HUHUTECH International Group Inc 6-K, filed Sep 23, 2026
HUHUTECH International Group Inc. (HUHU)
About this 6-K
HUHUTECH International Group Inc filed this 6-K on September 23, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2026
Commission File Number:
(Translation of registrant’s name into English)
3-1208 Tiananzhihui Compound
228 Linghu Road
Xinwu District, Wuxi City, Jiangsu Province
People’s Republic of China 214135
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
HUHUTECH INTERNATIONAL GROUP INC., a Cayman Islands company (the “Company”) is hereby furnishing this report on Form 6-K (the “Report”) to provide the Unaudited Interim Condensed Consolidated Financial Statements of the Company as of and for the six months ended June 30, 2026, and 2025, included as Exhibit 99.1 of this Report, and the Management’s Discussion and Analysis of Financial Condition and Results of Operations as of and for the six months ended June 30, 2026 and 2025, included as Exhibit 99.2 of this Report.
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Unaudited Interim Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2026 and 2025 | |
| 99.2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended June 30, 2026 and 2025 | |
| 99.3 | Press Release - HUHUTECH Reports 8.6% Revenue Growth for First Half of 2026, with New U.S., Germany, and Singapore Operations Contributing $3.7 Million | |
| 101.INS | Inline XBRL Instance Document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: September 22, 2026 | ||
| HUHUTECH INTERNATIONAL GROUP INC. | ||
| By: | /s/ Yujun Xiao | |
| Name: | Yujun Xiao | |
| Title: | Chief Executive Officer | |
2
Exhibit 99.1
HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| As of June 30, |
As of December 31, |
|||||||
| 2026 | 2025 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Short-term investment | ||||||||
| Note receivable | ||||||||
| Accounts receivable, net | ||||||||
| Accounts receivable – a related party | ||||||||
| Inventories | ||||||||
| Advance to vendors | ||||||||
| Prepayments and other assets, net | ||||||||
| Due from related parties | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| Property, plant and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Deferred tax assets | ||||||||
| Right-of-use assets, net | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Short term bank loans | $ | $ | ||||||
| Long-term bank loan - current | ||||||||
| Loan payable from third-party | ||||||||
| Accounts payable | ||||||||
| Due to a related party | ||||||||
| Advance from customers | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Taxes payable | ||||||||
| Operating lease liabilities – current | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| Long term bank loans | ||||||||
| Operating lease liabilities – non-current | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES (Note 13) | ||||||||
| SHAREHOLDERS’ EQUITY: | ||||||||
| Ordinary shares, $ | ||||||||
| Share to be issued | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserves | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| For the Six Months Ended June 30, |
||||||||
| 2026 | 2025 | |||||||
| Revenues – third parties | $ | $ | ||||||
| Revenues – related party | ||||||||
| Total Revenues | ||||||||
| Cost of revenues – third parties | ||||||||
| Cost of revenues – related party | ||||||||
| Total cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling expenses | ||||||||
| General and administrative expenses | ||||||||
| Research and development expenses | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Other expense, net | ||||||||
| Total other expense, net | ( | ) | ( | ) | ||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| (Benefit) provision for income taxes | ( | ) | ||||||
| Net loss | ( | ) | ( | ) | ||||
| Comprehensive (loss) income | ||||||||
| Foreign currency translation adjustments | ( | ) | ||||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| Loss per share | ||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of shares outstanding | ||||||||
| Basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| Ordinary shares | Share to be | Additional paid-in |
Statutory | Accumulated | Accumulated other comprehensive |
Total shareholders’ |
||||||||||||||||||||||||||
| Shares | Amount | issued | capital | reserves | deficit | Loss | equity | |||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | |||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Private placement | ||||||||||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Six Months Ended June 30, |
||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Provision for credit losses | ||||||||
| Deferred tax benefit | ( | ) | ( | ) | ||||
| Amortization of operating lease right-of-use assets | ||||||||
| Loss from disposal of property, plant and equipment | ||||||||
| Share-based compensation | ||||||||
| Fair value change in marketable securities | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Accounts receivable - related party | ( | ) | ||||||
| Notes receivable | ||||||||
| Inventories | ||||||||
| Prepayments and other assets | ( | ) | ( | ) | ||||
| Advance to vendors | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses and other liabilities | ( | ) | ||||||
| Advance from customers | ||||||||
| Taxes payable | ( | ) | ||||||
| Operating leases liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Additions to property, plant, and equipment | ( | ) | ||||||
| Additions to intangible assets | ( | ) | ||||||
| Repayment from short-term investment | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Advances from related parties | ||||||||
| Loan (repayment to) proceeds from third-party | ( | ) | ||||||
| Private placement | ||||||||
| Repayments of bank acceptance notes payable | ( | ) | ||||||
| Proceeds from short-term bank loans | ||||||||
| Repayment of short-term bank loans | ( | ) | ( | ) | ||||
| Proceeds from long-term bank loans | ||||||||
| Repayment of long-term bank loans | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Effect of exchange rate changes on cash and restricted cash | ||||||||
| Net decrease in cash and restricted cash | ( | ) | ( | ) | ||||
| Cash and restricted cash at the beginning of period | ||||||||
| Cash and restricted cash at the end of period | $ | $ | ||||||
| Reconciliation of cash and restricted cash, end of period | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Cash and restricted cash at the end of period | $ | $ | ||||||
| Supplemental cash flow disclosures: | ||||||||
| Cash paid for income tax | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| Non-cash investing activities: | ||||||||
| Right-of-use assets obtained in exchange for operating lease obligations | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION
HUHUTECH International Group Inc. (“HUHUTECH” or the “Company”) is a holding company incorporated under the laws of the Cayman Islands on
Reorganization
A Reorganization of the legal structure was completed on January 14, 2022. The Reorganization involved the incorporations of HUHUTECH International Group Inc., a Cayman Islands holding company; HUHUTECH (HK) Limited (“HUHU HK”), a holding company established in Hong Kong, PRC; Wuxi Xinwu District Jianmeng Electromechanical Technology Co., Ltd (“WFOE”), a company established in the PRC; and the transfer of Jiangsu Huhu Electromechanical Technology Co., Ltd (“HUHU China”), a company established in the PRC, to WFOE.
Before and after the Reorganization, the Company, together with its subsidiaries, are effectively controlled by the same shareholder, who is the Chief Executive Officer (“CEO”) and the Chairman of the Board of Directors of the Company, therefore the reorganization is considered as a recapitalization of entities under common control in accordance with Accounting Standards Codification (“ASC”) 805-50-25. The consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.
Details of the subsidiaries of the Company as of June 30, 2026 are set out below:
| Name of Entity | Date of Incorporation/Acquisition | Jurisdiction of Formation | Percentage of Ownership | Principal Activities | ||||
| HUHUTECH (HK) Limited (“HUHU HK”) | ||||||||
| Wuxi-Xinwu District Jianmeng Electromechanical Technology Co., Ltd (“WFOE”) | ||||||||
| Jiangsu Huhu Electromechanical Technology Co., Ltd. (“HUHU China”) | ||||||||
| Huhu Technology Co., Ltd. (“HUHU Japan”) | ||||||||
| Aspirational Technology Co. (“HUHU USA”) | ||||||||
| Huhu Technologies Deutschland GmbH (HUHU “Deutschland”) | ||||||||
| Huhu Technology Singapore Pte. Ltd (HUHU “Singapore”) |
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The interim results of operations are not necessarily indicative of results to be expected for any other interim period or for a full year. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of its financial position and operating results have been included. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2025 and the notes thereto included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2025, filed with the SEC on April 29, 2026.
Principles of consolidation
The accompanying unaudited condensed consolidated financial statements include the financial statements of HUHUTECH International Group Inc. and its subsidiaries. All inter-company balances and transactions have been eliminated upon consolidation.
F-6
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Uses of estimates
In preparing the unaudited condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements and are adjusted to reflect actual experience when necessary. Significant estimates required to be made by management include, but are not limited to allowance for credit losses, allowance for inventories obsolescence and revenue recognition. Actual results could differ from those estimates.
Cash
Cash comprises cash at banks and on hand.
Restricted cash
Restricted cash consists of amounts which are used as collateral to secure note payable. A note payable is a draft issued by a bank for payments in future, which defers the payment until the due date for redeeming the note. According to the notes payable agreement with the bank,
Short-term investments
The Group’s short-term investments consist of wealth management financial products purchased from SMBC Japan Securities Trading Account. The carrying values of the Group’s short-term investments approximate fair value because of their short-term maturities. The Group recognized loss of $
Notes receivable
Notes receivable are primarily bank acceptance notes. The Company accepts bank acceptance notes from customers for products sold or services performed in the ordinary course of business. Bank acceptance notes are primarily negotiable instruments with cash settlement from commercial banks within half a year. Upon receipt of the bank acceptance notes, the Company’s accounts receivable from the customers is derecognized. The notes receivable amounted to and $
Accounts receivable, net
The Company followed ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): in measurement and recognition of expected credit losses for financial assets held and not accounted for at fair value through net income. Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for credit losses. The Company estimates the allowance for credit losses based on an analysis of the aging of accounts receivable, assessment of collectability, including any known or anticipated economic conditions, customer-specific circumstances, recent payment history and other relevant factors. Allowance for credit losses amounted to $
F-7
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Inventories
Inventories are materials stated at the lower of cost or net realizable value. Costs include purchase price and related shipping costs. The cost of inventories is calculated using the weighted average method. Any excess of the cost over the net realizable value of each item of inventories is recognized as an inventory valuation allowance. Net realizable value is estimated using selling price in the normal course of business less any costs to complete and sell products. As of June 30, 2026 and December 31, 2025, the inventory valuation allowance was .
Advances to vendors
Advance to vendors consists of balances paid to suppliers for technical services and materials that have not been provided or received. Advances to suppliers are short-term in nature and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. In addition, at each reporting date, the Company determines the adequacy of the allowance by evaluating all available information, and then records specific allowances for those advances based on the available facts and circumstances. As of June 30, 2026 and December 31, 2025, the allowance for uncollectible advances to vendors was .
Prepayments and other assets, net
Prepayments and other assets primarily consist of prepaid rents, expenses and deposit, which are presented net of allowance for credit losses. Prepayment and other assets are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. The allowance is also based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections and utilizations. Actual amounts received or utilized may differ from management’s estimate of credit worthiness and the economic environment. Prepayment and other assets are written off against the allowances only after exhaustive collection efforts. The allowance for uncollectible balances amounted to $
Land, property, plant and equipment, net
Land is recorded at cost. Property, plant and equipment are recorded at cost less accumulated depreciation.
| Useful life | |||
| Office equipment | |||
| Transportation equipment | |||
| Building | |||
| Leasehold improvement |
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 is recognized in the consolidated statements of operations and other comprehensive (loss) income in other income or expenses.
F-8
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Intangible assets
Intangible assets consist primarily of the Type Class A license in China in construction and computer software. Type Class A license in construction is valid for five years and subject to renewal. Intangible assets are stated at cost less accumulated amortization.
| License | ||||
| Computer software |
Impairment of long-lived assets
Long-lived assets, including property, plant and equipment and intangible assets with finite lives, are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Company had originally estimated. When these events occur, the Company evaluates the impairment by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. impairment charge was recognized for the six months ended June 30, 2026 and 2025, respectively.
Notes payable
Notes payable are bank acceptance notes issued by financial institutions on the Company’s behalf to vendors with a specific due date usually for a period of within 12 months. These notes can either be endorsed by the vendor to other third parties as payment or can be factored to other financial institutions before maturity date. As collateral security for financial institutions’ undertakings, the Company is required to maintain deposits with such financial institutions as restricted cash amounts of
F-9
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Fair value of financial instruments
U.S. GAAP requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
| ● | Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. |
| ● | Level 3 — inputs to the valuation methodology are unobservable. |
Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, notes receivable, accounts receivable, advances to vendors, prepayments and other assets, accounts payable, accrued expenses and other liabilities, advances from customers, notes payable, due to or from related parties and bank loans, approximates their recorded values due to their short-term maturities. The Company determined that the carrying value of the short-term bank loans approximated their fair value by comparing the stated loan interest rate to the rate charged by similar financial institutions.
Revenue recognition
The Company accounts for revenue recognition under FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company applies the following steps:
Step 1: Identify the contract (s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The Company derives its revenues primarily from three sources: (1) system integration projects; (2) product sales. Contracts with customers do not include cancellation or refund provisions. Payment is generally due within 6 to 12 months of delivery; consequently, the Company has determined that these contracts contain no significant financing components.
Revenue from system integration projects
The Company’s revenues from system integration projects are normally under fixed-price contracts that may last from six months to three years. These contracts require the Company to perform customized services of project planning, system coding, installation of hardware and equipment, and configuration based on the customers’ specific needs which requires significant customization. Upon delivery of the services and equipment, customer acceptance is generally required. In the same contract, the Company is required to provide a warranty period for one to two years (“warranty period”) after the customized project is delivered with a
F-10
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue is recognized over the contract term using an input method under which the percentage of revenue to be recognized for a given project is measured by the estimates of the extent of progress towards project completion. Such contracts provide that the customer accept completion of progress to date and compensate the Company for services rendered, which may be measured in terms of costs incurred, units installed, or some other measure of progress. Application of the input method requires the use of estimates of costs to be incurred for the performance of the contract. Contract costs include all direct material costs, direct labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, and all costs associated with operation of equipment. The contract holdback is recognized as revenue after the warranty period has expired. The warranty holdback amounted to $
Revenue from product sales
The Company generates revenue primarily through the sale and delivery of promised goods to customers and recognizes revenue when control is transferred to customers, which typically occurs upon customer acceptance, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the goods or services and is recorded net of value-added tax (“VAT”). The Company’s contracts with customers are primarily on a fixed-price basis and do not contain cancellable and refund-type provisions. The Company generally provides a one-year warranty against defects in materials related to the sale of products. The Company considerers the warranty as an assurance type warranty since the warranty provides the customer the assurance that the product complies with agreed-upon specifications. Estimated future warranty obligations are included in cost of product sales in the period in which the related revenue is recognized. The determination of the Company’s warranty accrual is based on actual historical experience with the product, estimates of repair and replacement costs and any product warranty problems that are identified after shipment. The Company estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors.
Contract balances
Accounts receivable represents amounts for which the Company has an unconditional right to consideration, including amounts recognized as revenue upon the satisfaction of performance obligations but not yet invoiced. Under the Company’s contractual arrangements, the right to payment becomes unconditional upon the completion of services and customer acceptance. Consequently, the Company had no contract assets as of June 30, 2026 and December 31, 2025.
Unearned revenues consist of payments received from customers related to unsatisfied performance obligations at the end of the period. These balances are recorded as advance from customers. Advance from customers amounted to $
Disaggregation of revenues
For the six months ended June 30, 2026 and 2025,
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| System integration projects | $ | $ | ||||||
| Product sales | ||||||||
| Total | $ | $ | ||||||
F-11
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue by geographic area
The following table presents revenue by geographic location for the six months ended June 30, 2026 and 2025:
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| PRC | $ | $ | ||||||
| Japan | ||||||||
| USA | ||||||||
| Germany | ||||||||
| Singapore | ||||||||
| Total revenues | $ | $ | ||||||
Research and development costs
Research and development activities are directed toward the development of cleaning control system, ultrapure water control system, gas detection system, and temperature automatic control system used in the semiconductor manufacturing process. These costs, which primarily include salaries, contract services and supplies, are expensed as incurred.
Operating leases
The Company has lease contracts for manufacturing facilities and office space under operating leases. The Company determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use assets on its consolidated balance sheets at lease commencement. The Company measures its lease liabilities based on the present value of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The Company estimates its incremental borrowing rate based on an analysis of weighted average interest rate of its own bank loans. The Company measures right-of-use assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Company begins recognizing lease expense when the lessor makes the underlying asset available to the Company.
For leases with lease term less than
Value added tax (“VAT”)
Revenue represents the invoiced value of goods and services, net of VAT in PRC and Germany subsidiaries. The VAT is based on gross sales price and VAT rates range from
Consumption tax
The Japan consumption tax is the difference between the total sales and total purchases and consumption tax rate range from
F-12
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Government grants
Government grants are recognized in “Other income, net” or as a reduction of specific costs and expenses for which the grants are intended to compensate. These amounts are recorded upon receipt, provided all attached conditions have been fulfilled. For the six months ended June 30, 2026 and 2025, the Company received $
Income taxes
Cayman Islands
The Company is incorporated in the Cayman Islands and is not subject to tax on income or capital gains under the laws of the Cayman Islands. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.
Germany
Under German tax laws, HUHU Deutschland is subject to a statutory income tax rate at
USA
HUHU USA is subject to
Singapore
Under Singapore tax laws, subsidiary in Singapore is subject to a statutory income tax rate of
Hong Kong
Under Hong Kong tax laws, HUHU HK is subject to a tax rate of
PRC
Under the Enterprise Income Tax (“EIT”) Law of PRC, domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified
EIT is typically governed by the local tax authority in PRC. Each local tax authority at times may grant preferred tax treatment to local enterprises as a way to encourage entrepreneurship and stimulate local economy. The impact of the tax treatment noted above decreased PRC taxes by for the six months ended June 30, 2026 and 2025. The benefit of the preferred tax treatment on net loss per share (basic and diluted) was for the six months ended June 30, 2026 and 2025.
Japan
The Company’s subsidiary in Japan is mainly subject to Japanese national and local income taxes, inhabitant tax, and enterprise tax, which, in the aggregate, represent a statutory income tax rate of
The Company accounts for income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than
F-13
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Loss per Share
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the six months ended June 30, 2026 and 2025, there were no dilutive shares.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent annual period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.
Share-based compensation
The Company follows the provisions of ASC 718, “Compensation - Stock Compensation,” which establishes the accounting for employee and non-employee share-based awards. For employee share-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award.
Foreign currency translation
The functional currencies of the Company are the local currency of the country in which the subsidiaries operate. The Company’s consolidated financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect on that date. The equity denominated in the functional currencies is translated at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the average translation rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component in accumulated other comprehensive income included in consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement of income and comprehensive income.
Since the Company operates primarily in the PRC, the Company’s main functional currency is the Chinese Yuan (“RMB”). HUHU Japan’s functional currency is the Japanese Yen (“JPY”). The Company’s consolidated financial statements have been translated into the reporting currency of U.S. Dollars (“US$”). The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in the translation.
The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:
| For the Six Months Ended June 30, 2026 | For the Year Ended December 31, 2025 | For the Six Months Ended June 30, 2025 | ||||||||||
| Period End RMB: USD exchange rate | ||||||||||||
| Period Average RMB: USD exchange rate | ||||||||||||
| Period End JPY: USD exchange rate | ||||||||||||
| Period Average JPY: USD exchange rate | ||||||||||||
| Period End EUR: USD exchange rate | ||||||||||||
| Period Average EUR: USD exchange rate | ||||||||||||
| Period End SGD: USD exchange rate | ||||||||||||
| Period Average SGD: USD exchange rate | ||||||||||||
F-14
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Comprehensive loss
Comprehensive loss consists of two components, net loss and other comprehensive (loss) income. Other comprehensive (loss) income refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded from net loss. Other comprehensive (loss) income consists of foreign currency translation adjustments resulting from the Company not using US$ as its functional currency.
Segment reporting
In accordance with ASC Topic 280, Segment Reporting, the Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer. The Company’s CODM reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Company has only
Concentrations of risks
| (a) | Concentration of credit risk |
Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash, accounts receivable and other current assets. The maximum exposure of such assets to credit risk is their carrying amounts as at the balance sheet dates. As of June 30, 2026 and December 31, 2025, the aggregate amount of cash of $
F-15
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
| (b) | Significant customers |
For the six months ended June 30, 2026, three customers accounted for
| (c) | Significant suppliers |
For the six months ended June 30, 2026, two suppliers accounted for approximately
| (d) | Foreign currency risk |
A majority of the Company’s transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.
The Company’s functional currency is the local currency where the subsidiary operates in, mainly RMB and JPY, and the Company’s financial statements are presented in U.S. dollars. It is difficult to predict how market forces and U.S. government policy may impact the exchange rate between the local currencies and the U.S. dollar in the future. The change in the value of the local currencies relative to the U.S. dollar may affect the Company’s financial results reported in the U.S. dollar terms without giving effect to any underlying changes in the Company’s business or results of operations. Currently, the Company’s assets, liabilities, revenues and costs are denominated in RMB and JPY. To the extent that the Company needs to convert U.S. dollars into RMB and JPY for capital expenditures and working capital and other business purposes, appreciation of RMB and JPY against U.S. dollars would have an adverse effect on the RMB and JPY amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB and JPY into U.S. dollars for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollars against RMB and JPY would have a negative effect on the U.S. dollar amount available to the Company.
F-16
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Recent accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.
In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 amends ASC 326, Financial Instruments—Credit Losses, and introduces a practical expedient available for all entities and an accounting policy election available for all entities, other than public business entities, that elect the practical expedient. These changes apply to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue Recognition. Under the practical expedient, entities may assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This simplifies the estimation process for short-term financial assets. ASU 2025-05 is effective for the Group’s annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 should be applied on a prospective basis. The Company does not expect the adoption of this standard will have a material impact on its Consolidated Financial Statements.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities to establish authoritative guidance on the accounting for government grants received by business entities. This update is effective beginning with the Group’s 2029 fiscal year annual reporting period, with early adoption permitted. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements. ASU 2025-12 makes thirty-three incremental improvements to generally accepted accounting principles. ASU 2025-12 is effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact of ASU 2025-12 on its financial statements and related disclosures.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of operations and comprehensive (loss) income and statements of cash flows.
NOTE 3 — ACCOUNTS RECEIVABLE, NET
| June 30, 2026 | December 31, 2025 | |||||||
| Accounts receivable from third-party customers | $ | $ | ||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
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NOTE 3 — ACCOUNTS RECEIVABLE, NET (cont.)
| June 30, 2026 | December 31, 2025 | |||||||
| Accounts receivable from non-state-owned customers | $ | $ | ||||||
| Accounts receivable from state-owned customers | ||||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
Allowance for credit losses movement is as follows:
| June 30, 2026 | December 31, 2025 | |||||||
| Beginning balance | $ | $ | ||||||
| Provision | ||||||||
| Foreign currency translation adjustments | ||||||||
| Ending balance | $ | $ | ||||||
Approximately $
NOTE 4 — INVENTORIES
Inventories consist of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Finished | $ | $ | ||||||
As of June 30, 2026 and December 31, 2025, the Company has made any provision for inventory impairment.
NOTE 5 — PREPAYMENTS AND OTHER ASSETS, NET
Prepayments and other assets consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Prepaid rents | $ | $ | ||||||
| Deposits | ||||||||
| Prepaid expense | ||||||||
| Value-added tax refund and income tax refund | ||||||||
| Less: allowance for uncollectible balances | ( | ) | ( | ) | ||||
| Prepayments and other current assets; net | $ | $ | ||||||
Allowance for credit losses movement is as follows:
| June 30, 2026 | December 31, 2025 | |||||||
| Beginning balance | $ | $ | ||||||
| Foreign currency translation adjustments | ||||||||
| Ending balance | $ | $ | ||||||
F-18
NOTE 6 — LAND, PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment, net, consist of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Building | $ | $ | ||||||
| Office equipment | ||||||||
| Transportation equipment | ||||||||
| Land | ||||||||
| Leasehold improvement | ||||||||
| Subtotal | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation expense for the six months ended June 30, 2026 and 2025 amounted to $
NOTE 7 — INTANGIBLE ASSETS, NET
The Company states intangible assets at cost less accumulated amortization.
| June 30, 2026 | December 31, 2025 | |||||||
| License | $ | $ | ||||||
| Computer software | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
Amortization expenses were $
The estimated future amortization expenses are as follows:
| Six Months ending June 30, | Estimated Amortization Expense | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 and thereafter | ||||
| Total | $ | |||
F-19
NOTE 8 — LEASES
The Company has several operating leases for manufacturing facilities and offices. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The Company adopts Topic 842 using a modified retrospective transition method. The Company combines the lease and non-lease components in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term.
Total lease expense amounted to $
Supplemental balance sheet information related to operating leases was as follows:
| June 30, 2026 | December 31, 2025 | |||||||
| Right-of-use assets, net | $ | $ | ||||||
| Operating lease liabilities – current | $ | $ | ||||||
| Operating lease liabilities – non-current | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of June 30, 2026:
| Remaining lease term and discount rate: | ||||
| Weighted average remaining lease term (years) | ||||
| Weighted average discount rate | % | |||
The following is a schedule of maturities of lease liabilities as of June 30, 2026:
| Six Months ending June 30 | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and thereafter | ||||
| Total future minimum lease payments | $ | |||
| Less: imputed interest | ||||
| Total | $ | |||
F-20
NOTE 9 — ACCRUED EXPENSE AND OTHER LIABILITIES
Accrued expenses and other liabilities consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Payroll payable | $ | $ | ||||||
| Rent payable | ||||||||
| Other payables | ||||||||
| Total | $ | $ | ||||||
NOTE 10 — LOANS
Short-term bank loans
Short-term bank loans represent amounts due to various banks maturing within one year. The principal of the borrowings is due at maturity. Accrued interest is due either monthly or quarterly.
| June 30, 2026 | December 31, 2025 | |||||||
| Bank of Communications | ||||||||
| Interest rate of | $ | $ | ||||||
| Bank of China | ||||||||
| Interest rate of | ||||||||
| Bank of Nanjing | ||||||||
| Interest rate of | ||||||||
| Interest rate of | ||||||||
| Industrial and Commercial Bank of China | ||||||||
| Interest rate of | ||||||||
| Bank of Jiangsu | ||||||||
| Interest rate of | ||||||||
| Total | $ | $ | ||||||
F-21
NOTE 10 — LOANS (cont.)
On June 9, 2025, the Company entered into a loan agreement with the Bank of Nanjing to obtain a loan of $
On July 14, 2025, the Company entered into a loan agreement with the Bank of China to obtain a loan of $
On October 30, 2025, the Company entered into a loan agreement with the Industrial and Commercial Bank of China to obtain a loan of $
On December 23, 2025, the Company entered into a loan agreement with the Bank of Communications to obtain a loan of $
On March 26, 2026, the Company entered into a loan agreement with the Bank of Jiangsu to obtain a loan of $
On June 1, 2026, the Company entered into a loan agreement with the Bank of Nanjing to obtain a loan of $
F-22
NOTE 10 — LOANS (cont.)
Long-term bank loans
Long-term bank loans consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| The Kumamoto Bank | ||||||||
| Interest rate of | $ | $ | ||||||
| Total | ||||||||
| Less: Long-term bank loans - current | ||||||||
| Long-term bank loans - non-current | $ | $ | ||||||
On April 18, 2025, the Company entered into a loan agreement with the Bank of Kumamoto to obtain a loan of $
For the six months ended June 30, 2026 and 2025, the Company recorded bank loan interest expenses of $
NOTE 11 — RELATED PARTIES BALANCES AND TRANSACTIONS
Related party balances as of June 30, 2026 and December 31, 2025, and transactions for the six months ended June 30, 2026 and 2025 are as follows:
| (1) | Related party relationships: |
| Name of Related Party | Relationship to the Company | |
| Mr. Yujun Xiao | ||
| Ms. Yinglai Wang | ||
| Anhui Zhongke Shengwei Intelligent Data Co., Ltd (“Anhui Zhongke”) | ||
| Jiangsu Hephaesi Semiconductor Co., Ltd |
| (2) | Sales of products to a related party: |
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Jiangsu Hephaesi Semiconductor Co., Ltd | $ | $ | ||||||
| (3) | Purchases from a related party: |
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Anhui Zhongke | $ | $ | ||||||
Our affiliated entity Anhui Zhongke and HUHU China entered into a software purchase agreement, whereby Anhui Zhongke sold factory management and monitoring software to HUHU China. The purchase price of the software is $
F-23
NOTE 11 — RELATED PARTIES BALANCES AND TRANSACTIONS (cont.)
| (4) | Accounts receivable-a related party: |
| As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| Jiangsu Hephaesi Semiconductor Co., Ltd | $ | $ | ||||||
The account receivable balance as of June 30, 2026 has been approximately $
| (5) | Due to a related party: |
| As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| Mr. Yujun Xiao | $ | $ | ||||||
Mr. Yujun Xiao made advances to the Company as working capital to support the Company’s operations. The balances are unsecured, interest-free and due upon demand.
| (6) | Due from a related party: |
| As of June 30, | As of December 31, | |||||||
| 2026 | 2025 | |||||||
| Mr. Yujun Xiao | $ | $ | ||||||
The balance represented travel advances issued to Mr. Yujun Xiao, which was later settled and recognized as expense reimbursements.
NOTE 12 — TAXES
Corporate Income Taxes (“CIT”)
The income before taxes by geographic area is as follows:
| Loss before taxes: | For the Six Months Ended June 30, 2026 | For the Six Months Ended June 30, 2025 | ||||||
| China | $ | ( | ) | $ | ( | ) | ||
| Japan | ( | ) | ||||||
| USA | ( | ) | ||||||
| Germany | ( | ) | ( | ) | ||||
| Cayman | ( | ) | ( | ) | ||||
| Singapore | ( | ) | ||||||
| Total loss before taxes | $ | ( | ) | $ | ( | ) | ||
F-24
NOTE 12 — TAXES (cont.)
The components of the income tax provision are as follows:
| For the Six Months Ended June 30, 2026 | For the Six Months Ended June 30, 2025 | |||||||
| Current income tax expense | $ | $ | ||||||
| Deferred income tax expense | ( | ) | ( | ) | ||||
| Total (benefit) provision for income taxes | $ | ( | ) | $ | ||||
The following table reconciles the PRC statutory rate to the Company’s effective tax rate:
| For the Six Months Ended June 30, 2026 | For the Six Months Ended June 30, 2025 | |||||||
| PRC statutory tax rate | % | % | ||||||
| Effect of different tax jurisdiction | ( | )% | ( | )% | ||||
| Non-deductible items* | ( | )% | ( | )% | ||||
| Effective tax rate | % | ( | )% | |||||
| * |
The following table summarizes deferred tax assets and liabilities resulting from differences between financial accounting basis and tax basis of assets and liabilities:
| June 30, 2026 | December 31, 2025 | |||||||
| Deferred tax assets: | ||||||||
| Allowance for credit losses | $ | $ | ||||||
| Net operating losses | ||||||||
| Total deferred tax assets | $ | $ | ||||||
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the cumulative earnings and projected future taxable income in making this assessment. Recovery of substantially all of the Company’s deferred tax assets is dependent upon the generation of future income, exclusive of reversing taxable temporary differences. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets as of June 30, 2026.
Taxes payable
Taxes payable consists of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Income tax payable | $ | $ | ||||||
| VAT payable | ||||||||
| Other taxes payable | ||||||||
| Total taxes payable | $ | $ | ||||||
F-25
NOTE 13 — SHAREHOLDERS’ EQUITY
Ordinary shares
The Company was authorized to issue
The Company believes that the share information should be accounted for on a retroactive basis pursuant to ASC 260. All ordinary shares and per share data for all periods have been retroactively restated accordingly.
Capital contributions
HUHU China was incorporated under the laws of the People’s Republic of China with a total registered capital of approximately $
Initial Public Offering
On October 23, 2024, the Company closed the initial public offering (the “IPO” or the “Offering”) of its
Pursuant to the Underwriting Agreement, the Company also granted the underwriters a
Underwriter’s Warrants
In connection with closing of the IPO on October 23, 2024, the Company granted to the underwriter or its designated affiliates share purchase warrants (“Underwriter’s Warrants”) to purchase a number of Ordinary Shares equal to
On July 15, 2025, the underwriter delivered an exercise notice to the Company for the cashless exercise of
On July 17, 2025, the underwriter delivered an exercise notice to the Company for the cashless exercise of
On September 19, 2025, the underwriter delivered an exercise notice to the Company for the cashless exercise of
Private placement
On May 5, 2026, the Company closed a registered direct offering of (i)
F-26
NOTE 13 — SHAREHOLDERS’ EQUITY (cont.)
Share-based Compensation
On November 28, 2024, the Board of Directors of HUHUTECH International Group Inc. approved and adopted an equity incentive plan (the “2024 Equity Incentive Plan”), which allowed for issuance of up to
On October 23, 2025, the Board of Directors of HUHUTECH International Group Inc. approved and adopted an equity incentive plan (the “2025 Equity Incentive Plan”), which allowed for issuance of up to
Statutory reserve and restricted net assets
As stipulated by relevant PRC laws and regulations, the Company’s subsidiaries and affiliated entities in the PRC must take appropriations from after-tax profits to non-distributive funds. These reserves include the general reserve and the development reserve.
The general reserve requires an annual appropriation of
Because the Company’s operating subsidiaries in the PRC can only pay distributions out of distributable profits reported in accordance with PRC accounting standards, the Company’s operating subsidiaries in the PRC are restricted from transferring a portion of their net assets to the Company. The restricted amounts include the paid-in capital and statutory reserves of the Company’s entities in the PRC. The aggregate amount of paid-in capital and statutory reserves, which represented the amount of net assets of the Company’s operating subsidiaries in the PRC not available for distribution, was $
NOTE 14 — COMMITMENTS AND CONTINGENCIES
Contingencies
From time to time, the Company is subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. As of June 30, 2026 and December 31, 2025, the Company has outstanding litigation.
NOTE 15 — SEGMENT INFORMATION
F-27
NOTE 15 — SEGMENT INFORMATION (cont.)
As a single reportable segment entity, the GAAP measure utilized by the CODM to assess performance and allocate resources is the Group’s consolidated statement of loss. Significant expenses include selling expenses, general and administrative expenses and research and development expenses, which are each separately presented on the Company’s Statements of Income. Other segment items within net income include interest expense.
The following table presents revenue by geographic location for the six months ended June 30, 2026 and 2025:
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| PRC | $ | $ | ||||||
| Japan | ||||||||
| USA | ||||||||
| Germany | ||||||||
| Singapore | ||||||||
| Total revenues | $ | $ | ||||||
NOTE 16 — SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date these unaudited condensed consolidated financial statements were issued and determined that there have been no events that have occurred that would require adjustments to or disclosure in the unaudited condensed consolidated financial statements except for the following:
Bank loans
On August 18, 2026, the Company entered into a loan agreement with the Bank of Communications to obtain a loan of $
F-28
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors.
Overview
We are a holding company incorporated as an exempted company on July 8, 2021 under the laws of the Cayman Islands. As a holding company with no material operations of our own, we conduct substantially all of our operations through HUHU China, HUHU Japan, HUHU USA, HUHU Deutschland and HUHU Singapore. HUHU China, HUHU Japan, HUHU USA, HUHU Deutschland and HUHU Singapore are professional system integration providers to design and implement integrated facility management systems and industrial automation monitoring systems mainly for the optoelectronic, semiconductor, telecom and logistic industries.
The Company currently generates most of its revenues from system integration projects, which represented 84.6% and 95.7% of total revenue for the six months ended June 30, 2026 and 2025, respectively. We also generate revenue from product sales, which represented 15.4% and 4.3% of our revenue for the six months ended June 30, 2026 and 2025, respectively. For the six months ended June 30, 2026 and 2025, our total revenues were approximately $10.7 million and $9.8 million, respectively.
Trends and Key Factors that Affect Operating Results
HUHU China currently derives a majority of its revenues from the system integration projects. Approximately 10% of the integration projects are long-term projects, which mainly include gas monitoring system, heat insulation system and facility monitoring and management system, and 90% are short-term contracts that are mainly supplemental contracts of long-term contracts. HUHU China intends to continually enhance the services and cross-sell new services to existing customers and acquire new customers by increasing market penetration with a deeper market coverage and broader geographical reach. HUHU China’s construction enterprise qualification is first-class and well recognized by clients. Maintaining and enhancing the recognition, image and acceptance of our brand are important to HUHU China’s ability to differentiate our products from and to compete effectively with our peers. Our brand image, however, could be jeopardized if we fail to maintain high product quality, pioneer and keep pace with evolving technology trends, or timely fulfill the orders for our products. If we fail to promote our brand or to maintain or enhance our brand recognition and awareness among our customers, or if we are subject to events or negative allegations affecting our brand image or the publicly perceived position of our brand, our business, results of operations and financial condition could be adversely affected.
HUHU China intends to expand the scope of services to the existing customers and acquire new customers by continually making significant investments in R&D. We plan to use 50% of our proceeds from IPO to construct a 5,000 square meter R&D plant in Xinwu District Wuxi City of Jiangsu Province, PRC and purchase equipment for production of equipment for gas supply systems. For the six months ended June 30, 2026 and 2025 we incurred R&D expense of $206,920 and $520,479, respectively. We will continue to improve upon and expand our production and products offerings through our research and development and technology innovations in order to deliver innovative products. We expect our research and development spending to stay above the amounts from the past years. Our business is closely related to the software and semiconductor industry, which is now experiencing rapid technological changes. Failure to anticipate technology innovations or adapt to such innovations in a timely manner, or at all, may result in our products becoming obsolete at sudden and unpredictable intervals. We monitor a number of financial and non-financial key business metrics to evaluate on a regular basis business and growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies. We believe that some of the most important measures include gross margin, operating margin, net income (loss) as well as the non-financial key metrics discussed below which may differ from other similarly titled metrics used by other companies, securities analysts or investors.
Number of contracts for our system integration projects
We monitor the number of contracts with customers for our system integration projects. The number of contracts will directly impact our results of operations, including revenues and gross margins for the foreseeable future. For the six months ended June 30, 2026, we completed 104 system integration projects, which decreased from 220 projects for the six months ended June 30, 2025.
Average contract price for our system integration projects
We monitor the average contract price for our system integration projects, which impacts our future revenues and gross margins. Our average contract price increased from $42,727 for the six months ended June 30, 2025 to $86,719 for the six months ended June 30, 2026. The average contract price is affected by number of new clients obtained, large contracts completed, and different clients customized needs. It varies across the presented financial periods.
Expansion of our geographic coverage
We believe there is a substantial opportunity to further grow our customer base by continuing to make significant investments in sales, marketing and brand awareness. Our ability to attract new customers will depend on a number of factors, including competitive dynamics in our targeted new geographical markets in Japan. We intend to expand our marketing and sales team with a focus on increasing sales in targeted geographies and customer segments. HUHU Japan started operation in July 2022. For the six months ended June 30, 2026 and 2025, HUHU Japan provided services to 8 and 17 clients, and completed 8 and 155 projects, respectively. For the six months ended June 30, 2026 and 2025, HUHU Japan contributed 18.8% and 60.9% of total revenue, respectively.
Results of Operations
For the six months ended June 30, 2026 and 2025
The following table summarizes the results of our operations for the six months ended June 30, 2026 and 2025, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
| For the six months ended June 30, | ||||||||||||||||
| 2026 | 2025 | Change | % Change | |||||||||||||
| REVENUES: | ||||||||||||||||
| System integration projects | $ | 9,018,758 | $ | 9,400,024 | $ | (381,266 | ) | (4.1 | )% | |||||||
| Product sales | 1,646,508 | 417,448 | 1,229,060 | 294.4 | % | |||||||||||
| Total revenues | 10,665,266 | 9,817,472 | 847,794 | 8.6 | % | |||||||||||
| COST OF REVENUES: | ||||||||||||||||
| System integration projects | 5,932,743 | 6,300,692 | (367,949 | ) | (5.8 | )% | ||||||||||
| Product sales | 1,364,436 | 377,584 | 986,852 | 261.4 | % | |||||||||||
| Total cost of revenues | 7,297,179 | 6,678,276 | 618,903 | 9.3 | % | |||||||||||
| GROSS PROFIT | 3,368,087 | 3,139,196 | 228,891 | 7.3 | % | |||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Selling expenses | 553,441 | 899,367 | (345,926 | ) | (38.5 | )% | ||||||||||
| General and administrative expenses | 19,435,356 | 10,330,446 | 9,104,910 | 88.1 | % | |||||||||||
| Research and development expenses | 206,920 | 520,479 | (313,559 | ) | (60.2 | )% | ||||||||||
| Total operating expenses | 20,195,717 | 11,750,292 | 8,445,425 | 71.9 | % | |||||||||||
| Loss from operations | (16,827,630 | ) | (8,611,096 | ) | (8,216,534 | ) | 95.4 | % | ||||||||
| OTHER INCOME (EXPENSES): | ||||||||||||||||
| Interest income | 14,127 | 6,736 | 7,391 | 109.7 | % | |||||||||||
| Interest expense | (87,511 | ) | (64,246 | ) | (23,265 | ) | 36.2 | % | ||||||||
| Other income, net | 68,973 | 2,051 | 66,922 | 3,262.9 | % | |||||||||||
| Total other expenses, net | (4,411 | ) | (55,459 | ) | 51,048 | (92.0 | )% | |||||||||
| LOSS BEFORE INCOME TAXES | (16,832,041 | ) | (8,666,555 | ) | (8,165,486 | ) | 94.2 | % | ||||||||
| (Benefit) provision for income taxes | (180,361 | ) | 64,686 | (245,047 | ) | (378.8 | )% | |||||||||
| NET LOSS | $ | (16,651,680 | ) | $ | (8,731,241 | ) | $ | (7,920,439 | ) | 90.7 | % | |||||
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Revenues
We derive revenues from two sources: (1) system integration projects, and (2) product sales.
The Company is a professional system integration provider to design and implement integrated facility management systems and industrial automation monitoring systems mainly for optoelectronic, semiconductor, telecom and logistic industries. For the six months ended June 30, 2026, our total revenue was approximately $10.7 million as compared to $9.8 million for the six months ended June 30, 2025. The Company’s total revenue increased by approximately $0.9 million, or 8.6%. The overall increase in total revenue was primarily attributable to a $1.2 million increase in revenue from product sales.
Revenue from system integration projects
The Company’s revenues from system integration projects are normally under fixed-price contracts that may last from six months to three years. Most of our system integration project contracts are short term contracts. Our system integration project contracts require the Company to perform customized services of project planning, system coding, installation of hardware and equipment, and configuration based on customers’ specific needs which requires significant customization. Revenue is recognized over the contract time using an input method under which the percentage of revenue to be recognized for a given project is measured by the estimates of the extent of progress towards project completion.
For the six months ended June 30, 2026, revenue from system integration projects was approximately $9.0 million as compared to $9.4 million, for the six months ended June 30, 2025, representing a decrease of $0.4 million or 4.1%. This decrease was primarily driven by a strategic contraction of our operations in the Japanese market, which was partially offset by our expansion into new markets in the U.S. and Germany. However, projects in these newly entered regions remained in the initial roll-out phase and did not contribute significant volume during the six months ended June 30, 2026. The number of contracts we completed were 104 and 220 for the six months ended June 30, 2026 and 2025, respectively. The average contract price increased from $42,727 for the six months ended June 30, 2025 to $86,719 for the six months ended June 30, 2026.
Revenue from product sales
Revenues from product sales are recognized when delivery has occurred and the customer accepts the equipment and the Company has no performance obligations after the acceptance.
For the six months ended June 30, 2026, our product sales were approximately $1.6 million as compared to $0.4 million for the six months ended June 30, 2025. The increase of product sales revenue was due to increase in product needs along with system integration projects in the six months ended June 30, 2026.
Cost of Revenues
Our cost of revenues mainly consists of outsourcing costs, material costs and compensation expenses for our professionals. Our total cost of revenues increased by approximately $0.6 million or 9.3% from approximately $6.7 million for the six months ended June 30, 2025 to approximately $7.3 million for the six months ended June 30, 2026.
Cost of system integration projects decreased by approximately $0.4 million or 5.8% from approximately $6.3 million for the six months ended June 30, 2025 to approximately $5.9 million for the six months ended June 30, 2026. The decrease was consistent with the decrease of the revenue from system integration projects.
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Cost of product sales increased by approximately $1.0 million from $0.4 million for the six months ended June 30, 2025 to approximately $1.4 million for the six months ended June 30, 2026. The increase was consistent with the increase of the revenue from product sales.
Gross profit
| For the six months ended June 30, | ||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||
| GROSS PROFIT | Gross Profit | Gross Margin | Gross Profit | Gross Margin | Change | % of Change | ||||||||||||||||||
| System integration projects | $ | 3,086,015 | 34.2 | % | $ | 3,099,332 | 33.0 | % | $ | (13,317 | ) | (0.4 | )% | |||||||||||
| Product sales | 282,072 | 17.1 | % | 39,864 | 9.5 | % | 242,208 | 607.6 | % | |||||||||||||||
| Total gross profit | $ | 3,368,087 | 31.6 | % | $ | 3,139,196 | 32.0 | % | $ | 228,891 | 7.3 | % | ||||||||||||
Our gross profit increased by approximately $0.2 million or 7.3% from approximately $3.1 million for the six months ended June 30, 2025 to approximately $3.4 million for the six months ended June 30, 2026. Gross margin as a percentage of overall revenue for the six months ended June 30, 2026 and 2025 was 31.6% and 32.0%, respectively.
Gross profit for system integration projects stayed at approximately $3.1 million for the six months ended June 30, 2026 and 2025. Gross profit margin for the six months ended June 30, 2026 and 2025 was 34.2% and 33.0%, respectively. The decrease of the gross margin for the six months ended June 30, 2026 was a result of reducing engineering outsourcing.
Gross profit for product sales increased from $0.04 million for the six months ended June 30, 2025 to $0.3 million for the six months ended June 30, 2026. Gross profit margin for the six months ended June 30, 2026 and 2025 was 17.1% and 9.5%, respectively. Gross profit margin for product sales depended on the type of hardware customer needed in the process of system integration projects.
Operating Expenses
| For the six months ended June 30, | ||||||||||||||||
| 2026 | 2025 | Change | % Change | |||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Selling expenses | $ | 553,441 | $ | 899,367 | $ | (345,926 | ) | (38.5 | )% | |||||||
| General and administrative expenses | 19,435,356 | 10,330,446 | 9,104,910 | 88.1 | % | |||||||||||
| Research and development expenses | 206,920 | 520,479 | (313,559 | ) | (60.2 | )% | ||||||||||
| Total operating expenses | $ | 20,195,717 | $ | 11,750,292 | $ | 8,445,425 | 71.9 | % | ||||||||
Our operating expenses consist of selling, general and administrative and R&D expenses. Operating expenses increased by approximately $8.4 million or 71.9%, from approximately $11.8 million for the six months ended June 30, 2025 to approximately $20.2 million for the six months ended June 30, 2026. The increase in our operating expenses was primarily due to the increases in general and administrative expenses of approximately $9.1 million.
Selling expenses primarily consisted of promotional fees, advertising expenses, travel, salary and compensation expenses relating to our sales personnel and other expenses relating to our sales activities. Selling expenses decreased by approximately $0.3 million or 38.5% from approximately $0.9 million for the six months ended June 30, 2025 to approximately $0.6 million for the six months ended June 30, 2026 mainly due to a decrease in advertising expenses of approximately $0.4 million, partially offset by an increase in office expenses of approximately $0.1 million.
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General and administrative expenses primarily consisted of salary and compensation expenses relating to our accounting, human resources and executive office personnel, and included rental expenses, depreciation and amortization expenses, office overhead, impairment losses, professional service fees and travel and transportation costs. General and administrative expenses increased by approximately $9.1 million or 88.1% from approximately $10.3 million for the six months ended June 30, 2025 to approximately $19.4 million for the six months ended June 30, 2026. The significant increase in G&A expenses was contributed by (i) an approximately $5.2 million increase in share-based compensation, (ii) an approximately $2.0 million increase in impairment losses, (iii) an approximately $1.8 million increase in consulting and audit fees. On November 28, 2024, the Board of Directors approved and adopted an equity incentive plan (the “2024 Equity Incentive Plan”), which allowed for issuance of up to 2,000,000 Ordinary Shares to employees, non-employee directors, officers and consultants for services rendered to the Company. On January 13, 2025, the Company issued 2,000,000 ordinary shares under 2024 Equity Incentive Plan. The fair value of the shares issued amounted to $8,800,000 based on a $4.4 share price on the approval date. In November 2025, the Board of Directors approved and adopted an equity incentive plan (the “2025 Equity Incentive Plan”), which allowed for issuance of up to 2,300,000 Ordinary Shares to employees, non-employee directors, officers and consultants for services rendered to the Company. On January 13, 2026, the Company issued 1,390,000 ordinary shares under 2025 Equity Incentive Plan. The fair value of the shares issued amounted to $13,872,200 based on a $9.98 share price on the approval date.
R&D expenses primarily consisted of materials, compensation and benefit expenses relating to our R&D personnel as well as office overhead and other expenses relating to our R&D activities. Our R&D expenses decreased by approximately $0.3 million or 60.2% from approximately $0.5 million for the six months ended June 30, 2025 to approximately $0.2 million for the six months ended June 30, 2026, representing 1.9% and 5.3% of our total revenues for the six months ended June 30, 2026 and 2025, respectively. The decrease was due to (i) a decrease of approximately $0.2 million in salary and social welfare expenses due to decreased headcount, and (ii) a decrease of approximately $0.1 million in other expenses.
Other Income (Expense)
Other income (expense) primarily consists of interest income, interest expense and other income. Our net other expense decreased from approximately $55,000 for the six months ended June 30, 2025 to approximately $4,400 for the six months ended June 30, 2026. The change was mainly due to a decrease of approximately $50,000 in exchange loss, an increase of approximately $30,000 in warehouse rent income, partially offset by an increase of approximately $23,000 in interest expense.
Income tax (benefit) provision
Income tax benefit was $180,361 for the six months ended June 30, 2026, compared to an income tax provision of $64,686 for the six months ended June 30, 2025. Under the EIT Law of PRC, domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemptions may be granted on a case-by-case basis. According to PRC tax regulations, 200% of current year R&D expense approved by the local tax authority may be deducted from taxable income since January 1, 2021 and HUHU China obtained the “high-tech enterprise” tax status in June 2023, and renewed in December 2025. The new certificate is valid for three years and expires in December 2028. Under Japanese tax laws, the Company’s subsidiary in Japan is mainly subject to Japanese national and local income taxes, inhabitant tax, and enterprise tax, which, in the aggregate, represent a statutory income tax rate of approximately 31.9% for the six months ended June 30, 2026. Under Germany tax laws, HUHU Deutschland is subject to a statutory income tax rate at 15.825% if revenue is generated in Germany. Under Singapore tax laws, subsidiary in Singapore is subject to statutory income tax rate at 17.0% if revenue is generated in Singapore and there are no withholding taxes in Singapore on remittance of dividends. HUHU USA is subject to 21% federal corporate income tax and a 4.9% Arizona state income tax.
5
Net loss
As a result of reasons and circumstances discussed above, our net loss increased 90.7%, or approximately $7.9 million, from approximately $8.7 million for the six months ended June 30, 2025 to approximately $16.7 million for the six months ended June 30, 2026.
Liquidity and Capital Resources
Substantially all of our operations are conducted in China and Japan. Majority of our revenue, expenses, and cash are denominated in RMB. RMB is subject to the exchange managements regulation in China, and, as a result, we may have difficulty distributing any dividends outside of China due to PRC exchange management regulations on converting RMB into U.S. dollars. As of June 30, 2026, the aggregate amount of cash in banks of $755,784 was held at major financial institutions in the PRC. Cash balances in bank accounts in PRC are insured by the People’s Bank of China Financial Stability Department (“FSD”) where there is a RMB 500,000 (approximately $70,000) deposit insurance limit for a legal entity’s aggregated balance at each bank. As of June 30, 2026, the aggregate amount of cash in banks of $1,882,679 was held at major financial institutions in Japan. Cash balances in bank accounts in Japan are insured pursuant to the Deposit Insurance Act in Japan. Under the Deposit Insurance Act in Japan, the maximum amount of protection is JPY 10 million (approximately $76,000) per customer within one bank. As of June 30, 2026 and December 31, 2025, the Company had $358,151 and $99,572 in bank accounts in USA. Cash balances in bank accounts in USA are insured pursuant to the Federal Deposit Insurance Act. Under the Federal Deposit Insurance Act in USA, the maximum amount of protection is USD 0.25 million per customer within one bank. As of June 30, 2026 and December 31, 2025, the Company had $501,843 and $56,232 in bank accounts in Germany. Cash balances in bank accounts in Germany are insured pursuant to the Einlagensicherungsgesetz (EinSiG). Under the EinSiG in Germany, the maximum amount of protection is EUR 0.1 million (approximately $117,000) per customer within one bank. As of June 30, 2026 and December 31, 2025, the Company had $45,569 and $80,950 in bank accounts in Singapore. Cash balances in bank accounts in Singapore are insured pursuant to the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011. Under the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011 in Singapore, the maximum amount of protection is SGD 0.1 million (approximately $78,000) per customer within one bank. As a result, balance in bank that not covered by Deposit Insurance Act were $2,241,771 and $3,759,538 as of June 30, 2026 and December 31, 2025, respectively.
We have historically funded our working capital needs primarily from operations, bank loans, advance payments from customers and capital contributions from shareholders. As of June 30, 2026, we had working capital of approximately $4.2 million. For the six months ended June 30, 2026, we generated net loss of approximately $16.7 million. The Company’s cash used in operations amounted to approximately $3.4 million for the six months ended June 30, 2026. The working capital requirements are affected by the efficiency of operations, the numerical volume and dollar value of revenue contracts, the progress or execution on customer contracts, and the timing of accounts receivable collections.
In assessing our liquidity, we monitor and analyze our cash on hand, our ability to generate sufficient revenue sources in the future and our operating and capital expenditure commitments. As of June 30, 2026, we had unrestricted cash of approximately $3.6 million. As of June 30, 2026 our bank loan balance was approximately $4.5 million, we expect to renew most of our bank loans based on good credit history.
The Cayman holding company is a holding company with no material operations of its own. We conduct our operations primarily through HUHU China and HUHU Japan. As a result, the Company’s ability to pay dividends depends upon dividends paid by our subsidiaries. HUHU China is permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, our subsidiaries are required to set aside at least 10% of their after-tax profits each year based on PRC accounting standards, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. The statutory reserve funds are not distributable as cash dividends. Remittance of dividends by our subsidiaries out of China is subject to examination by the banks designated by SAFE. Our subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. In addition, we would need to accrue and pay withholding taxes if we were to distribute funds from HUHU China to us. We do not intend to repatriate such funds in the foreseeable future, as we plan to use existing cash balance in PRC for general corporate purposes. When HUHU Japan pays dividends to its parent company in Cayman, it is subject to restrictions under the Japanese Corporate Law.
6
The Company believes that its cash on hand and operating cash flows will be sufficient to fund its operations over at least the next 12 months from the date of this annual report. However, the Company may need additional cash resources in the future if the Company experiences changed business conditions or other developments, and/or access to short term bank loans, and may also need additional cash resources in the future if the Company wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company’s amounts of cash on hand, the Company may seek to issue debt or equity securities or obtain a credit facility.
For the six months ended June 30, 2026 and 2025
The following summarizes the key components of our cash flows for the six months ended June 30, 2026 and 2025:
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (3,356,697 | ) | $ | (523,403 | ) | ||
| Net cash used in investing activities | (56,155 | ) | (98,901 | ) | ||||
| Net cash provided by (used in) financing activities | 2,256,274 | (43,326 | ) | |||||
| Effect of exchange rate change on cash | 5,365 | 378,523 | ||||||
| Net decrease in cash | $ | (1,151,213 | ) | $ | (287,107 | ) | ||
Operating Activities
Net cash used in operating activities was approximately $3.4 million for the six months ended June 30, 2026, which mainly consisted of approximately $16.7 million of net loss, adjustment of $15.8 million non-cash items, and changes in working capital, which primarily comprised of an increase in accounts receivable of approximately $3.5 million due to the increase in revenue, an increase in prepayments and other assets of approximately $0.1 million, a decrease in accounts payables of approximately $1.0 million due to payment of goods, a decrease in operating leases payable of approximately $0.1 million, offset by a decrease in accounts receivable-related party of approximately $0.5 million, a decrease in note receivable of approximately $0.1 million, a decrease in inventories of approximately $0.5 million as the inventory has been used for the engineering project, a decrease in advance to vendors of approximately $0.2 million, an increase in advance from customers of approximately $0.8 million and an increase in taxes payable of approximately $0.3 million.
Net cash used in operating activities was approximately $0.5 million for the six months ended June 30, 2025, which mainly consisted of approximately $8.7 million of net loss, adjustment of $8.9 million non-cash items, and changes in working capital, which primarily comprised of an increase in accounts receivable of approximately $1.4 million and an increase in accounts receivable related party of approximately $0.9 million due to increase in revenue, an increase in advance to vendors of approximately $0.2 million due to more projects, an increase in prepayments and other assets of approximately $0.1 million and a decrease in taxes payable of approximately $0.2 million, offset by an increase in accrued expenses and other liabilities of approximately $0.6 million, an increase in advance from customers of approximately $0.6 million due to more projects, an increase in accounts payables of approximately $0.5 million, a decrease in inventories of approximately $0.2 million and a decrease in note receivable of approximately $0.2 million.
Investing Activities
Net cash used in investing activities was approximately $0.1 million for the six months ended June 30, 2026, mainly consisting of payment for short-term investment.
7
Net cash used in investing activities was approximately $0.1 million for the six months ended June 30, 2025, mainly consisting of purchases of property and equipment.
Financing Activities
Net cash provided by financing activities was approximately $2.3 million for the six months ended June 30, 2026, which consisted of advances from related parties of approximately $0.8 million, proceeds from private placement of approximately $3.0 million and proceeds from bank loans of approximately $1.7 million, offset by repayment to third parties of approximately $0.5 million and repayment of bank loans of approximately $2.8 million.
Net cash used in financing activities was approximately $0.04 million for the six months ended June 30, 2025, which consisted of loan proceeds from a third party of approximately $0.5 million, advances from related parties of approximately $0.3 million and proceeds from bank loans of approximately $7.8 million, offset by repayment of notes payable of approximately $0.6 million and repayment of bank loans of approximately $8.0 million.
Capital Expenditures
The Company made capital expenditures of approximately nil and $0.1 million for the six months ended June 30, 2026 and 2025, respectively. In these periods, our capital expenditures were mainly used for purchases of property, intangible assets and equipment in connection with our expansion in Japan. The Company will continue to make capital expenditures to meet the expected growth of its business.
Off-Balance Sheet Arrangements
There were no off-balance sheet arrangements for the six months ended June 30, 2026 and 2025 that have or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.
8
Research and development, patents and licenses, etc.
See “Item 4. Information on the Company — Research and Development” and “Item 4. Information on the Company — Intellectual Property” of our annual report on Form 20-F for the fiscal year ended December 31, 2025 filed on XXX, 2026.
Trend Information
Other than as described elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information not necessarily to be indicative of future operating results or financial condition.
Critical Accounting Estimates
We prepare our unaudited condensed consolidated financial statements in conformity with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates, judgments, and assumptions that can have a meaningful effect on the reporting of consolidated financial statements. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.
Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. The following descriptions of critical accounting estimates should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes and other disclosures included in this filing.
When reading our unaudited condensed consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include allowance for credit loss, estimate of net realizable value of inventories and estimate of the extent of progress towards project completion in revenue recognition. We believe the following accounting estimates involve the most significant judgments used in the preparation of our unaudited condensed consolidated financial statements.
Allowance for Credit Losses
Effective January 1, 2023, the Company adopted ASC 326, adopting a forward-looking “expected credit loss” model. We estimate the allowance for credit losses by analyzing the aging of accounts receivable, reviewing customer-specific collectability, and incorporating current conditions and reasonable, supportable forecasts regarding future economic environments. Because this assessment requires significant management judgment regarding future customer solvency and macroeconomic trends—factors that can change rapidly—the actual credit losses may differ from our estimates. Although the adoption of this standard did not have a material impact, the valuation of our allowance remains a critical estimate.
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Estimate of Net Realizable Value of Inventories
We value inventories at the lower of weighted average cost or net realizable value (“NRV”). NRV represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. This estimation process requires significant management judgment regarding future market demand, customer preferences, and price competition. We regularly evaluate the carrying value of our inventory by considering factors such as historical sales patterns, current market conditions, and projected future demand. If actual market conditions are less favorable than those projected by management, additional inventory valuation allowances may be required. As of June 30, 2026 and December 31, 2025, our assessment indicated that the NRV exceeded the cost for all inventory items, resulting in a valuation allowance of nil for both periods.
Estimate of the extent of progress towards project completion in revenue recognition
The Company recognizes revenue for system integration projects over time based on the extent of progress toward completion, which requires management to make significant estimates regarding total costs to be incurred under fixed-price contracts. These estimates are developed through a collaborative process involving engineering, project management, and financial personnel, and include projections for direct materials, labor, and applicable indirect costs. Because these projects are highly customized and can span up to three years, the estimation of costs at completion is a critical judgment. Management conducts monthly reviews of project schedules, technical milestones, and performance to update these estimates. Revisions to the estimated total costs are recognized in the period they are identified, and such adjustments may impact the amount of revenue recognized for performance completed in prior periods.
Recently issued accounting pronouncements
A list of recent relevant accounting pronouncements is included in Note 2 “Summary of Principal Accounting Policies” of our unaudited condensed Consolidated Financial Statements.
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Exhibit 99.3
HUHUTECH Reports 8.6% Revenue Growth for First Half of 2026, with New U.S., Germany, and Singapore Operations Contributing $3.7 Million
Three markets opened within the past 18 months accounted for 34.6% of total revenue; average system integration contract value doubled to $86,719
WUXI, China, September 23, 2026 — HUHUTECH International Group Inc. (Nasdaq: HUHU) (“HUHUTECH” or the “Company”), a system integration provider that designs and implements integrated facility management systems and industrial automation monitoring systems for the optoelectronic, semiconductor, telecom, and logistics industries, today reported financial results for the six months ended June 30, 2026. Total revenues increased 8.6% to $10.67 million from $9.82 million in the prior-year period. Operations in the United States, Germany, and Singapore, none of which generated revenue in the first half of 2025, contributed $3.69 million, or 34.6% of total revenue.
The period was the first full reporting half in which HUHUTECH recognized revenue from five countries. Revenue from the PRC grew 29.4% to $4.97 million. That growth, combined with the $3.69 million contributed by the three newest markets, offset a planned contraction in Japan, where revenue declined to $2.01 million from $5.98 million. The Company completed 104 system integration projects during the half, compared with 220 a year earlier, while the average contract price rose to $86,719 from $42,727, reflecting a shift toward fewer, substantially larger engagements.
Net loss for the half was $16.65 million, or $0.68 per basic and diluted share, compared with a net loss of $8.73 million, or $0.38 per share, a year earlier. Non-cash share-based compensation of $13.87 million and a $2.03 million provision for credit losses together accounted for $15.90 million of the reported loss. Excluding those two items, adjusted net loss was $0.75 million for the first half of 2026. See “Non-GAAP Financial Measure” below.
Yujun Xiao, Chief Executive Officer of HUHUTECH, commented:
“Eighteen months ago, every dollar of our revenue came from two countries. This half, five countries contributed, and our three newest markets delivered $3.69 million while still in their initial roll-out phase. We accepted a lower Japan revnue to fund that build-out, and we are now running larger contracts — the average system integration project we completed in the first half was roughly twice the size of a year ago. The expansion carries real cost, and it shows in our operating expenses. It also puts our engineering teams alongside customers in the regions where new semiconductor and optoelectronic capacity is actually being added.”
First Half 2026 Financial Highlights
(Six months ended June 30, 2026, compared with six months ended June 30, 2025)
| ● | Total revenues of $10.67 million, up 8.6% from $9.82 million. | |
| ● | Revenue from the United States, Germany, and Singapore was $3.69 million, compared with nil in the prior-year period. | |
| ● | PRC revenue of $4.97 million, up 29.4% from $3.84 million. | |
| ● | Product sales revenue of $1.65 million, up 294.4% from $0.42 million, and 15.4% of total revenue compared with 4.3%. | |
| ● | Gross profit of $3.37 million, up 7.3% from $3.14 million. Gross margin of 31.6% compared with 32.0%. | |
| ● | Average system integration contract price of $86,719, compared with $42,727. |
| ● | Net loss of $16.65 million, or $0.68 per basic and diluted share, compared with a net loss of $8.73 million, or $0.38 per share. The increase was driven principally by a $5.07 million increase in non-cash share-based compensation and a $2.00 million increase in provisions for credit losses. | |
| ● | Adjusted net loss (non-GAAP) of $0.75 million, compared with adjusted net income of $0.10 million. | |
| ● | Cash of $3.58 million and working capital of $4.20 million as of June 30, 2026. | |
| ● | Gross proceeds of $3.0 million from a registered direct offering completed May 5, 2026. |
Revenue
Total revenues were $10.67 million for the six months ended June 30, 2026, an increase of $0.85 million, or 8.6%, from $9.82 million in the prior-year period. Revenue from system integration projects was $9.02 million, a decrease of $0.38 million, or 4.1%, from $9.40 million, and represented 84.6% of total revenue compared with 95.7% a year earlier. The decline reflects the Company’s deliberate contraction of its Japanese operations, partially offset by initial project activity in the United States and Germany, where engagements remained in the early roll-out stage during the period.
Revenue from product sales was $1.65 million, an increase of $1.23 million, or 294.4%, from $0.42 million. The increase was driven by higher hardware content required within system integration engagements during the half.
Revenue by geography was as follows:
| (US$) | Six
Months Ended June 30, 2026 | Six
Months Ended June 30, 2025 | ||||||
| PRC | 4,967,410 | 3,838,722 | ||||||
| Japan | 2,005,202 | 5,978,750 | ||||||
| United States | 2,785,759 | — | ||||||
| Germany | 782,821 | — | ||||||
| Singapore | 124,074 | — | ||||||
| Total revenues | 10,665,266 | 9,817,472 | ||||||
Gross Profit and Gross Margin
Gross profit was $3.37 million, an increase of $0.23 million, or 7.3%, from $3.14 million. Gross margin was 31.6% compared with 32.0%. Gross profit from system integration projects was essentially unchanged at $3.09 million, with margin improving to 34.2% from 33.0% as the Company reduced its reliance on outsourced engineering. Gross profit from product sales increased to $0.28 million from $0.04 million, with a margin of 17.1% compared with 9.5%, reflecting the mix of hardware required by customers during the period.
Operating Expenses
Total operating expenses were $20.20 million, an increase of $8.45 million, or 71.9%, from $11.75 million.
General and administrative expenses were $19.44 million, an increase of $9.10 million, or 88.1%, from $10.33 million. The increase was attributable principally to a $5.07 million increase in non-cash share-based compensation, a $2.00 million increase in provisions for credit losses, and a $1.80 million increase in consulting and audit fees. On January 13, 2026, the Company issued 1,390,000 ordinary shares under its 2025 Equity Incentive Plan with a fair value of $13.87 million, based on a share price of $9.98 on the approval date. The comparable issuance in the prior-year period was 2,000,000 ordinary shares under the 2024 Equity Incentive Plan with a fair value of $8.80 million.
Selling expenses were $0.55 million, a decrease of $0.35 million, or 38.5%, from $0.90 million, driven primarily by a $0.4 million reduction in advertising expense.
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Research and development expenses were $0.21 million, a decrease of $0.31 million, or 60.2%, from $0.52 million, and represented 1.9% of total revenue compared with 5.3%. The decrease was primarily due to reduced R&D headcount. The Company expects to allocate approximately 50% of its IPO proceeds to the construction of a 5,000-square-meter research and development plant in the Xinwu District of Wuxi City, Jiangsu Province, together with equipment for the production of gas supply systems.
Loss from Operations and Net Loss
Loss from operations was $16.83 million compared with $8.61 million. Total other expense, net, decreased to $4,411 from $55,459, principally reflecting a $50,000 reduction in foreign exchange losses and $30,000 of warehouse rental income, partially offset by a $23,000 increase in interest expense.
The Company recorded an income tax benefit of $180,361 compared with an income tax provision of $64,686 in the prior-year period. HUHU China renewed its “high-tech enterprise” tax status in December 2025; the certificate is valid for three years and expires in December 2028.
Net loss was $16.65 million, or $0.68 per basic and diluted share, compared with a net loss of $8.73 million, or $0.38 per share. Weighted average shares outstanding were 24,621,158 compared with 23,018,717.
Balance Sheet and Liquidity
As of June 30, 2026, the Company held cash of $3.58 million compared with $4.43 million as of December 31, 2025, and had working capital of $4.20 million. Total assets were $22.41 million and total shareholders’ equity was $7.48 million, compared with $22.36 million and $7.42 million, respectively, as of December 31, 2025. Accounts receivable, net, were $10.94 million compared with $9.25 million. Total bank loan balances were approximately $4.5 million, and the Company expects to renew the majority of these facilities.
Net cash used in operating activities was $3.36 million compared with $0.52 million in the prior-year period. Net cash used in investing activities was $0.06 million compared with $0.10 million. Net cash provided by financing activities was $2.26 million compared with net cash used of $0.04 million. It included $3.0 million of gross proceeds from the registered direct offering completed on May 5, 2026, consisting of 400,000 ordinary shares priced at $1.50 per share and pre-funded warrants to purchase up to 1,600,000 ordinary shares.
Subsequent to the end of the period, on August 18, 2026, the Company entered into a loan agreement with the Bank of Communications for $221,073 (RMB 1,500,000), maturing August 18, 2027, at a fixed annual interest rate of 2.20%.
Non-GAAP Financial Measure
In addition to results presented in accordance with U.S. GAAP, this release includes adjusted net loss, a non-GAAP financial measure defined as net loss excluding share-based compensation expense and provisions for credit losses. Management uses this measure to assess operating performance across periods without the effect of items that are non-cash or that do not reflect the current-period operating cost of delivering projects. Adjusted net loss should not be considered in isolation or as a substitute for net loss prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures reported by other companies. A reconciliation to the most directly comparable GAAP measure is presented below.
| (US$) | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | ||||||
| Net loss (GAAP) | (16,651,680 | ) | (8,731,241 | ) | ||||
| Add: Share-based compensation | 13,872,200 | 8,800,000 | ||||||
| Add: Provision for credit losses | 2,027,423 | 30,265 | ||||||
| Adjusted net (loss) income (non-GAAP) | (752,057 | ) | 99,024 | |||||
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About HUHUTECH International Group Inc.
HUHUTECH International Group Inc. (Nasdaq: HUHU) is a professional system integration provider that designs and implements integrated facility management systems and industrial automation monitoring systems for the optoelectronic, semiconductor, telecom, and logistics industries. Through its operating subsidiaries in the People’s Republic of China, Japan, the United States, Germany, and Singapore, the Company delivers customized fixed-price engagements spanning project planning, system coding, hardware installation and configuration, and also supplies related equipment. HUHU China holds a first-class construction enterprise qualification and maintains “high-tech enterprise” tax status in the PRC through December 2028. The Company is headquartered in Wuxi, Jiangsu Province, China. For more information, visit https://ir.huhutech.com.cn.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements regarding the Company’s expectations for its operations in the United States, Germany and Singapore; the anticipated contraction and future contribution of its Japanese operations; expected construction of a research and development plant in Wuxi and the use of IPO proceeds; anticipated renewal of bank facilities; the expected sufficiency of cash on hand and operating cash flows; and anticipated research and development spending. These statements are identified by words such as “expect,” “anticipate,” “believe,” “intend,” “plan,” “will,” and similar expressions.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from those expressed or implied. These factors include, among others, the Company’s ability to secure and complete system integration contracts; customer concentration and the collectability of accounts receivable; competitive conditions in the optoelectronic, semiconductor, telecom and logistics end markets; the pace of customer adoption in newly entered geographies; the Company’s ability to obtain and renew bank financing; currency exchange fluctuations and PRC restrictions on the conversion and remittance of RMB; changes in PRC, Japanese, U.S., German and Singaporean law, taxation and trade policy; and the additional risks described under “Item 3.D. Risk Factors” in the Company’s annual report on Form 20-F filed with the U.S. Securities and Exchange Commission. Copies are available at www.sec.gov. Except as required by law, the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Company Contact
Email: ir@huhutech.com
Website: www.huhutech.com
Investor Relations Contact
Matthew Abenante, IRC
President
Strategic Investor Relations LLC
Phone: +1 (347) 947-2093
Email: matthew@strategic-ir.com
Web: www.strategic-ir.com
(Financial Tables Follow)
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HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollars)
| As of June 30, 2026 | As of December 31, 2025 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 3,577,685 | $ | 4,428,602 | ||||
| Restricted cash | — | 300,296 | ||||||
| Short-term investment | 55,961 | — | ||||||
| Note receivable | — | 86,149 | ||||||
| Accounts receivable, net | 10,935,867 | 9,249,042 | ||||||
| Accounts receivable – a related party | 75,862 | 516,290 | ||||||
| Inventories | 651,413 | 1,103,685 | ||||||
| Advance to vendors | 1,022,219 | 1,215,220 | ||||||
| Prepayments and other assets, net | 410,785 | 295,738 | ||||||
| Due from related parties | — | 2,292 | ||||||
| TOTAL CURRENT ASSETS | 16,729,792 | 17,197,314 | ||||||
| Property, plant and equipment, net | 3,996,244 | 4,277,525 | ||||||
| Intangible assets, net | 23,918 | 45,115 | ||||||
| Deferred tax assets | 1,094,343 | 684,847 | ||||||
| Right-of-use assets, net | 563,209 | 159,685 | ||||||
| TOTAL ASSETS | $ | 22,407,506 | $ | 22,364,486 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Short-term bank loans | $ | 2,577,707 | $ | 3,359,025 | ||||
| Long-term bank loan – current | 109,786 | 230,397 | ||||||
| Loan payable from third party | 500,000 | 500,000 | ||||||
| Accounts payable | 4,442,717 | 5,390,732 | ||||||
| Due to a related party | 403,317 | — | ||||||
| Advance from customers | 2,555,789 | 1,698,526 | ||||||
| Accrued expenses and other liabilities | 793,315 | 801,422 | ||||||
| Taxes payable | 1,167,758 | 884,694 | ||||||
| Operating lease liabilities – current | 205,792 | 142,076 | ||||||
| TOTAL CURRENT LIABILITIES | 12,756,181 | 13,006,872 | ||||||
| Long-term bank loans | 1,811,476 | 1,919,974 | ||||||
| Operating lease liabilities – non-current | 361,763 | 22,582 | ||||||
| TOTAL LIABILITIES | 14,929,420 | 14,949,428 | ||||||
| SHAREHOLDERS’ EQUITY: | ||||||||
| Ordinary shares, $0.0000025 par value; 26,785,848 and 24,103,749 shares issued and outstanding | 66 | 60 | ||||||
| Share to be issued | 1 | — | ||||||
| Additional paid-in capital | 39,922,538 | 23,050,345 | ||||||
| Statutory reserves | 343,077 | 343,077 | ||||||
| Accumulated deficit | (31,969,471 | ) | (15,317,791 | ) | ||||
| Accumulated other comprehensive loss | (818,125 | ) | (660,633 | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY | 7,478,086 | 7,415,058 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 22,407,506 | $ | 22,364,486 | ||||
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HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in U.S. dollars)
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||
| Revenues – third parties | $ | 10,603,305 | $ | 9,337,289 | ||||
| Revenues – related party | 61,961 | 480,183 | ||||||
| Total revenues | 10,665,266 | 9,817,472 | ||||||
| Cost of revenues – third parties | 7,255,457 | 6,533,648 | ||||||
| Cost of revenues – related party | 41,722 | 144,628 | ||||||
| Total cost of revenues | 7,297,179 | 6,678,276 | ||||||
| Gross profit | 3,368,087 | 3,139,196 | ||||||
| Operating expenses: | ||||||||
| Selling expenses | 553,441 | 899,367 | ||||||
| General and administrative expenses | 19,435,356 | 10,330,446 | ||||||
| Research and development expenses | 206,920 | 520,479 | ||||||
| Total operating expenses | 20,195,717 | 11,750,292 | ||||||
| Loss from operations | (16,827,630 | ) | (8,611,096 | ) | ||||
| Other income (expense): | ||||||||
| Interest income | 14,127 | 6,736 | ||||||
| Interest expense | (87,511 | ) | (64,246 | ) | ||||
| Other income, net | 68,973 | 2,051 | ||||||
| Total other expense, net | (4,411 | ) | (55,459 | ) | ||||
| Loss before income taxes | (16,832,041 | ) | (8,666,555 | ) | ||||
| (Benefit) provision for income taxes | (180,361 | ) | 64,686 | |||||
| Net loss | (16,651,680 | ) | (8,731,241 | ) | ||||
| Comprehensive loss: | ||||||||
| Foreign currency translation adjustments | (157,492 | ) | 347,485 | |||||
| Comprehensive loss | $ | (16,809,172 | ) | $ | (8,383,756 | ) | ||
| Loss per share – basic and diluted | $ | (0.68 | ) | $ | (0.38 | ) | ||
| Weighted average shares outstanding – basic and diluted | 24,621,158 | 23,018,717 | ||||||
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HUHUTECH INTERNATIONAL GROUP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollars)
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (16,651,680 | ) | $ | (8,731,241 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 143,137 | 169,951 | ||||||
| Provision for credit losses | 2,027,423 | 30,265 | ||||||
| Deferred tax benefit | (394,377 | ) | (191,703 | ) | ||||
| Amortization of operating lease right-of-use assets | 106,613 | 73,034 | ||||||
| Loss from disposal of property, plant and equipment | 661 | — | ||||||
| Share-based compensation | 13,872,200 | 8,800,000 | ||||||
| Fair value change in marketable securities | 825 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (3,474,539 | ) | (1,375,962 | ) | ||||
| Accounts receivable – related party | 451,116 | (938,394 | ) | |||||
| Notes receivable | 87,789 | 249,223 | ||||||
| Inventories | 476,977 | 211,917 | ||||||
| Prepayments and other assets | (105,905 | ) | (98,286 | ) | ||||
| Advance to vendors | 227,615 | (195,164 | ) | |||||
| Accounts payable | (1,041,866 | ) | 467,452 | |||||
| Accrued expenses and other liabilities | (27,048 | ) | 645,080 | |||||
| Advance from customers | 796,926 | 591,122 | ||||||
| Taxes payable | 254,819 | (157,026 | ) | |||||
| Operating lease liabilities | (107,383 | ) | (73,671 | ) | ||||
| Net cash used in operating activities | (3,356,697 | ) | (523,403 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Additions to property, plant, and equipment | — | (93,665 | ) | |||||
| Additions to intangible assets | — | (5,236 | ) | |||||
| Short-term investment | (56,155 | ) | — | |||||
| Net cash used in investing activities | (56,155 | ) | (98,901 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Advances from related parties | 762,924 | 261,158 | ||||||
| Loan (repayment to) proceeds from third-party | (500,000 | ) | 500,000 | |||||
| Private placement | 3,000,000 | — | ||||||
| Repayments of bank acceptance notes payable | — | (550,559 | ) | |||||
| Proceeds from short-term bank loans | 1,748,659 | 5,403,440 | ||||||
| Repayment of short-term bank loans | (2,622,989 | ) | (7,995,277 | ) | ||||
| Proceeds from long-term bank loans | — | 2,412,000 | ||||||
| Repayment of long-term bank loans | (132,320 | ) | (74,088 | ) | ||||
| Net cash provided by (used in) financing activities | 2,256,274 | (43,326 | ) | |||||
| Effect of exchange rate changes on cash and restricted cash | 5,365 | 378,523 | ||||||
| Net decrease in cash and restricted cash | (1,151,213 | ) | (287,107 | ) | ||||
| Cash and restricted cash at beginning of period | 4,728,898 | 3,323,126 | ||||||
| Cash and restricted cash at end of period | $ | 3,577,685 | $ | 3,036,019 | ||||
# # #
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