecuredDebt_iI_hus-gaap--ShortTermDebtTypeAxis__custom--BankLoanTwoMember_zTljh3zriDBd" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Guaranteed by Mr. Lin and Mr. Du Yong</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">714,675</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--SecuredDebt_iI_zqwjLSWHdfN8" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,471,130</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">2,144,025</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> (2) Unsecured short-term loans are fiduciary bank loans, bearing fixed interest rates, ranging from 3.0% to 3.6%, due within one year. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (b) Long-term bank loans SCHEDULE OF LONG-TERM BANK LOANS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49C_20260630_z9VzBJMSLrkf" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49D_20250630_zYUIsfwrF1Si" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--SecuredLongTermDebt_iI_maLTDznd5_zvKkUulcxuxd" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Secured long-term loans</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">6,065,321</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">6,052,583</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_400_ecustom--LongTermAmountsDueWithinOneYearUnderLongtermLoanContracts_iI_maLTDznd5_zHT27sG5pV12" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: amounts due within one year under long-term loan contracts</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(328,356</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(319,031</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40D_eus-gaap--LongTermDebt_iTI_mtLTDznd5_zpoyphgjVlLc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total long-term bank loans</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">5,736,965</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">5,733,552</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> Detailed information of secured long-term loan balances as of June 30, 2026 and December 31, 2025 were as follows: SCHEDULE OF SECURED LONG-TERM BANK LOAN BALANCES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_495_20260630_ztiXvD8XR0cj" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49D_20251231_zqut7eEZxGfl" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr id="xdx_400_eus-gaap--SecuredLongTermDebt_iI_hus-gaap--ShortTermDebtTypeAxis__custom--BankLoanOneMember_zrFatwOSsF1e" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Guaranteed by ISIOT and Mr. Lin and Collateralized by real property of ISIOT, future rental income of ISIOT, patents of Biznest, and equity investment of IST HK</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,000,368</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,066,296</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--SecuredLongTermDebt_iI_hus-gaap--ShortTermDebtTypeAxis__custom--BankLoanTwoMember_zTae2gpdPKy" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Collateralized by office buildings of IST and guaranteed by Mr. Lin</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,464,732</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,364,520</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--SecuredLongTermDebt_iI_hus-gaap--ShortTermDebtTypeAxis__custom--BankLoanThreeMember_zZRwBN11II2i" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Guaranteed by Biznest, ISIOT, IST, and Mr. Lin and Collateralized by real property of ISIOT, office buildings of IST, patents of TNM, and future rental income of ISIOT</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">600,221</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">621,767</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--SecuredLongTermDebt_iI_zMcJk3kwI524" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">6,065,321</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">6,052,583</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> As of June 30, 2026, the Company had short-term and long-term bank loans in total of approximately $11.3 million, which mature on various dates from October 31, 2026 to October 31, 2027. The short-term bank loans may be extended upon maturity for another year by the banks without additional charges to the Company. The bank borrowings are in the form of credit facilities. Amounts available to the Company from the banks are based on the amount of collateral pledged or the amount guaranteed by the Company’s subsidiaries and Mr. Lin. These short-term borrowings bear fixed interest rates ranging from <span id="xdx_90A_eus-gaap--DebtInstrumentInterestRateDuringPeriod_pid_dp_uPure_c20260101__20260630__us-gaap--DebtInstrumentAxis__us-gaap--ShortTermDebtMember__srt--RangeAxis__srt--MinimumMember_zfG6jrvbFYMb" title="Debt instrument interest rate">3.00% to <span id="xdx_903_eus-gaap--DebtInstrumentInterestRateDuringPeriod_pid_dp_uPure_c20260101__20260630__us-gaap--DebtInstrumentAxis__us-gaap--ShortTermDebtMember__srt--RangeAxis__srt--MaximumMember_zN0iS082IuTd" title="Debt instrument interest rate">3.60% per annum. These long-term borrowings bear <span id="xdx_904_eus-gaap--DebtInstrumentInterestRateTerms_uPure_c20260101__20260630__us-gaap--DebtInstrumentAxis__us-gaap--LongTermDebtMember__srt--RangeAxis__srt--MinimumMember_zTzofdTRyok7" title="Debt interest rate description">floating interest rates at the 1-year China Loan Prime Rate (“LPR”) plus 40 to 105 basis points, ranging from <span id="xdx_907_eus-gaap--DebtInstrumentInterestRateDuringPeriod_pid_dp_uPure_c20260101__20260630__us-gaap--DebtInstrumentAxis__us-gaap--LongTermDebtMember__srt--RangeAxis__srt--MinimumMember_z3ujWC2vDArf" title="Debt instrument interest rate">3.40% to <span id="xdx_907_eus-gaap--DebtInstrumentInterestRateDuringPeriod_pid_dp_uPure_c20260101__20260630__us-gaap--DebtInstrumentAxis__us-gaap--LongTermDebtMember__srt--RangeAxis__srt--MaximumMember_zv60u8vTib8" title="Debt interest rate">4.05% per annum. The weighted average interest rates on short-term and long-term debts were approximately 3.44% and 3.99% for the six months ended June 30, 2026 and 2025, respectively. The interest expenses were approximately $0.2 million and $0.2 million, respectively, for the six months ended June 30, 2026 and 2025.

(a) Short-term bank loans SCHEDULE OF SHORT-TERM BANK LOANS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49B_20260630_zVIbg10wVtfh" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49A_20251231_z3Sqfe89L7Me" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--SecuredDebt_iI_maSTBz4vd_zbZSpTHtpTZ2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Secured short-term loans (1)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,471,130</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">2,144,025</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--UnsecuredDebt_iI_maSTBz4vd_zh5tKrDvtzQb" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Unsecured short-term loans (2)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3,736,670</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,542,269</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--AmountsDueWithinOneYearUnderLongtermLoanContracts_iI_maSTBz4vd_zczEXJ55kro7" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Add: amounts due within one year under long-term loan contracts</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">328,356</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">319,031</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--ShortTermBorrowings_iTI_mtSTBz4vd_zwb7XF4vkBDb" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total short-term bank loans</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">5,536,156</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">4,005,325</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 15pt; text-align: right">(1)</td><td style="width: 5pt"></td><td style="text-align: justify">Detailed information of secured short-term loan balances as of June 30, 2026 and December 31, 2025 were as follows:</td> </tr></table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"> <tr style="display: none; vertical-align: top; text-align: justify"> <td id="xdx_F00_zGuEIAVOD6l4" style="display: none; text-align: right; width: 15pt">(2)</td><td style="display: none; width: 5pt"></td><td style="display: none; text-align: justify">Unsecured short-term loans are fiduciary bank loans, bearing fixed interest rates, ranging from 3.0% to 3.6%, due within one year.</td> </tr> </table>

1471130

2144025

3736670

1542269

328356 319031

5536156

4005325

SCHEDULE OF SECURED SHORT-TERM LOAN BALANCES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20260630_ztiCc0fGX5Kb" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49E_20251231_zdxMWRn1FKl3" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--SecuredDebt_iI_hus-gaap--ShortTermDebtTypeAxis__custom--BankLoanOneMember_zesi85YuSVGg" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Guaranteed by Mr. Lin and IST HK</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,471,130</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,429,350</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--SecuredDebt_iI_hus-gaap--ShortTermDebtTypeAxis__custom--BankLoanTwoMember_zTljh3zriDBd" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Guaranteed by Mr. Lin and Mr. Du Yong</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">714,675</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--SecuredDebt_iI_zqwjLSWHdfN8" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">1,471,130</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">2,144,025</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table>

1471130

1429350

714675

1471130

2144025

0.030

0.036

(b) Long-term bank loans SCHEDULE OF LONG-TERM BANK LOANS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49C_20260630_z9VzBJMSLrkf" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49D_20250630_zYUIsfwrF1Si" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--SecuredLongTermDebt_iI_maLTDznd5_zvKkUulcxuxd" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Secured long-term loans</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">6,065,321</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">6,052,583</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_400_ecustom--LongTermAmountsDueWithinOneYearUnderLongtermLoanContracts_iI_maLTDznd5_zHT27sG5pV12" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: amounts due within one year under long-term loan contracts</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(328,356</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(319,031</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40D_eus-gaap--LongTermDebt_iTI_mtLTDznd5_zpoyphgjVlLc" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total long-term bank loans</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">5,736,965</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">5,733,552</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table>

6065321

6052583

-328356 -319031

5736965

5733552

Detailed information of secured long-term loan balances as of June 30, 2026 and December 31, 2025 were as follows: SCHEDULE OF SECURED LONG-TERM BANK LOAN BALANCES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_495_20260630_ztiXvD8XR0cj" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49D_20251231_zqut7eEZxGfl" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr id="xdx_400_eus-gaap--SecuredLongTermDebt_iI_hus-gaap--ShortTermDebtTypeAxis__custom--BankLoanOneMember_zrFatwOSsF1e" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Guaranteed by ISIOT and Mr. Lin and Collateralized by real property of ISIOT, future rental income of ISIOT, patents of Biznest, and equity investment of IST HK</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,000,368</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">1,066,296</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--SecuredLongTermDebt_iI_hus-gaap--ShortTermDebtTypeAxis__custom--BankLoanTwoMember_zTae2gpdPKy" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Collateralized by office buildings of IST and guaranteed by Mr. Lin</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,464,732</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,364,520</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--SecuredLongTermDebt_iI_hus-gaap--ShortTermDebtTypeAxis__custom--BankLoanThreeMember_zZRwBN11II2i" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Guaranteed by Biznest, ISIOT, IST, and Mr. Lin and Collateralized by real property of ISIOT, office buildings of IST, patents of TNM, and future rental income of ISIOT</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">600,221</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">621,767</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--SecuredLongTermDebt_iI_zMcJk3kwI524" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">6,065,321</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">6,052,583</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table>

1000368

1066296

4464732

4364520

600221

621767

6065321

6052583

11300000

mature on various dates from October 31, 2026 to October 31, 2027

0.0300

0.0360

floating interest rates at the 1-year China Loan Prime Rate (“LPR”) plus 40 to 105 basis points

0.0340

0.0405

0.0344

0.0399

200000

10. INCOME TAXES Pre-tax (loss) income for the six months ended June 30, 2026 and 2025 were taxable in the following jurisdictions: SCHEDULE OF INCOME BEFORE INCOME TAXES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%">PRC</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20260101__20260630__us-gaap--IncomeTaxAuthorityAxis__custom--PRCMember_z4QRxzRzdD4e" style="width: 16%; text-align: right" title="Total (loss) before income taxes">(2,064,298</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98B_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20250101__20250630__us-gaap--IncomeTaxAuthorityAxis__custom--PRCMember_zVegp4SZWmxe" style="width: 16%; text-align: right" title="Total (loss) before income taxes">(4,198,659</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>HK</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20260101__20260630__us-gaap--IncomeTaxAuthorityAxis__country--HK_zy4UQT9ZB4x2" style="text-align: right" title="Total (loss) before income taxes">(4,215</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20250101__20250630__us-gaap--IncomeTaxAuthorityAxis__country--HK_z3sKWDzzBc43" style="text-align: right" title="Total (loss) before income taxes">(285</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">BVI</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_983_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20260101__20260630__us-gaap--IncomeTaxAuthorityAxis__custom--BVIMember_z50wrabaeqc2" style="border-bottom: Black 1pt solid; text-align: right" title="Total (loss) before income taxes">(411,507</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98A_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20250101__20250630__us-gaap--IncomeTaxAuthorityAxis__custom--BVIMember_zcoJOFH8pcX5" style="border-bottom: Black 1pt solid; text-align: right" title="Total (loss) before income taxes">(459,885</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total (loss) income before income taxes</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20260101__20260630_zOHhTEhJLdW3" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Total (loss) before income taxes">(2,480,020</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_981_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20250101__20250630_zMRdgWDdjVb2" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Total (loss) before income taxes">(4,658,829</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</td></tr> </table> United States The Company from time to time evaluates the tax effect of global intangible low-taxed income (“GILTI”), and determined that there was no impact of GILTI tax to the Company’s consolidated financial statements as of June 30, 2026. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS BVI Under the current laws of the BVI, dividends and capital gains arising from the Company’s investments in the BVI and ordinary income, if any, are not subject to income taxes. HK Under the current laws of Hong Kong, IST HK is subject to a profit tax rate of <span id="xdx_906_eus-gaap--EffectiveIncomeTaxRateReconciliationForeignIncomeTaxRateDifferential_pid_dp_uPure_c20260101__20260630__us-gaap--IncomeTaxAuthorityAxis__country--HK_zeeL74I1MQZh" title="Tax profit rate">16.5%. PRC Income tax expense consists of the following: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold"> </td> <td colspan="2" id="xdx_491_20260101__20260630_ztioWQWSa2v7" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" id="xdx_49A_20250101__20250630_zC8IwAyG3ys9" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td></tr> <tr id="xdx_400_eus-gaap--CurrentIncomeTaxExpenseBenefit_maITEBz78J_zrdvBkEnskeb" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left; padding-bottom: 1pt">Current tax expense</td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 16%; text-align: right">14,602</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 16%; text-align: right">20,720</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--IncomeTaxExpenseBenefit_iT_mtITEBz78J_zVoomV3CItsc" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Income tax expense</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">14,602</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">20,720</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Current income tax expense was recorded in the six-month period ended 2026 and 2025 and was related to differences between the book and corporate income tax returns. SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold"> </td> <td colspan="2" id="xdx_491_20260101__20260630_zAiUp4woSZXi" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" id="xdx_495_20250101__20250630_zxPlvygGhYy5" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td></tr> <tr id="xdx_406_eus-gaap--EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate_pid_dp_uPure_zq2Yw32pciBa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">PRC statutory tax rate</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">25</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">25</td><td style="width: 1%; text-align: left">%</td></tr> <tr id="xdx_40C_ecustom--ComputedExpectedIncomeTaxExpenseBenefit_maITEBze8w_zKo10IfnbSOl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Expected income tax (benefit) expense</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">(620,005</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">(1,164,707</td><td style="text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--IncomeTaxReconciliationChangeInEnactedTaxRate_maITEBze8w_z9tZjI0EzIF3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Tax rate difference</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">82,486</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">193,782</td><td style="text-align: left"></td></tr> <tr id="xdx_403_eus-gaap--IncomeTaxReconciliationTaxExemptIncome_iN_di_msITEBze8w_zwyev5YmrYgl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Permanent differences</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(119,844</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">695,305</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--IncomeTaxReconciliationTaxEffectOfTemporaryDifferencesNotRecognized_iN_di_msITEBze8w_zcaibFV8MVpe" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Tax effect of tax losses unrecognized</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">671,965</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">296,340</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--IncomeTaxExpenseBenefit_iT_mtITEBze8w_zEkD1spSVY02" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Income tax expense</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">14,602</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">20,720</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS The Company’s tax loss carry forwards totaling RMB150.8 million ($22.0 million) as of June 30, 2026, substantially all of which were from PRC subsidiaries and will expire on various dates through June 30, 2036. Deferred tax asset was not provided for respective tax losses. IST is approved as being high-technology enterprises and subject to PRC enterprise income tax rate (“EIT”) at <span id="xdx_90D_eus-gaap--EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--HighTechnologyEnterpriseMember_z8IhlQTM2HX" title="Enterprise income tax rate">15%. For Biznest, the income tax starts from the earning year, is tax exempt for the first two years and is subject to <span id="xdx_903_eus-gaap--EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes_pid_dp_uPure_c20260101__20260630__dei--LegalEntityAxis__custom--BiznestMember_zCvOGi44mbeg" title="Enterprise income tax rate">12.5% income tax rate for year 3-5. The Company recognizes that virtually all tax positions in the PRC are not free of some degree of uncertainty due to tax law and policy changes by the State. However, the Company cannot reasonably quantify political risk factors and thus must depend on guidance issued by current State officials. Based on all known facts, circumstances, and current tax law, the Company has not recorded tax benefits as of June 30, 2026 and December 31, 2025, respectively. The Company believes that there are no tax positions for which it is reasonably possible, based on current Chinese tax laws and policies, that the unrecognized tax benefits will significantly increase or decrease over the next 12 months, individually or in the aggregate, and have a material effect on the Company’s results of operations, financial condition or cash flows. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Any accrued interest or penalties associated with any unrecognized tax benefits were not significant for the six months ended June 30, 2026 and 2025. Since the Company intends to reinvest its earnings to further expand its businesses in the PRC, the PRC subsidiaries do not intend to declare dividends to their parent companies in the foreseeable future. The Company’s foreign subsidiaries are in a cumulative deficit position. Accordingly, the Company has not recorded any deferred taxes on the cumulative amount of any undistributed deficit. It is impractical to calculate the tax effect of the deficit at this time.

Pre-tax (loss) income for the six months ended June 30, 2026 and 2025 were taxable in the following jurisdictions: SCHEDULE OF INCOME BEFORE INCOME TAXES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%">PRC</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20260101__20260630__us-gaap--IncomeTaxAuthorityAxis__custom--PRCMember_z4QRxzRzdD4e" style="width: 16%; text-align: right" title="Total (loss) before income taxes">(2,064,298</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98B_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20250101__20250630__us-gaap--IncomeTaxAuthorityAxis__custom--PRCMember_zVegp4SZWmxe" style="width: 16%; text-align: right" title="Total (loss) before income taxes">(4,198,659</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td>HK</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20260101__20260630__us-gaap--IncomeTaxAuthorityAxis__country--HK_zy4UQT9ZB4x2" style="text-align: right" title="Total (loss) before income taxes">(4,215</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20250101__20250630__us-gaap--IncomeTaxAuthorityAxis__country--HK_z3sKWDzzBc43" style="text-align: right" title="Total (loss) before income taxes">(285</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">BVI</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_983_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20260101__20260630__us-gaap--IncomeTaxAuthorityAxis__custom--BVIMember_z50wrabaeqc2" style="border-bottom: Black 1pt solid; text-align: right" title="Total (loss) before income taxes">(411,507</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98A_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20250101__20250630__us-gaap--IncomeTaxAuthorityAxis__custom--BVIMember_zcoJOFH8pcX5" style="border-bottom: Black 1pt solid; text-align: right" title="Total (loss) before income taxes">(459,885</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total (loss) income before income taxes</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20260101__20260630_zOHhTEhJLdW3" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Total (loss) before income taxes">(2,480,020</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_981_ecustom--IncomeLossFromContinuingAndDiscontinuedOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_c20250101__20250630_zMRdgWDdjVb2" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Total (loss) before income taxes">(4,658,829</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</td></tr> </table>

-2064298 -4198659 -4215 -285 -411507 -459885 -2480020 -4658829

0.165

Income tax expense consists of the following: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold"> </td> <td colspan="2" id="xdx_491_20260101__20260630_ztioWQWSa2v7" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" id="xdx_49A_20250101__20250630_zC8IwAyG3ys9" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td></tr> <tr id="xdx_400_eus-gaap--CurrentIncomeTaxExpenseBenefit_maITEBz78J_zrdvBkEnskeb" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left; padding-bottom: 1pt">Current tax expense</td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 16%; text-align: right">14,602</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1pt solid; width: 16%; text-align: right">20,720</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--IncomeTaxExpenseBenefit_iT_mtITEBz78J_zVoomV3CItsc" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Income tax expense</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">14,602</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">20,720</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

14602

20720

14602

20720

Current income tax expense was recorded in the six-month period ended 2026 and 2025 and was related to differences between the book and corporate income tax returns. SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold"> </td> <td colspan="2" id="xdx_491_20260101__20260630_zAiUp4woSZXi" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td><td style="font-weight: bold"> </td> <td colspan="2" id="xdx_495_20250101__20250630_zxPlvygGhYy5" style="font-weight: bold; text-align: center">Six Months Ended</td><td style="font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td><td style="text-align: center; font-weight: bold"> </td> <td style="font-weight: bold; text-align: center"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: center"> </td></tr> <tr id="xdx_406_eus-gaap--EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate_pid_dp_uPure_zq2Yw32pciBa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">PRC statutory tax rate</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">25</td><td style="width: 1%; text-align: left">%</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 16%; text-align: right">25</td><td style="width: 1%; text-align: left">%</td></tr> <tr id="xdx_40C_ecustom--ComputedExpectedIncomeTaxExpenseBenefit_maITEBze8w_zKo10IfnbSOl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Expected income tax (benefit) expense</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">(620,005</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">(1,164,707</td><td style="text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--IncomeTaxReconciliationChangeInEnactedTaxRate_maITEBze8w_z9tZjI0EzIF3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Tax rate difference</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">82,486</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">193,782</td><td style="text-align: left"></td></tr> <tr id="xdx_403_eus-gaap--IncomeTaxReconciliationTaxExemptIncome_iN_di_msITEBze8w_zwyev5YmrYgl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Permanent differences</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(119,844</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">695,305</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--IncomeTaxReconciliationTaxEffectOfTemporaryDifferencesNotRecognized_iN_di_msITEBze8w_zcaibFV8MVpe" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Tax effect of tax losses unrecognized</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">671,965</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">296,340</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--IncomeTaxExpenseBenefit_iT_mtITEBze8w_zEkD1spSVY02" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Income tax expense</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">14,602</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">20,720</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table>

0.25

-620005 -1164707

82486

193782

119844

-695305

-671965 -296340

14602

20720

150800000

22000000.0

0.15

0.125

11. OTHER CURRENT ASSETS As of June 30, 2026, and December 31, 2025, other current assets consist of: SCHEDULE OF OTHER CURRENT ASSETS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_491_20260630_zGgwQrUZqBOl" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49B_20251231_zPeYg5MRBzNf" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr id="xdx_403_ecustom--AdvancesToUnrelatedparties_iI_pp0p0_maOACzEPf_maOACzCLe_zCmmn7WUAEO4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Advances to unrelated parties (i)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">4,105,779</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">2,097,054</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--OtherReceivables_iI_pp0p0_maOACzCLe_zw4zXS4xk006" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Advances to a related party</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,474</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">837,606</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--OtherReceivablesNetCurrent_iI_pp0p0_maOACzCLe_zkJfaE1WNWt3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Advances to employees</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,740</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">46,783</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_ecustom--OtherCurrentAssets_iI_pp0p0_maOACzEPf_maOACzCLe_zWmi746fzMpc" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Other current assets</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">91,593</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">76,298</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--OtherAssetsCurrent_iTI_pp0p0_mtOACzCLe_zHEV1ClACt1j" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">4,244,586</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">3,057,741</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(i)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The advances to unrelated parties for business development are non-interest bearing and are due on demand.</td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2026, and December 31, 2025, other current assets consist of: SCHEDULE OF OTHER CURRENT ASSETS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_491_20260630_zGgwQrUZqBOl" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49B_20251231_zPeYg5MRBzNf" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr id="xdx_403_ecustom--AdvancesToUnrelatedparties_iI_pp0p0_maOACzEPf_maOACzCLe_zCmmn7WUAEO4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Advances to unrelated parties (i)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">4,105,779</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">2,097,054</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--OtherReceivables_iI_pp0p0_maOACzCLe_zw4zXS4xk006" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Advances to a related party</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,474</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">837,606</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--OtherReceivablesNetCurrent_iI_pp0p0_maOACzCLe_zkJfaE1WNWt3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Advances to employees</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,740</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">46,783</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_ecustom--OtherCurrentAssets_iI_pp0p0_maOACzEPf_maOACzCLe_zWmi746fzMpc" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Other current assets</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">91,593</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">76,298</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--OtherAssetsCurrent_iTI_pp0p0_mtOACzCLe_zHEV1ClACt1j" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Total</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">4,244,586</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">3,057,741</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(i)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The advances to unrelated parties for business development are non-interest bearing and are due on demand.</td></tr> </table>

4105779 2097054

1474

837606

45740

46783

91593 76298

4244586

3057741

12. OPERATING LEASES The Company leases an office space, a warehouse, and seven dormitories in Tianjin. The office space lease commenced in May 2025 and expires in December 2027; the warehouse lease commenced in November 2024 and expires in July 2026; and the seven dormitories have varying lease terms, with the earliest commencement date in June 2025 and the latest expiration date in July 2027. The fixed monthly lease payment for the long-term lease of office space is RMB 11,000, RMB <span id="xdx_904_eus-gaap--PaymentsForRent_pp0p0_uRMB_c20260101__20261231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OfficeSpaceMember__srt--StatementScenarioAxis__srt--ScenarioForecastMember_zlIblKCAAZVe" title="Payments for rent">27,000, and RMB <span id="xdx_902_eus-gaap--PaymentsForRent_pp0p0_uRMB_c20270101__20271231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OfficeSpaceMember__srt--StatementScenarioAxis__srt--ScenarioForecastMember_zpnwOMS28Vwl" title="Payments for rent">37,000 in 2025, 2026 and 2027 (approximately $1,500, $<span id="xdx_907_eus-gaap--PaymentsForRent_pp0p0_c20260101__20261231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OfficeSpaceMember__srt--StatementScenarioAxis__srt--ScenarioForecastMember_zRCcX3sDMLJ6" title="Payments for rent">3,800, and $<span id="xdx_905_eus-gaap--PaymentsForRent_pp0p0_c20270101__20271231__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--OfficeSpaceMember__srt--StatementScenarioAxis__srt--ScenarioForecastMember_zdH4fqmmkDzb" title="Payments for rent">5,100, respectively), exclusive of applicable taxes and property management fees. The fixed monthly lease payment for the short-term lease of warehouse and seven dormitories ranges from RMB <span id="xdx_907_eus-gaap--PaymentsForRent_pp0p0_uRMB_c20260101__20260630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--DormitoryLeaseMember__srt--RangeAxis__srt--MinimumMember_zchZWxbZ2MGg" title="Payments for rent">950 to RMB <span id="xdx_90B_eus-gaap--PaymentsForRent_pp0p0_uRMB_c20260101__20260630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--DormitoryLeaseMember__srt--RangeAxis__srt--MaximumMember_zj9z4QeBcrF7" title="Payments for rent">3,500 (approximately $<span id="xdx_90D_eus-gaap--PaymentsForRent_pp0p0_c20260101__20260630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--DormitoryLeaseMember__srt--RangeAxis__srt--MinimumMember_zde5iA0NiSzj" title="Payments for rent">100 to $<span id="xdx_90D_eus-gaap--PaymentsForRent_pp0p0_c20260101__20260630__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--DormitoryLeaseMember__srt--RangeAxis__srt--MaximumMember_zJoo3T861YJ9" title="Payments for rent">500), exclusive of applicable taxes and property management fees. The Company has also leased specific and identifiable wall spaces with a certain dimension in commercial and residential building lobbies, inside elevators, elevator waiting areas, and various places to install the new media advertising display terminals without substitution for purpose of broadcasting advertisements paid by the customers to promote their businesses or special events. The lease terms with negotiated payment terms range from 1 one year to three years, and the rental costs vary depending on the number of spots where the display terminals are installed and the duration of the leases. The Company incurred rent expenses for short-term lease of approximately $12,000 for the period ended June 30, 2026. The Company has elected to apply the short-term lease exception to all leases with a term of 1one year or less. Weighted-average remaining lease term as of June 30, 2026, and discount rate for its operating leases are as follows: SCHEDULE OF WEIGHTED AVERAGE LEASE TERM <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 49%">Weighted-average remaining lease term</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%; text-align: justify"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 49%; text-align: justify">18 months</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted-average discount rate</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">3.50%</td></tr> </table> The weighted-average discount rate was based on the 5five-year interest rate of People’s Bank of China. The following table outlines maturities of operating lease liabilities as of June 30, 2026: SCHEDULE OF MATURITIES OPERATING LEASE LIABILITIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Year ending June 30</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_497_20260630_zogLnSLX2qSd" style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Lease for office</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td></tr> <tr id="xdx_40B_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_zH2HwHUAuIHl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%">2026</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">23,741</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td></tr> <tr id="xdx_40E_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_zC4ZRIPCLYj6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">2027</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">65,934</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td></tr> <tr id="xdx_403_eus-gaap--OperatingLeaseLiability_iTI_maLOLLPzNbJ_zc2PJJNScTa3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif">Total lease payments</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">89,675</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_408_ecustom--LesseeOperatingLeaseLiabilityUndiscountExcessAmount_iNI_di_msLOLLPzNbJ_zEL5c8XmTkfj" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Less: Imputed interest</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,809</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">)</td></tr> <tr id="xdx_405_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDue_iTI_mtLOLLPzNbJ_zwdciBQPvpKa" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Present value of lease liabilities</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">86,866</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

11000

27000

37000

1500

3800

5100

950

3500

100

500

P1Y

P3Y

12000

P1Y

Weighted-average remaining lease term as of June 30, 2026, and discount rate for its operating leases are as follows: SCHEDULE OF WEIGHTED AVERAGE LEASE TERM <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 49%">Weighted-average remaining lease term</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%; text-align: justify"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 49%; text-align: justify">18 months</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif">Weighted-average discount rate</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">3.50%</td></tr> </table>

P18M

0.0350

P5Y

The following table outlines maturities of operating lease liabilities as of June 30, 2026: SCHEDULE OF MATURITIES OPERATING LEASE LIABILITIES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Year ending June 30</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_497_20260630_zogLnSLX2qSd" style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">Lease for office</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td></tr> <tr id="xdx_40B_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_zH2HwHUAuIHl" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; width: 80%">2026</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 2%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td> <td style="font: 10pt Times New Roman, Times, Serif; width: 16%; text-align: right">23,741</td> <td style="font: 10pt Times New Roman, Times, Serif; width: 1%"> </td></tr> <tr id="xdx_40E_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_zC4ZRIPCLYj6" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">2027</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">65,934</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td></tr> <tr id="xdx_403_eus-gaap--OperatingLeaseLiability_iTI_maLOLLPzNbJ_zc2PJJNScTa3" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif">Total lease payments</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: right">89,675</td> <td style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr id="xdx_408_ecustom--LesseeOperatingLeaseLiabilityUndiscountExcessAmount_iNI_di_msLOLLPzNbJ_zEL5c8XmTkfj" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">Less: Imputed interest</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(2,809</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">)</td></tr> <tr id="xdx_405_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDue_iTI_mtLOLLPzNbJ_zwdciBQPvpKa" style="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: #CCEEFF"> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt">Present value of lease liabilities</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: black 2.25pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">86,866</td> <td style="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td></tr> </table>

23741

65934

89675

2809

86866

13. LONG-TERM INVESTMENTS Equity investments without readily determinable fair value that is not accounted for under equity method accounting: In accordance with ASC 321, the Company elected to use the measurement alternative to measure such investments at cost, less any impairment (if applicable plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer). As of June 30, 2026 and December 31, 2025, the carrying value for the equity investments without readily determinable fair value was $nil. The total initial investments to the equity investments without readily determinable fair value were approximately $647,000. As of December 31, 2025, full impairment had been recognized on such equity investments. There were no impairment charges or disposal activity recorded for the six months ended June 30, 2026. For the six months ended June 30, 2025, the additional investments to the equity investments without readily determinable fair value was approximately $22,000. Gain on disposal of approximately $0.07 million was recognized for the six months ended June 30, 2025. Impairment of approximately $<span id="xdx_909_eus-gaap--EquitySecuritiesWithoutReadilyDeterminableFairValueImpairmentLossAnnualAmount_pn4n6_c20250101__20250630_zmhOI0rexdIk" title="Impairment of equity investments without readily determinable fair value">0.02 million was recognized for the six months ended June 30, 2025.

647000

22000

70000.00

20000.00

14. CONVERTIBLE NOTE PAYABLE On September 27, 2023, the Company issued a Convertible Promissory Note (“Note”) in a private placement in aggregate principal amount of $609,000. The Note matures in 12 months from the issue date of the Note (the “Maturity Date”), with an annual interest rate of <span id="xdx_908_eus-gaap--DebtInstrumentInterestRateDuringPeriod_pid_dp_uPure_c20230927__20230927__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteMember_z9Pxs5rBtFcd" title="Debt instrument interest rate">8%. The Note carries an original issue discount of $44,000. In addition, the Company agrees to pay $15,000 to cover the transaction costs incurred in connection with the purchase and sale of this Note (“Transaction Expense Amount”). Thus, the net proceeds of the Note were $550,000. The Note is convertible into the Company’s ordinary shares at $<span id="xdx_907_eus-gaap--DebtInstrumentConvertibleConversionPrice1_iI_pid_c20230927__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteMember_z8tOA254w4wd" title="Debt instrument conversion price">240.0 per share or at a price equal to 80% multiplied by the lowest daily volume-weighted average price during the 10 trading days immediately preceding the applicable redemption, subject to certain adjustments and limitations, at the holder’s option at any time after six months from the issue date. On the Maturity Date, the holder of the Note has the right to convert all of the outstanding balance of the Note at a price of no less than $<span id="xdx_90D_eus-gaap--DebtInstrumentConvertibleConversionPriceIncrease_pid_c20230927__20230927__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteMember_zPthQgeZkqL2" title="Debt instrument floor price">60.0 per share (“Floor Price”), which is subject to adjustment by consents of both parties. The Note is recognized initially at fair value, net of debt discounts including original issue discount and Transaction Expense Amount. Amortizations of issuance costs and other Discounts accretion are recorded as interest expenses in the consolidated statement of operations. The Company recognized interest expense of approximately $34,000 for the six months ended June 30, 2025 including interest relating to contractual interest obligation approximately of $30,000 and amortization of the discounts and debt issuance cost approximately of $4,000. As of December 31, 2025, the total amount of principal and accrued interest of the Note was fully converted to the Company’s ordinary shares (see Note 17 Equity), and there was no outstanding balance and unamortized debt issuance cost of the Note. On January 13, 2025, the Company issued another Convertible Promissory Note (“Note-2”) in a private placement in aggregate principal amount of $1,311,000. <span id="xdx_90B_eus-gaap--DebtInstrumentMaturityDateDescription_c20250113__20250113__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteTwoMember_zQRsYrX8bDa2" title="Note maturity date description">Note-2 matures in 12 months from the issue date (the “Note-2 Maturity Date”), with an annual interest rate of <span id="xdx_90C_eus-gaap--DebtInstrumentInterestRateDuringPeriod_pid_dp_uPure_c20250113__20250113__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteTwoMember_zhFnLnrMjzvd" title="Note annual interest rate">7%. Note-2 carries an original issue discount of $96,000. In addition, the Company agrees to pay $15,000 to cover the transaction costs incurred in connection with the purchase and sale of this Note (“Note-2 Transaction Expense Amount”). Thus, the net proceeds of Note-2 were $1,200,000. Note-2 is convertible into the Company’s ordinary shares at $90.0 per share or at a price equal to 80% multiplied by the lowest daily volume-weighted average price during the 10 trading days immediately preceding the applicable redemption, subject to certain adjustments and limitations. On the Note-2 Maturity Date, the holder of Note-2 has the right to convert all of the outstanding balance of Note-2 at a price of no less than $<span id="xdx_90C_eus-gaap--DebtInstrumentConvertibleConversionPriceIncrease_pid_c20250113__20250113__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteTwoMember_zpy4ERZO0UK8" title="Note floor price">3.0 per share (“Note-2 Floor Price”), which is subject to adjustment by consents of both parties. Note-2 is recognized initially at fair value, net of debt discounts including original issue discount, and Note-2 Transaction Expense Amount, in the amount of $111,000. As of December 31, 2025, the remaining unamortized debt discount was $<span id="xdx_903_eus-gaap--DebtInstrumentUnamortizedDiscountCurrent_iI_dxL_c20251231__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteTwoMember_zp2mCQYWlu5h" title="Unamortized debt discount::XDX::-">nil. Amortizations of issuance costs and other Discounts accretion are recorded as interest expenses in the consolidated statement of operations. The Company recognized interest expense of approximately $570,000 for the period ended December 31, 2025 including interest relating to contractual interest obligation approximately of $34,000 and amortization of the discounts and debt issuance cost approximately of $<span id="xdx_90B_eus-gaap--AmortizationOfFinancingCostsAndDiscounts_pp0p0_c20250101__20251231__us-gaap--DebtInstrumentAxis__custom--ConvertiblePromissoryNoteTwoMember_zjsIF5j1ylG6" title="Amortization of discounts and debt issuance cost">539,000. As of December 31, 2025, the principal balance and accrued interest of Note-2 was fully converted to the Company’s ordinary shares in January, February, March, April, May, July, August, and September, and October 2025 (see Note 17 Equity), and the outstanding balance of Note-2 net of unamortized debt discount was $nil.

609000

0.08

44000

15000

550000

240.0

60.0

34000

30000

4000

1311000

Note-2 matures in 12 months from the issue date

0.07

96000

15000

1200000

90.0

3.0

111000

570000

34000

539000

15. OTHER PAYABLES AND ACCRUED EXPENSES As of June 30, 2026 and December 31, 2025, other payables and accrued expenses consist of: SCHEDULE OF OTHER PAYABLE AND ACCRUED EXPENSES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_491_20260630_z1wLYTbyxGsh" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49F_20251231_zSIb7xWamY7i" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="font-weight: bold"> </td> <td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_ecustom--AdvancesFromUnrelatedThirdparties_iI_maOPAAEz1G1_zDnam19y23sa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Advances from unrelated third parties (i)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">359,336</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">332,331</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--AccruedIncomeTaxesCurrent_iI_maOPAAEz1G1_zg72uNaPBFKh" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other taxes payable (ii)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,390,981</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,656,643</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--AccruedProfessionalFeesCurrent_iI_maOPAAEz1G1_zJuXVBkbO0ic" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accrued professional fees</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">225,500</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">547,350</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--EmployeeRelatedLiabilitiesCurrent_iI_maOPAAEz1G1_z81vtTMNpsvi" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Amount due to employees (iii)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">264,224</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">275,242</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--AccountsPayableOtherCurrent_iI_maOPAAEz1G1_zUpOcTUzP7b3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Others</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">96,857</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">119,605</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--AccountsPayableAndAccruedLiabilitiesCurrent_iTI_mtOPAAEz1G1_zq7k4FW4qdGd" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Other Payables and Accrued Expenses</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">3,336,898</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">3,931,171</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(i)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The advances from unrelated parties are non-interest bearing and due on demand.</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif">(ii)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The other taxes payable were the amounts due to the value added tax, business tax, city maintenance and construction tax, and individual income tax.</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif">(iii)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The amounts due to employees were pertaining to employees’ out-of-pocket expenses for travel and meal allowance, etc.</td></tr> </table>

As of June 30, 2026 and December 31, 2025, other payables and accrued expenses consist of: SCHEDULE OF OTHER PAYABLE AND ACCRUED EXPENSES <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_491_20260630_z1wLYTbyxGsh" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49F_20251231_zSIb7xWamY7i" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center"> </td><td style="font-weight: bold"> </td> <td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: center">(Unaudited)</td><td style="font-weight: bold; text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_ecustom--AdvancesFromUnrelatedThirdparties_iI_maOPAAEz1G1_zDnam19y23sa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 60%; text-align: left">Advances from unrelated third parties (i)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">359,336</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">332,331</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--AccruedIncomeTaxesCurrent_iI_maOPAAEz1G1_zg72uNaPBFKh" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Other taxes payable (ii)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,390,981</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,656,643</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--AccruedProfessionalFeesCurrent_iI_maOPAAEz1G1_zJuXVBkbO0ic" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Accrued professional fees</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">225,500</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">547,350</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--EmployeeRelatedLiabilitiesCurrent_iI_maOPAAEz1G1_z81vtTMNpsvi" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Amount due to employees (iii)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">264,224</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">275,242</td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--AccountsPayableOtherCurrent_iI_maOPAAEz1G1_zUpOcTUzP7b3" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Others</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">96,857</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">119,605</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--AccountsPayableAndAccruedLiabilitiesCurrent_iTI_mtOPAAEz1G1_zq7k4FW4qdGd" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Other Payables and Accrued Expenses</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">3,336,898</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">3,931,171</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(i)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The advances from unrelated parties are non-interest bearing and due on demand.</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif">(ii)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The other taxes payable were the amounts due to the value added tax, business tax, city maintenance and construction tax, and individual income tax.</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td></tr> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif">(iii)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">The amounts due to employees were pertaining to employees’ out-of-pocket expenses for travel and meal allowance, etc.</td></tr> </table>

359336 332331

2390981

2656643

225500

547350

264224

275242

96857

119605

3336898

3931171

16. RESERVE AND DISTRIBUTION OF PROFIT In accordance with relevant PRC regulations and the Articles of Association of our PRC subsidiaries, our PRC subsidiaries are required to allocate at least 10% of their annual after-tax profits determined in accordance with PRC statutory financial statements to a statutory general reserve fund until the amounts in said fund reaches 50% of their registered capital. As of June 30, 2026 and December 31, 2025, the balance of general reserve was $10.2 million and $10.2 million, respectively. Under the applicable PRC regulations, the Company may pay dividends only out of the accumulated profits, if any, determined in accordance with the PRC accounting standards and regulations. The statutory reserve funds can only be used for specific purposes under the PRC laws and regulations. The general reserves are not distributable as cash dividends. Our after-tax profits or losses with respect to the payment of dividends out of accumulated profits and the annual appropriation of after-tax profits as calculated pursuant to the PRC accounting standards and regulations do not result in significant differences as compared to after-tax earnings as presented in our consolidated financial statements. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 0.10 0.50 10200000 10200000

17. EQUITY (a) Ordinary shares The maximum number of shares that the Company authorized to issue was changed from 100,000,000 Ordinary Shares of one class each with no par value to 5,060,000,000 shares dividing into: (1) 5,000,000,000 Ordinary Shares with no par value each; (2) 50,000,000 class A shares with no par value each, and (3) 10,000,000 preferred shares with no par value each. In January 2025, the Company issued 40,000 ordinary shares to an investor at $<span id="xdx_90A_eus-gaap--SharesIssuedPricePerShare_iI_pid_c20250101__srt--TitleOfIndividualAxis__us-gaap--InvestorMember__srt--RangeAxis__srt--MaximumMember_zIoRCuj4TYRi" title="Shares issued price per share">7.947 per share, which generated a total of net proceeds of $317,880 for the Company. In January 2025, the holder of the Company’s convertible promissory note issued in January 2025 converted an amount of $<span id="xdx_902_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250101__20250131__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteOneMember_zKwz1bqKtOlf" title="Partial principal and accrued interest amount">50,000, $<span id="xdx_908_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250101__20250131__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteTwoMember_zb2l1CVJ3DA4" title="Partial principal and accrued interest amount">100,000, and $<span id="xdx_905_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250101__20250131__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteThreeMember_z4K7XYy3Fa5g" title="Partial principal and accrued interest amount">125,000 of partial principal, into a total of <span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20250101__20250131__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zlImcJ0tS1k9" title="Number of shares converted">39,741 ordinary shares of the Company, with a conversion price at $7.398, $7.299, and $6.483 per share, respectively. In February 2025, the holder of the Company’s convertible promissory note issued in January 2025 converted an amount of $<span id="xdx_90A_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250201__20250201__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zcNYgoAt4MV3" title="Partial principal and accrued interest amount">125,000 of partial principal with a conversion price at $6.249 per share into <span id="xdx_90A_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20250201__20250201__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zeWHGhBBNKwg" title="Number of shares converted">20,003 ordinary shares of the Company. In February 2025, the Company issued <span id="xdx_900_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_c20250201__20250228__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--InvestorMember_zXrUtnhiBcBd" title="Number of shares issued">16,667 ordinary shares to an investor at $8.16 per share, which generated a total of net proceeds of $<span id="xdx_904_eus-gaap--ProceedsFromIssuanceOfCommonStock_c20250201__20250228__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--InvestorMember_z58aMl6AbaLe" title="Proceeds from issuance of common stock">136,000 for the Company. In March 2025, the holder of the Company’s convertible promissory note issued in January 2025 converted an amount of $<span id="xdx_908_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250301__20250331__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zSYguvMdWzIk" title="Partial principal and accrued interest amount">100,000 of partial principal with a conversion price at $6.258 per share into <span id="xdx_902_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20250301__20250331__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zhaVdFdPsJgl" title="Number of shares converted">15,980 ordinary shares of the Company. In April 2025, the Company issued a total of <span id="xdx_90B_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_c20250401__20250430__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--InvestorMember_zvaLVmRMHbAb" title="Number of shares issued">266,667 ordinary shares to certain individual investors at $6.0 per share, which generated $<span id="xdx_90E_eus-gaap--ProceedsFromIssuanceOfCommonStock_c20250401__20250430__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--InvestorMember_z54A9P7L3eBi" title="Proceeds from issuance of common stock">1,600,000 net proceeds for the Company. In April 2025, the holder of the Company’s convertible promissory note issued in January 2025 converted an amount of $<span id="xdx_90E_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250401__20250430__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_z3Y0NpnL8FU9" title="Partial principal and accrued interest amount">100,000 of partial principal with a conversion price at $4.596 per share into <span id="xdx_906_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20250401__20250430__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zTPwg0W2Nux4" title="Number of shares converted">21,758 ordinary shares of the Company. In May 2025, the holder of the Company’s convertible promissory note issued in January 2025 converted an amount of $<span id="xdx_90A_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250501__20250531__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zzW471jJvfIe" title="Partial principal and accrued interest amount">108,500 of partial principal with a conversion price at $4.818 per share into <span id="xdx_90D_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20250501__20250531__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zY5w0zqrOAHg" title="Number of shares converted">22,520 ordinary shares of the Company. In June 2025, the Company issued <span id="xdx_90F_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_c20250601__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--InvestorMember_zmbcgEbfL1P4" title="Number of shares issued">86,000 ordinary shares to an investor at $3.38 per share, which generated net proceeds of $<span id="xdx_907_eus-gaap--ProceedsFromIssuanceOfCommonStock_c20250601__20250630__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--InvestorMember_zIHUuk5OV2fj" title="Proceeds from issuance of common stock">290,680 for the Company. In July 2025, the Company issued <span id="xdx_900_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_c20250701__20250731__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--InvestorMember_zV5PAKWbRbWi" title="Number of shares issued">87,000 ordinary shares to an investor at $3.66 per share, which generated a total of net proceeds of $<span id="xdx_900_eus-gaap--ProceedsFromIssuanceOfCommonStock_c20250701__20250731__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--InvestorMember_zcyvTtMZGera" title="Proceeds from issuance of common stock">318,420 for the Company. In July 2025, the Company issued <span id="xdx_905_eus-gaap--StockIssuedDuringPeriodSharesIssuedForServices_pid_c20250701__20250731__srt--TitleOfIndividualAxis__custom--DirectorsExecutiveOffcersEmployeeMember_zb5t3PG1oZH1" title="Stock issued during period shares issued for services">266,666 ordinary shares with fair value of approximately $<span id="xdx_906_eus-gaap--StockIssuedDuringPeriodValueIssuedForServices_c20250701__20250731__srt--TitleOfIndividualAxis__custom--DirectorsExecutiveOffcersEmployeeMember_zwh2WWKHZoX6" title="Stock issued during period value issued for services">1,355,000 to certain directors, executive officers, and employees as compensations for their services. In July 2025, the holder of the Company’s convertible promissory note issued in January 2025 converted an amount of $<span id="xdx_905_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250701__20250731__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zl5U7ZrjiAt1" title="Partial principal and accrued interest amount">100,000 of partial principal with a conversion price at $3.1209 per share into <span id="xdx_908_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20250701__20250731__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zctjKd4HPiTg" title="Number of shares converted">32,042 ordinary shares of the Company. In August 2025, the holder of the Company’s convertible promissory note issued in January 2025 converted an amount of $<span id="xdx_907_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250801__20250831__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zDzqeZeTKP0l" title="Partial principal and accrued interest amount">100,000 of partial principal with a conversion price at $2.9494 per share into <span id="xdx_90F_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20250801__20250831__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zMb9cSRrIWDh" title="Number of shares converted">33,905 ordinary shares of the Company. In September 2025, the holder of the Company’s convertible promissory note issued in January 2025 converted an amount of $100,000, $<span id="xdx_902_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250901__20250930__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteTwoMember_zeY5GiHzk7u9" title="Partial principal and accrued interest amount">125,000, and $<span id="xdx_905_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20250901__20250930__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteThreeMember_zM14yjPTsOUa" title="Partial principal and accrued interest amount">75,000 of partial principal, into a total of <span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20250901__20250930__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zaGbjxkzK9Tj" title="Number of shares converted">121,637 ordinary shares of the Company, with a conversion price at $2.5066, $2.4602, and $2.4244 per share, respectively. In September 2025, the Company issued <span id="xdx_905_eus-gaap--StockIssuedDuringPeriodSharesNewIssues_pid_c20250901__20250930__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--InvestorMember_zHI9YK7Xmpjb" title="Number of shares issued">120,000 ordinary shares to an investor at $2.5700 per share, which generated a total of net proceeds of $<span id="xdx_901_eus-gaap--ProceedsFromIssuanceOfCommonStock_c20250901__20250930__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__us-gaap--InvestorMember_zZDj0ofqV01b" title="Proceeds from issuance of common stock">308,400 for the Company. In October 2025, the holder of the Company’s convertible promissory note issued in January 2025 converted an amount of approximately $<span id="xdx_903_eus-gaap--StockIssuedDuringPeriodValueConversionOfConvertibleSecurities_c20251001__20251031__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_ztgCHY4aXaLg" title="Partial principal and accrued interest amount">136,000 of partial principal with a conversion price at $2.3898 per share into <span id="xdx_90F_eus-gaap--StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities_c20251001__20251031__us-gaap--ShortTermDebtTypeAxis__custom--ConvertiblePromissoryNoteMember_zQxXqaSDrgE2" title="Number of shares converted">56,930 ordinary shares of the Company. In November 2025, the Company issued <span id="xdx_90A_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_pid_c20251101__20251130__us-gaap--RelatedPartyTransactionsByRelatedPartyAxis__custom--SkyladderGroupLimitedMember_zUGv9B9YRMI5" title="Shares for the acquisition">7,882,921 ordinary shares for the acquisition of Skyladder Group Limited. The fair value of consideration as of the completion date was approximately $7,252,000, determined based on the probability-weighted assessment of achieving the specified revenue and net profit (after tax) targets. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (b) Stock options to employees and directors On May 9, 2016, the Board of Directors of the Company adopted the 2016 Equity Incentive Plan, or the 2016 Plan. Pursuant to the 2016 Plan and its amendment in May 2021, the Company may offer up to five hundred thousand ordinary shares as equity incentives to its directors, employees and consultants. Such number of shares is subject to adjustment in the event of certain reorganizations, mergers, business combinations, recapitalizations, stock splits, stock dividends, or other change in the corporate structure of the Company affecting the issuable shares under the 2016 Plan. The Company accounts for its stock option awards to employees and directors pursuant to the provisions of ASC 718, Compensation – Stock Compensation. The fair value of each option award is estimated on the date of grant using the Black-Scholes Merton valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line attribution method over the service period, which is generally the vesting period. There were <span id="xdx_90E_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_do_c20260101__20260630__srt--TitleOfIndividualAxis__custom--EmployeeMember_zaKujGoSUg4e" title="Stock option granted"><span id="xdx_900_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_do_c20250101__20250630__srt--TitleOfIndividualAxis__custom--EmployeeMember_zf69kBnQVbji" title="Stock option granted">no stock options granted to employees during the six months ended June 30, 2026 and 2025. There was no option exercised during the six months ended June 30, 2026 and 2025. The Company did not receive any proceeds related to the cashless exercise of stock options from employees for the six months ended June 30, 2026 and 2025. As of June 30, 2026 and December 31, 2025, <span id="xdx_905_eus-gaap--EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognized_iI_do_c20260630_zkcG0lrZcvUb" title="Unrecognized compensation expense related to non-vested share options"><span id="xdx_908_eus-gaap--EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognized_iI_do_c20251231_zYpLvy3LCXzb" title="Unrecognized compensation expense related to non-vested share options">no unrecognized compensation expense related to non-vested share options expected to be recognized. (c) Stock options and warrants to non-employees Pursuant to the 2016 Plan and its amendment, for the six months ended June 30, 2026 and 2025, the Company issued <span id="xdx_90A_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_dxL_c20260630__us-gaap--PlanNameAxis__custom--TwoThousandSixteenEquityIncentivePlanMember__srt--TitleOfIndividualAxis__custom--ConsultantsMember_zBjvg7itbKL" title="Warrant issued to consultants::XDX::-">nil and <span id="xdx_90D_eus-gaap--ClassOfWarrantOrRightNumberOfSecuritiesCalledByWarrantsOrRights_iI_dxL_c20250630__us-gaap--PlanNameAxis__custom--TwoThousandSixteenEquityIncentivePlanMember__srt--TitleOfIndividualAxis__custom--ConsultantsMember_zRtpjczN5RIc" title="Warrant issued to consultants::XDX::-">nil warrants to consultants, respectively. The Company expensed to administrative expense approximately $ <span id="xdx_905_eus-gaap--GeneralAndAdministrativeExpense_dxL_c20260101__20260630__us-gaap--PlanNameAxis__custom--TwoThousandSixteenEquityIncentivePlanMember__srt--TitleOfIndividualAxis__custom--ConsultantsMember_zC7ukCZmJ9ic" title="Administrative expense::XDX::-">nil and $ <span id="xdx_90B_eus-gaap--GeneralAndAdministrativeExpense_dxL_c20250101__20250630__us-gaap--PlanNameAxis__custom--TwoThousandSixteenEquityIncentivePlanMember__srt--TitleOfIndividualAxis__custom--ConsultantsMember_zslhc9kuE4Q7" title="Administrative expense::XDX::-">nil for the six months ended June 30, 2026 and 2025, respectively. During the six months ended June 30, 2026, no options or warrants were exercised. As of June 30, 2026 and December 31, 2025, there was no stock options and warrants outstanding and exercisable. TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

100000000

5060000000

5000000000

50000000

10000000

40000

7.947

317880

50000

100000

125000

39741

7.398

7.299

6.483

125000

6.249

20003

16667

8.16

136000

100000

6.258

15980

266667

6.0

1600000

100000

4.596

21758

108500

4.818

22520

86000

3.38

290680

87000

3.66

318420

266666

1355000

100000

3.1209

32042

100000

2.9494

33905

125000

75000

121637

2.5066

2.4602

2.4244

120000

2.5700

308400

136000

2.3898

56930

7882921

7252000

18. CONSOLIDATED SEGMENT DATA Selected information by segment is presented in the following tables for the six months ended June 30, 2026 and 2025. SCHEDULE OF SEGMENT REPORTING <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20260101__20260630_zaGGm5UZ3adk" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49E_20250101__20250630_zChT6v61pZb8" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2025</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold">Revenues (1) </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_hus-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zeCTBbnetTHl" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 56%; text-align: left">TIT Segment (1)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 19%; text-align: right">63,770</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 19%; text-align: right">17,570</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_hus-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zeFzDHLGB2ll" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">CBT Segment (1)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,333,725</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,585,251</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_hus-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zYgTBety7NZd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">SE Segment (1)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">7,481,851</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_zLAfsVdUu237" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Revenues (1)</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">11,879,346</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">17,602,821</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(1)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Revenues by operating segments exclude intercompany transactions.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="font-size: 12pt; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20260101__20260630_zp3Qh5jRvXAk" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Six Months Ended June 30, 2026</td><td style="text-align: center; padding-bottom: 1pt; font-weight: bold"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49E_20250101__20250630_zb4uVasSzOX9" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Six Months Ended June 30, 2025</td><td style="text-align: center; padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-size: 12pt; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; font-weight: bold; text-align: center">(Unaudited)</td><td style="text-align: center; padding-bottom: 1pt; font-weight: bold"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; font-weight: bold; text-align: center">(Unaudited)</td><td style="text-align: center; padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Income (loss) from operations</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--OperatingIncomeLoss_hus-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_z5YtHLzGvOtb" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 60%; text-align: left">TIT Segment</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">(722</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">(12,408</td><td style="width: 1%; text-align: left">)</td></tr> <tr id="xdx_409_eus-gaap--OperatingIncomeLoss_hus-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_z8zRgJeXhlM" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">CBT Segment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,097,859</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(3,603,384</td><td style="text-align: left">)</td></tr> <tr id="xdx_409_eus-gaap--OperatingIncomeLoss_hus-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zH9Sgul8LW6l" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">SE Segment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">283,347</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--OperatingIncomeLoss_hus-gaap--StatementBusinessSegmentsAxis__custom--CorporateAndOthersMember_zjuHWtW7GGa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Corporate and others</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(412,242</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(568,339</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--OperatingIncomeLoss_hus-gaap--StatementBusinessSegmentsAxis__custom--CorporateAndOthersMember_zW4yuKmkx1p8" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Income (loss) from operations </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(412,242</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(568,339</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--OperatingIncomeLoss_zkHSrbFPL6B5" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">(Loss) from operations</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,227,476</td><td style="text-align: left">)</td><td style="font-weight: bold"> </td> <td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: right">(4,184,131</td><td style="font-weight: bold; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--NonoperatingIncomeExpense_zbMH22X7NwQa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">Corporate other income, net</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(19,498</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(8,444</td><td style="text-align: left">)</td></tr> <tr id="xdx_40B_eus-gaap--InvestmentIncomeInterest_z8MJg5lJCZ69" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Corporate interest income</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">147</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">985</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--InterestExpense_iN_di_zBXRHiuFjX5d" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Corporate interest expense</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(233,193</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(467,239</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_403_eus-gaap--InterestExpense_iN_di_zAYrYWvXwgx8" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">(Loss) from operations</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(233,193</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(467,239</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_z26mNGXnmIha" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">(Loss) income before income taxes</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,480,020</td><td style="text-align: left">)</td><td style="font-weight: bold"> </td> <td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: right">(4,658,829</td><td style="font-weight: bold; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--IncomeTaxExpenseBenefit_iN_di_z5WqHc3BYYN2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Income tax expense</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(14,602</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(20,720</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--NetIncomeLoss_zHCTp1cqgGC1" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net (Loss)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(2,494,622</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(4,679,549</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</td></tr> </table> Depreciation and amortization by segment for six months ended June 30, 2026 and 2025 are as follows: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20260101__20260630_zTGSuKkDi6Od" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Six Months Ended June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49E_20250101__20250630_zgGdv6xUxTMj" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Six Months Ended June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; font-weight: bold; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; font-weight: bold; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold">Depreciation:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DepreciationDepletionAndAmortization_hus-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zuuqaqyPvAy" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">TIT Segment</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--DepreciationDepletionAndAmortization_hus-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zjbXyRcWD5ml" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; width: 56%; text-align: left">CBT Segment</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 19%; text-align: right">713,175</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 19%; text-align: right">798,369</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--DepreciationDepletionAndAmortization_hus-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zq7kqFjmWvOd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">SE Segment</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">29,238</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--DepreciationDepletionAndAmortization_z8IhrVdifAD4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Depreciation and amortization</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">742,413</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">798,369</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2025</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 56%; text-align: left">TIT Segment</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_984_eus-gaap--ProvisionForDoubtfulAccounts_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zSR59eGDwkH7" style="width: 19%; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">(2,796</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--ProvisionForDoubtfulAccounts_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zKL9s8POgxye" style="width: 19%; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">(3,536</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">CBT Segment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--ProvisionForDoubtfulAccounts_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zVYAWwfzrsof" style="text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">1,173,184</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--ProvisionForDoubtfulAccounts_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zxZVvtQWj1o2" style="text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">3,996,583</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">SE Segment</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_987_eus-gaap--ProvisionForDoubtfulAccounts_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zNAwt0WjBgma" style="border-bottom: Black 1pt solid; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">(93,090</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98A_eus-gaap--ProvisionForDoubtfulAccounts_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zwV2J6jzlea8" style="border-bottom: Black 1pt solid; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_eus-gaap--ProvisionForDoubtfulAccounts_c20260101__20260630_zlV4DH7VDXo1" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">1,077,298</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_989_eus-gaap--ProvisionForDoubtfulAccounts_c20250101__20250630_zhUmTHXhAYyd" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">3,993,047</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2025</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Inventory obsolescence (reversal) provision:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 56%; text-align: left">TIT Segment</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98A_ecustom--InventoryObsolescenceProvision_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zHFYDL7fu4Vk" style="width: 19%; text-align: right" title="Inventory obsolescence provision">122</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_987_ecustom--InventoryObsolescenceProvision_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zBRYFPtGKrh4" style="width: 19%; text-align: right" title="Inventory obsolescence provision">116</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">CBT Segment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_ecustom--InventoryObsolescenceProvision_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_z9E7yhitNoR2" style="text-align: right" title="Inventory obsolescence provision">31,549</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_ecustom--InventoryObsolescenceProvision_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zsqyFBpnffJi" style="text-align: right" title="Inventory obsolescence provision">(5,052</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">SE Segment</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_ecustom--InventoryObsolescenceProvision_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zSpfh9o3VSBa" style="border-bottom: Black 1pt solid; text-align: right" title="Inventory obsolescence provision">19</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_ecustom--InventoryObsolescenceProvision_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zLmBC2w4OVUi" style="border-bottom: Black 1pt solid; text-align: right" title="Inventory obsolescence provision">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98F_ecustom--InventoryObsolescenceProvision_c20260101__20260630_zEv1UxHhSw51" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Inventory obsolescence provision">31,690</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_ecustom--InventoryObsolescenceProvision_c20250101__20250630_zUYHlcMxCT0d" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Inventory obsolescence provision">(4,936</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</td></tr> </table> Total assets by segment as of June 30, 2026 and December 31, 2025 are as follows: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Total assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 56%; text-align: left">TIT Segment</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--Assets_iI_c20260630__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zs6Kee1ufLii" style="width: 19%; text-align: right" title="Total assets">75,118</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--Assets_iI_c20251231__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zH6IyYVVfy6e" style="width: 19%; text-align: right" title="Total assets">40,950</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">CBT Segment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--Assets_iI_c20260630__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zNwIlNEAbRJl" style="text-align: right" title="Total assets">26,585,291</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--Assets_iI_c20251231__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zpxOxyHc4XF8" style="text-align: right" title="Total assets">27,179,664</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">SE Segment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--Assets_iI_c20260630__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zvlA91z4Teqj" style="text-align: right" title="Total assets">5,837,753</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--Assets_iI_c20251231__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_ztsDyU1WIx44" style="text-align: right" title="Total assets">4,755,802</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Corporate and others</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_980_eus-gaap--Assets_iI_c20260630__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateAndOthersMember_zeh3JBGwd4V" style="border-bottom: Black 1pt solid; text-align: right" title="Total assets">7,353,540</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_eus-gaap--Assets_iI_c20251231__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateAndOthersMember_zp5ib6E4Hr0a" style="border-bottom: Black 1pt solid; text-align: right" title="Total assets">7,471,210</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_eus-gaap--Assets_iI_c20260630_zTupgsJEZsSa" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Total assets">39,851,702</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98E_eus-gaap--Assets_iI_c20251231_zHsSrLFfL4Ak" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Total assets">39,447,626</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Selected information by segment is presented in the following tables for the six months ended June 30, 2026 and 2025. SCHEDULE OF SEGMENT REPORTING <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20260101__20260630_zaGGm5UZ3adk" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49E_20250101__20250630_zChT6v61pZb8" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2025</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold">Revenues (1) </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_hus-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zeCTBbnetTHl" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 56%; text-align: left">TIT Segment (1)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 19%; text-align: right">63,770</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 19%; text-align: right">17,570</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_hus-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zeFzDHLGB2ll" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">CBT Segment (1)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,333,725</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">17,585,251</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_hus-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zYgTBety7NZd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">SE Segment (1)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">7,481,851</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--RevenueFromContractWithCustomerExcludingAssessedTax_zLAfsVdUu237" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Revenues (1)</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">11,879,346</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">17,602,821</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="font: 10pt Times New Roman, Times, Serif; vertical-align: top"> <td style="font: 10pt Times New Roman, Times, Serif; width: 0.25in">(1)</td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Revenues by operating segments exclude intercompany transactions.</td> </tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="font-size: 12pt; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20260101__20260630_zp3Qh5jRvXAk" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Six Months Ended June 30, 2026</td><td style="text-align: center; padding-bottom: 1pt; font-weight: bold"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49E_20250101__20250630_zb4uVasSzOX9" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Six Months Ended June 30, 2025</td><td style="text-align: center; padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-size: 12pt; text-align: center"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; font-weight: bold; text-align: center">(Unaudited)</td><td style="text-align: center; padding-bottom: 1pt; font-weight: bold"> </td><td style="text-align: center; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; font-weight: bold; text-align: center">(Unaudited)</td><td style="text-align: center; padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Income (loss) from operations</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--OperatingIncomeLoss_hus-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_z5YtHLzGvOtb" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 60%; text-align: left">TIT Segment</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">(722</td><td style="width: 1%; text-align: left">)</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 16%; text-align: right">(12,408</td><td style="width: 1%; text-align: left">)</td></tr> <tr id="xdx_409_eus-gaap--OperatingIncomeLoss_hus-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_z8zRgJeXhlM" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">CBT Segment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,097,859</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(3,603,384</td><td style="text-align: left">)</td></tr> <tr id="xdx_409_eus-gaap--OperatingIncomeLoss_hus-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zH9Sgul8LW6l" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">SE Segment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">283,347</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--OperatingIncomeLoss_hus-gaap--StatementBusinessSegmentsAxis__custom--CorporateAndOthersMember_zjuHWtW7GGa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Corporate and others</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(412,242</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(568,339</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--OperatingIncomeLoss_hus-gaap--StatementBusinessSegmentsAxis__custom--CorporateAndOthersMember_zW4yuKmkx1p8" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Income (loss) from operations </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(412,242</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(568,339</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_401_eus-gaap--OperatingIncomeLoss_zkHSrbFPL6B5" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">(Loss) from operations</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,227,476</td><td style="text-align: left">)</td><td style="font-weight: bold"> </td> <td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: right">(4,184,131</td><td style="font-weight: bold; text-align: left">)</td></tr> <tr id="xdx_404_eus-gaap--NonoperatingIncomeExpense_zbMH22X7NwQa" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">Corporate other income, net</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(19,498</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(8,444</td><td style="text-align: left">)</td></tr> <tr id="xdx_40B_eus-gaap--InvestmentIncomeInterest_z8MJg5lJCZ69" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Corporate interest income</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">147</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">985</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--InterestExpense_iN_di_zBXRHiuFjX5d" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Corporate interest expense</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(233,193</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(467,239</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_403_eus-gaap--InterestExpense_iN_di_zAYrYWvXwgx8" style="display: none; vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">(Loss) from operations</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(233,193</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(467,239</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--IncomeLossFromContinuingOperationsBeforeIncomeTaxesExtraordinaryItemsNoncontrollingInterest_z26mNGXnmIha" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">(Loss) income before income taxes</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,480,020</td><td style="text-align: left">)</td><td style="font-weight: bold"> </td> <td style="font-weight: bold; text-align: left"> </td><td style="font-weight: bold; text-align: right">(4,658,829</td><td style="font-weight: bold; text-align: left">)</td></tr> <tr id="xdx_40F_eus-gaap--IncomeTaxExpenseBenefit_iN_di_z5WqHc3BYYN2" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Income tax expense</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(14,602</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(20,720</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_400_eus-gaap--NetIncomeLoss_zHCTp1cqgGC1" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net (Loss)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(2,494,622</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(4,679,549</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</td></tr> </table> Depreciation and amortization by segment for six months ended June 30, 2026 and 2025 are as follows: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_498_20260101__20260630_zTGSuKkDi6Od" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Six Months Ended June 30, 2026</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" id="xdx_49E_20250101__20250630_zgGdv6xUxTMj" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Six Months Ended June 30, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; font-weight: bold; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; font-weight: bold; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold">Depreciation:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--DepreciationDepletionAndAmortization_hus-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zuuqaqyPvAy" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">TIT Segment</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--DepreciationDepletionAndAmortization_hus-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zjbXyRcWD5ml" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; width: 56%; text-align: left">CBT Segment</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 19%; text-align: right">713,175</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 19%; text-align: right">798,369</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--DepreciationDepletionAndAmortization_hus-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zq7kqFjmWvOd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">SE Segment</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">29,238</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_408_eus-gaap--DepreciationDepletionAndAmortization_z8IhrVdifAD4" style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt">Depreciation and amortization</td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">742,413</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">798,369</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> TAOPING INC. NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2025</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 56%; text-align: left">TIT Segment</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_984_eus-gaap--ProvisionForDoubtfulAccounts_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zSR59eGDwkH7" style="width: 19%; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">(2,796</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98C_eus-gaap--ProvisionForDoubtfulAccounts_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zKL9s8POgxye" style="width: 19%; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">(3,536</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">CBT Segment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--ProvisionForDoubtfulAccounts_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zVYAWwfzrsof" style="text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">1,173,184</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--ProvisionForDoubtfulAccounts_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zxZVvtQWj1o2" style="text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">3,996,583</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">SE Segment</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_987_eus-gaap--ProvisionForDoubtfulAccounts_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zNAwt0WjBgma" style="border-bottom: Black 1pt solid; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">(93,090</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98A_eus-gaap--ProvisionForDoubtfulAccounts_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zwV2J6jzlea8" style="border-bottom: Black 1pt solid; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_eus-gaap--ProvisionForDoubtfulAccounts_c20260101__20260630_zlV4DH7VDXo1" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">1,077,298</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_989_eus-gaap--ProvisionForDoubtfulAccounts_c20250101__20250630_zhUmTHXhAYyd" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Provisions for allowance for credit losses on accounts receivable, other receivable and advances to suppliers">3,993,047</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Six Months Ended June 30, 2025</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Inventory obsolescence (reversal) provision:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 56%; text-align: left">TIT Segment</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_98A_ecustom--InventoryObsolescenceProvision_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zHFYDL7fu4Vk" style="width: 19%; text-align: right" title="Inventory obsolescence provision">122</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_987_ecustom--InventoryObsolescenceProvision_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zBRYFPtGKrh4" style="width: 19%; text-align: right" title="Inventory obsolescence provision">116</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">CBT Segment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_ecustom--InventoryObsolescenceProvision_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_z9E7yhitNoR2" style="text-align: right" title="Inventory obsolescence provision">31,549</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_ecustom--InventoryObsolescenceProvision_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zsqyFBpnffJi" style="text-align: right" title="Inventory obsolescence provision">(5,052</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">SE Segment</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_ecustom--InventoryObsolescenceProvision_c20260101__20260630__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zSpfh9o3VSBa" style="border-bottom: Black 1pt solid; text-align: right" title="Inventory obsolescence provision">19</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_989_ecustom--InventoryObsolescenceProvision_c20250101__20250630__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zLmBC2w4OVUi" style="border-bottom: Black 1pt solid; text-align: right" title="Inventory obsolescence provision">-</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98F_ecustom--InventoryObsolescenceProvision_c20260101__20260630_zEv1UxHhSw51" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Inventory obsolescence provision">31,690</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_ecustom--InventoryObsolescenceProvision_c20250101__20250630_zUYHlcMxCT0d" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Inventory obsolescence provision">(4,936</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</td></tr> </table> Total assets by segment as of June 30, 2026 and December 31, 2025 are as follows: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2026</td><td style="padding-bottom: 1pt"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31, 2025</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; text-align: center">(Unaudited)</td><td style="padding-bottom: 1pt"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="padding-bottom: 1pt; font-weight: bold; text-align: center"> </td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; text-align: left">Total assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 56%; text-align: left">TIT Segment</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--Assets_iI_c20260630__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zs6Kee1ufLii" style="width: 19%; text-align: right" title="Total assets">75,118</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--Assets_iI_c20251231__us-gaap--StatementBusinessSegmentsAxis__custom--TITSegmentMember_zH6IyYVVfy6e" style="width: 19%; text-align: right" title="Total assets">40,950</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left">CBT Segment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--Assets_iI_c20260630__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zNwIlNEAbRJl" style="text-align: right" title="Total assets">26,585,291</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--Assets_iI_c20251231__us-gaap--StatementBusinessSegmentsAxis__custom--CBTSegmentMember_zpxOxyHc4XF8" style="text-align: right" title="Total assets">27,179,664</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">SE Segment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--Assets_iI_c20260630__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_zvlA91z4Teqj" style="text-align: right" title="Total assets">5,837,753</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98E_eus-gaap--Assets_iI_c20251231__us-gaap--StatementBusinessSegmentsAxis__custom--SESegmentMember_ztsDyU1WIx44" style="text-align: right" title="Total assets">4,755,802</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Corporate and others</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_980_eus-gaap--Assets_iI_c20260630__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateAndOthersMember_zeh3JBGwd4V" style="border-bottom: Black 1pt solid; text-align: right" title="Total assets">7,353,540</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98B_eus-gaap--Assets_iI_c20251231__us-gaap--StatementBusinessSegmentsAxis__custom--CorporateAndOthersMember_zp5ib6E4Hr0a" style="border-bottom: Black 1pt solid; text-align: right" title="Total assets">7,471,210</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_987_eus-gaap--Assets_iI_c20260630_zTupgsJEZsSa" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Total assets">39,851,702</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td><td style="font-weight: bold; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</td><td id="xdx_98E_eus-gaap--Assets_iI_c20251231_zHsSrLFfL4Ak" style="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right" title="Total assets">39,447,626</td><td style="padding-bottom: 2.5pt; font-weight: bold; text-align: left"> </td></tr> </table>

63770

17570

4333725

17585251

7481851

11879346

17602821

-722

-12408

-2097859

-3603384

283347

-412242

-568339

-412242

-568339

-2227476

-4184131

-19498

-8444

147

985

233193

467239

233193

467239

-2480020

-4658829

14602

20720

-2494622

-4679549

713175

798369

29238

742413

798369

-2796

-3536

1173184

3996583

-93090

1077298

3993047

122 116 31549 -5052 19 31690 -4936

75118

40950

26585291

27179664

5837753

4755802

7353540

7471210

39851702

39447626

19. COMMITMENTS AND CONTINGENCIES The Company may from time to time be subject to legal proceedings, investigations, and claims incidental to conduct of our business. In September 2025, a passenger riding an elevator maintained by our company, Tianjin Weida Elevator Co., Ltd., experienced an abnormal descent after a brake communication malfunction triggered the safety protection mechanism. The plaintiff alleges that our company failed to fulfill its safety obligations and is seeking damages of $12,000. The plaintiff has applied for preservation of the amount in dispute, and a judicial appraisal determined that some injuries were directly caused by the elevator malfunction, while others were not. The Company anticipated an unfavorable outcome from the lawsuit and accrued a provision of $1,500 for probable loss in 2026. The case is pending court acceptance.

12000

1500

20. CONCENTRATIONS For the six months ended June 30, 2026 and 2025, no single customer accounted for greater than <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20260101__20260630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--NoCustomerMember_zXJVdww7hgp8" title="Concentration of risk percentage"><span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--NoCustomerMember_z9uZpFm6xg3g" title="Concentration of risk percentage">10% of total revenues. The Company’s top five customers in aggregate accounted for <span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20260101__20260630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--TopFiveCustomerMember_zTULSejpNW5j">29% and <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--TopFiveCustomerMember_zukC6txUIz8l">29% of the Company’s revenues, for each of the six months ended June 30, 2026 and 2025, respectively. The Company’s top five customers in aggregate accounted for <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20260101__20260630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--TopFiveReceivablesMember_z8JQqAW7zK6g" title="Concentration of risk percentage">21% of total accounts receivable as of June 30, 2026, No single customer accounted for greater than <span id="xdx_90B_eus-gaap--ConcentrationRiskPercentage1_dp_uPure_c20260101__20260630__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--NoCustomerMember_zLbivQ3nQ3M6" title="Concentration of risk percentage">10% of accounts receivable as of June 30, 2026. The Company’s top five customers in aggregate accounted for <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_dp_uPure_c20250101__20251231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--TopFiveCustomersMember_zfXvCWtYwY3l" title="Concentration of risk percentage">26% of total accounts receivable as of December 31, 2025. No single customer accounted for greater than <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_dp_uPure_c20250101__20251231__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--NoCustomerMember_zOvRvTp3jlTk" title="Concentration of risk percentage">10% of accounts receivable as of December 31, 2025. For the six months ended June 30, 2026 and 2025, approximately <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20260101__20260630__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--PurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__custom--SuppliersConcentrationRiskMember__srt--MajorCustomersAxis__custom--FiveUnrelatedSuppliersMember_zteysEj7DVwj" title="Concentration of risk percentage">32% and <span id="xdx_905_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--PurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__custom--SuppliersConcentrationRiskMember__srt--MajorCustomersAxis__custom--FiveUnrelatedSuppliersMember_zsXdoNXzcjL2" title="Concentration of risk percentage">100%, respectively, of total purchases were from five unrelated suppliers. No single supplier accounted for greater than <span id="xdx_905_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20260101__20260630__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--PurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__custom--SuppliersConcentrationRiskMember__srt--MajorCustomersAxis__custom--NoSupplierMember_zDgXwcyJFUrc" title="Concentration of risk percentage">10% of total purchases as of June 30, 2026, and two suppliers each accounted for <span id="xdx_904_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--PurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__custom--SuppliersConcentrationRiskMember__srt--MajorCustomersAxis__custom--SupplierOneMember_zNKwQZJVljFb" title="Concentration of risk percentage">83% and <span id="xdx_90A_eus-gaap--ConcentrationRiskPercentage1_pid_dp_uPure_c20250101__20250630__us-gaap--ConcentrationRiskByBenchmarkAxis__custom--PurchasesMember__us-gaap--ConcentrationRiskByTypeAxis__custom--SuppliersConcentrationRiskMember__srt--MajorCustomersAxis__custom--SupplierTwoMember_zCQEMw1dWqXa" title="Concentration of risk percentage">15%, respectively, of total purchases for the six months ended June 30, 2025.

0.10

0.29

0.21

0.10

0.26

0.10

0.32

0.10

0.83

0.15

21. SUBSEQUENT EVENTS On July 15, 2026, the Company entered into a Securities Purchase Agreement with Streeterville Capital, LLC (“Investor”), pursuant to which the Company issued an unsecured convertible promissory note with a 12-month maturity (the “Convertible Note”) to the Investor. The Convertible Note has the original principal amount of $3,195,000 including the original issue discount of $180,000 and Investor’s legal and other transaction costs of $15,000. Interest accrues on the outstanding balance of the Convertible Note at 7% per annum. Net proceeds received by the Company from this transaction were approximately $3.0 million. On August 31, 2026, the Company dismissed its independent registered public accounting firm, PKF Littlejohn LLP. On August 31, 2026, upon the audit committee’s approval, the Company engaged Li CPA LLC (“Li CPA”) as its new independent registered public accounting firm to audit the Company’s financial statements for the fiscal year ending December 31, 2026.

3195000

180000

15000

0.07

3000000.0

On May 29, 2025, the Company implemented a one-for-thirty reverse stock split of the Company’s issued and outstanding ordinary shares. Except shares authorized, all references to number of shares, and to per share information in the consolidated financial statements have been retroactively restated. On May 29, 2025, the Company implemented a one-for-thirty reverse stock split of the Company’s issued and outstanding ordinary shares. The computation of basic and diluted EPS was retroactively adjusted for all periods presented. On May 29, 2025, the Company implemented a one-for-thirty reverse stock split of the Company’s issued and outstanding ordinary shares. Except shares authorized, all references to number of shares, and to per share information in the consolidated financial statements have been retroactively restated. On May 29, 2025, the Company implemented a one-for-thirty reverse stock split of the Company’s issued and outstanding ordinary shares. The computation of basic and diluted EPS was retroactively adjusted for all periods presented. Detailed information of secured short-term loan balances as of June 30, 2026 and December 31, 2025 were as follows: Unsecured short-term loans are fiduciary bank loans, bearing fixed interest rates, ranging from 3.0% to 3.6%, due within one year. The advances to unrelated parties for business development are non-interest bearing and are due on demand. The advances from unrelated parties are non-interest bearing and due on demand. The other taxes payable were the amounts due to the value added tax, business tax, city maintenance and construction tax, and individual income tax. The amounts due to employees were pertaining to employees’ out-of-pocket expenses for travel and meal allowance, etc. Revenues by operating segments exclude intercompany transactions.