| Schedule of Loss Before Income Taxes |
he Company’s loss before income taxes includes the following for the six months ended June 30. | | | 2026 | | | 2025 | | | | | (Unaudited) | | | (Unaudited) | | | Non-PRC operations | | $ | (809,587 | ) | | $ | (445,352 | ) | | PRC operations | | | (665,341 | ) | | | (571,639 | ) | | Total loss before income taxes | | $ | (1,474,928 | ) | | $ | (1,016,991 | ) |
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| Schedule of Deferred Tax Assets and Liabilities |
The cumulative tax effect at the expected rate of 25% of significant items comprising the net deferred tax amount at June 30, 2026 and December 31, 2025 as follows. | | | June 30, 2026 | | | December 31, 2025 | | | | | (Unaudited) | | | | | | Deferred tax assets | | | | | | | | Net operating loss | | $ | 123,134 | | | $ | 60,681 | | | Deferred revenue | | | 15,417 | | | | 17,230 | | | Unbilled cost | | | 475,467 | | | | 461,325 | | | Unbilled interest | | | 39,462 | | | | 38,288 | | | Depreciation | | | 11,486 | | | | 9,373 | | | Software amortization | | | 323,096 | | | | 287,015 | | | Allowance for expected credit losses | | | 367,413 | | | | 232,109 | | | Inventories obsolescence | | | (6,198 | ) | | | (6,509 | ) | | Unrealized losses on trading securities | | | 2,283 | | | | 1,787 | | | Accrued bonus | | | 46,992 | | | | 45,595 | | | Other | | | 50,231 | | | | 48,569 | | | Total deferred tax assets | | | 1,448,783 | | | | 1,195,463 | | | Valuation allowance | | | (76,599 | ) | | | (15,529 | ) | | Total deferred tax assets, net | | | 1,372,184 | | | | 1,179,934 | | | Deferred tax liabilities | | | | | | | | | | Unbilled revenue | | | (2,344,731 | ) | | | (2,264,589 | ) | | Unbilled interest income | | | (459,596 | ) | | | (420,187 | ) | | Deferred government subsidy | | | (43,590 | ) | | | (42,293 | ) | | Unrealized gain on short-term investment | | | (79,545 | ) | | | (60,877 | ) | | Other | | | (3,864 | ) | | | (8,041 | ) | | Total deferred tax liabilities | | | (2,931,326 | ) | | | (2,795,987 | ) | | Deferred tax liabilities, net | | $ | (1,559,142 | ) | | $ | (1,616,053 | ) |
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| Schedule of a Reconciliation of Income Tax Expense |
Following is a reconciliation of income tax expense at the effective rate to income tax at the calculated statutory rates for the six months ended June 30. | | | 2026 | | | 2025 | | | | | (Unaudited) | | | (Unaudited) | | | Loss before income taxes | | $ | (1,474,928 | ) | | | | | | $ | (1,016,991 | ) | | | | | | Statutory tax rate of 25% | | | (368,732 | ) | | | 25.0 | % | | | (254,248 | ) | | | 25.0 | % | | Reconciling items: | | | | | | | | | | | | | | | | | | Tax effect of non-deductible expense | | | 618 | | | | - | % | | | 570 | | | | (0.1 | )% | | Tax effect of PRC preferential tax rates | | | 1,176 | | | | (0.1 | )% | | | 1,293 | | | | (0.1 | )% | | Effect of non-PRC entities not subject to PRC tax | | | 202,164 | | | | (13.7 | )% | | | 111,338 | | | | (10.9 | )% | | Others | | | 59,911 | | | | (4.1 | )% | | | 40,165 | | | | (3.9 | )% | | Income tax benefit | | $ | (104,863 | ) | | | 7.1 | % | | $ | (100,882 | ) | | | 10.0 | % |
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