Mingteng International Corp Inc 6-K, filed Sep 30, 2025
Mingteng International Corp Inc. (MTEN)
About this 6-K
Mingteng International Corp Inc filed this 6-K on September 30, 2025.
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
Commission File Number:
(Translation of registrant’s name into English)
Lvhua Village, Luoshe Town,
Huishan District, Wuxi
Jiangsu Province, China 214189
(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 ☐
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
A copy of the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended June 30, 2025 and 2024 is furnished as Exhibit 99.1, and a copy of the Interim Financial Statements is furnished as Exhibit 99.2 to this report on Form 6-K.
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EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Six Months Ended June 30, 2025 and 2024 | |
| 99.2 | Unaudited Interim Condensed Consolidated Financial Statements for the Six Months ended June 30, 2025 and 2024 | |
| 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). |
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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 30, 2025 | Mingteng International Corporation Inc. | |
| By: | /s/ Yingkai Xu | |
| Name: | Yingkai Xu | |
| Title: | Chief Executive Officer | |
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Exhibit 99.1
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes thereto. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many important factors, our actual results and the timing of events may differ materially from those anticipated in these forward-looking statements. All amounts included herein with respect to the six months ended June 30, 2025 and 2024 are derived from our unaudited interim condensed consolidated financial statements in this filing. Our financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.
Overview
We are a holding company incorporated in the Cayman Islands with operations conducted in China by our PRC subsidiary, Wuxi Mingteng Mould, incorporated in the PRC. We are an automotive mold developer and supplier in China. Wuxi Mingteng Mould was established in December 2015, focusing on molds used in auto parts. We are committed to providing customers with comprehensive and personalized mold services, covering mold design and development, mold production, assembly, testing, repair and after-sales service.
We provide a wide variety of products. Our main products are casting molds for turbocharger systems, braking systems, steering and differential system, and other automotive system parts.
We also produce molds for new energy electric vehicle motor drive systems, battery pack systems, and engineering hydraulic components, which are widely used in automobiles, construction machinery and other manufacturing industries.
Our production plant is located in Wuxi, China. We use technologically advanced procedures and equipment to produce molds. We use a mold manufacturing processing center, which allocates different machines to manufacture according to the size of the mold and the shape of the accessories. Our mold development and production process are supported by our research and development (“R&D”) team (including experts such as foundry technologists and mold designers), using advanced Computer Aided Design (“CAD”), Computer Aided Manufacturing (“CAM”) and software technologies to analyze feasibility and validity of mold designs and specifications. Our quality and capability have obtained the 2019 Jiangsu High-tech Enterprise Certification and ISO9001:2015 certification.
In order to improve our technical level and service quality, we are committed to developing and producing molds through technological innovation. We believe that the design and quality of our molds are extremely important to the accuracy and efficiency of our customers’ manufacturing processes. Our existing technical team consists of 31people, all with professional knowledge in casting, machining, and automation. They analyze customers’ casting and processing technology, propose solutions and improvement suggestions to customers to enhance the efficiency and safety of their products. In addition, we believe our research and patents in the field of automotive casting molds have earned us recognition from our customers, and we have registered 21 authorized utility model and invention patents in China.
We are a supplier to a number of Chinese listed companies and have established long-term business relationships with leading major customers in the automobile parts manufacturing industry, most of whom have more than 5 years of business relationship with us. Our customers include Kehua Holding Co., Ltd. (ticker: 603161), Wuxi Lihu Booster Technology Co., Ltd. (ticker: 300580), and Wuxi Best Precision Machinery Co., Ltd. (ticker: 300694). Our close relationships with these major customers demonstrate our strengths in technical capabilities, service reputation and product quality.
Our revenue mainly comes from customized mold production, mold repair and machining services. The revenue derived from customized mold production accounted for 69.1% and 71.3% of our total revenue for the six months ended June 30, 2025 and 2024, respectively. The revenue derived from mold repair accounted for 9.3% and 11.1% of our total revenue for the six months ended June 30, 2025 and 2024, respectively. The revenue derived from machining services accounted for 21.6% and 17.6% of our total revenue for the six months ended June 30, 2025 and 2024, respectively.
Our organization
The following chart shows our current corporate structure:
Mingteng International was incorporated under the laws of the Cayman Islands on September 20, 2021, as an exempt company with limited liability.
Mingteng International owns a 100% equity interest in Mingteng HK, an entity incorporated on November 4, 2021, in accordance with the laws and regulations in Hong Kong. Mingteng HK is a holding company and is not actively engaged in any business.
Ningteng WFOE was incorporated on September 6, 2022, under the laws of the PRC. Ningteng WOFE is a wholly owned subsidiary of Mingteng HK and is not actively engaged in any business.
Wuxi Mingteng Mould is a limited liability company incorporated on December 15, 2015, under the laws of the PRC. Wuxi Mingteng Mould is a wholly owned subsidiary of Ningteng WFOE and is our operating entity. Wuxi Mingteng Mould is primarily engaged in providing clients with comprehensive and personalized mold services and solutions in the PRC, including mold design and development; mold production, repair, testing and adjustment.
Factors Affecting Our Results of Operations
Changes in the availability, quality and cost of key raw materials, transportation and other necessary supplies or services
Our raw materials consist primarily of steel plates and casting. The cost of raw materials represents a significant portion of our total cost of revenues.
Raw material costs represent 23.5% and 30.03% of our total cost of revenues for the six months ended June 30, 2025 and 2024, respectively.
We are exposed to fluctuations in the prices of raw materials, transportation, and other necessary supplies or services due to factors beyond our control, such as policies, inflation, and changes in the supply and demand for such relevant raw materials. We may not be able to offset the price increases by increasing our product prices, in which case our margins would decline, and our financial condition and results of operations could be materially and adversely affected. In addition, if we significantly increase the prices of our products, we may lose our competitive advantage. This in turn could result in a loss of sales and customers. In either case, our business, financial condition, and results of operations could be materially and adversely affected.
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Our business is dependent on certain major customers and changes or difficulties in our relationships with our major customers may harm our business and financial results.
For the six months ended June 30, 2025 and 2024, ten major customers accounted for approximately 80.32% and 77.8% of our total sales, respectively. Any decrease in sales to these major customers may negatively impact on our operations and cash flows if we fail to increase its sales to other customers.
As of June 30, 2025 and December 31, 2024, ten major customers accounted for approximately 60.3% and 83.5% of our accounts receivable balance, respectively.
If we cannot maintain long-term relationships with our major customers or replace major customers from period to period with equivalent customers, the loss may negatively impact our business, financial condition, and results of operations. If our customer base decreases, we may not be able to generate sufficient revenue to cover our increased costs and expenses. As a result, our business and results of operations may be materially and adversely affected.
Our business is related to the development of upstream and downstream industries.
Mold production is closely related to the development of upstream and downstream industries. With the gradual saturation of the Chinese automotive market, the production of molds related to auto parts may be affected.
Results of Operations
Comparison of Results of Operations for the Six Months Ended June 30, 2025 and 2024
The following table summarizes our results of unaudited operations for the six months ended June 30, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
(UNAUDITED)
| For the Six Months Ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||
| Amount | % of revenue | Amount | % of revenue | Amount | % | |||||||||||||||||||
| Revenues | $ | 5,261,469 | 100.0 | % | $ | 4,646,389 | 100.0 | % | $ | 615,080 | 13.2 | % | ||||||||||||
| Cost of revenues | (3,793,049 | ) | (72.1 | )% | (2,994,601 | ) | (64.5 | )% | (798,448 | ) | 26.7 | % | ||||||||||||
| Gross profit | 1,468,420 | 27.9 | % | 1,651,788 | 35.5 | % | (183,368 | ) | 11.1 | % | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Selling expenses | 53,764 | 1.0 | % | 125,535 | 2.7 | % | (71,771 | ) | (57.2 | )% | ||||||||||||||
| General and administrative expenses | 1,003,686 | 19.1 | % | 1,512,909 | 32.6 | % | (509,223 | ) | (33.7 | )% | ||||||||||||||
| Research and development expenses | 409,623 | 7.8 | % | 288,182 | 6.2 | % | 121,441 | 42.1 | % | |||||||||||||||
| Total operating expenses | 1,467,073 | 27.9 | % | 1,926,626 | 41.5 | % | (459,553 | ) | (23.9 | )% | ||||||||||||||
| (Loss)income from operations | 1,347 | 0.0 | % | (274,838 | ) | (5.9 | )% | 276,185 | (100.5 | )% | ||||||||||||||
| Other income (expenses): | ||||||||||||||||||||||||
| Government subsidies | 64,728 | 1.2 | % | - | - | % | 64,728 | 0 | % | |||||||||||||||
| Interest income | 688 | 0.0 | % | 579 | 0.0 | % | 109 | 18.8 | % | |||||||||||||||
| Interest expense | (22,518 | ) | (0.4 | )% | (15,749 | ) | (0.3 | )% | (6,769 | ) | 43.0 | % | ||||||||||||
| Other-than-temporary impairment | (1,356,618 | ) | (25.8 | )% | - | - | (1,356,618 | ) | 0 | % | ||||||||||||||
| Other income, net | 16,812 | 0.3 | % | 16,618 | 0.4 | % | 194 | 1.2 | % | |||||||||||||||
| Total other income(expenses), net | (1,296,908 | ) | (24.6 | )% | 1,448 | (0.0 | )% | (1,298,356 | ) | (89,665.5 | )% | |||||||||||||
| Loss before income taxes | (1,295,561 | ) | (24.6 | )% | (273,390 | ) | (5.9 | )% | (1,022,171 | ) | 373.9 | % | ||||||||||||
| (Provision for) /benefit from income taxes | (61,212 | ) | (1.2 | )% | 7,548 | 0.2 | % | (68,760 | ) | (911.0 | )% | |||||||||||||
| Net loss | $ | (1,356,773 | ) | (25.8 | )% | $ | (265,842 | ) | $ | (5.7 | )% | $ | (1,090,931 | ) | 410.4 | % | ||||||||
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Revenue
Currently, we have three revenue streams: mold production, mold repair and machining services.
Total revenue for the six months ended June 30, 2025 increased by $615,080, or 13.2%, to $5,261,469 from $4,646,389 for the same period in 2024. After consideration of the impact of rising exchange rates, total revenue increased by 14.5% or $4.8 million in RMB base currency.
The following table sets forth the breakdown of our unaudited revenue for the six months ended June 30, 2025 and 2024, respectively:
(UNAUDITED)
| For the Six Months Ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| Mold production | $ | 3,634,475 | 69.1 | % | $ | 3,312,007 | 71.3 | % | $ | 322,468 | 9.7 | % | ||||||||||||
| Mold repair | 491,454 | 9.3 | % | 518,300 | 11.1 | % | (26,846 | ) | (5.2 | )% | ||||||||||||||
| Machining services | 1,135,540 | 21.6 | % | 816,082 | 17.6 | % | 319,458 | 39.1 | % | |||||||||||||||
| Total | $ | 5,261,469 | 100.0 | % | $ | 4,646,389 | 100.0 | % | $ | 615,080 | 13.2 | % | ||||||||||||
Revenues from mold production. Revenues from mold production accounted for 69.1% and 71.3% of our total revenues for the six months ended June 30, 2025 and 2024, respectively. Revenue from mold production increased by $322,468, or 9.7% from $3,312,007 for the six months ended June 30, 2024 to $3,634,475 for the same period in 2025. This indicates that Wuxi Mingteng Mold maintains long-term relationships with major customers and continues to open up the mold market in the fiscal year 2025.
Revenues from mold repair. Revenues from mold repair accounted for 9.3% and 11.1% of our total revenues for the six months ended June 30, 2025 and 2024, respectively. Revenues from mold repair only decreased by $26,846, or 5.2% from $518,300 for the six months ended June 30, 2024 to $491,454 for the same period in 2025. The decrease in sales revenue for the six months ended June 30, 2025 is attributable to an economic downturn in the market, compelling us to maintain its business by reducing prices.
Revenues from machining services. Revenues from machining services accounted for 21.6% and 17.6% of our total revenues for the six months ended June 30, 2025 and 2024, respectively. Revenues from machining services have significantly increased by $319,458, or 39.1% from $816,082. For the six months ended June 30, 2024, the Company commenced a new machining business operation, which requires the supply of raw materials. The complexity of this operation contributed to an increase in revenue.
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Cost of Revenues
The following table sets forth the breakdown of our unaudited cost of revenue for the six months ended June 30, 2025 and 2024, respectively:
(UNAUDITED)
| For the Six Months Ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| Mold production | $ | 2,704,880 | 71.3 | % | $ | 2,191,494 | 73.2 | % | $ | 513,386 | 23.4 | % | ||||||||||||
| Mold repair | 215,256 | 5.7 | % | 207,768 | 6.9 | % | 7,488 | 3.6 | % | |||||||||||||||
| Machining services | 872,913 | 23.0 | % | 595,339 | 19.9 | % | 277,574 | 46.6 | % | |||||||||||||||
| Total | $ | 3,793,049 | 100.0 | % | $ | 2,994,601 | 100.0 | % | $ | 798,448 | 26.7 | % | ||||||||||||
The cost of revenues increased by $798,448, or 26.7%, to $3,793,049 for the six months ended June 30, 2025, from $2,994,601 for the same period in 2024, which was mainly due to the increase in outside processing services, labor cost and manufacturing costs.
The total revenue has increased by 13.2%, but the total cost of revenue has increased by 26.7%, the reasons for the cost increase much more than revenue are as follows:
Firstly, the increase in material costs. Due to the change in the sales model for machining services for the six months ended June 30, 2025, we now provide the processing materials, which has resulted in an additional material cost of $163,642 compared for the same period in 2024.
Secondly, the headcount of production workers increased from 124 to 136 for the six months ended June 30, 2025, with the average monthly wage also rising by $124 per person. Labor costs have increased overall $112,089 compared for the same period in 2024.
Lastly, the customized nature of the products led to more complex manufacturing techniques, which extended the processing time and consequently increased direct processing costs by $493,423 for the six months ended June 30, 2025.
Gross Profit
Total gross profit was $1,468,420 for the six months ended June 30, 2025, a decrease of $183,368 from $1,651,788 for the same period in 2024. Gross profit margin declined by 7.6%, to 27.9% or the six months ended June 30, 2025, from 35.5% for the same period in 2024.
Our gross profit and gross profit margin by product types were as follows:
(UNAUDITED)
| For the Six Months Ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||
| Gross profit |
Margin % |
Gross profit |
Margin % |
Amount | % | |||||||||||||||||||
| Mold production | $ | 929,595 | 25.6 | % | $ | 1,120,513 | 33.8 | % | $ | (190,918 | ) | (17.0 | )% | |||||||||||
| Mold repair | 276,198 | 56.2 | % | 310,532 | 59.9 | % | (34,334 | ) | (11.1 | )% | ||||||||||||||
| Machining services | 262,627 | 23.1 | % | 220,743 | 27.0 | % | 41,884 | 19.0 | % | |||||||||||||||
| Total | $ | 1,468,420 | 27.9 | % | $ | 1,651,788 | 35.5 | % | $ | (183,368 | ) | (11.1 | )% | |||||||||||
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Gross profit for mold production decreased by $190,918 to $929,595 for the six months ended June 30, 2025, as compared to $1,120,513 for the same period in 2024. The manufacturing costs, labor costs and the depreciation expense collocated to cost of sales all increased due to expanded production scale, which resulted in increase in total cost of sales. Costs increased at a greater rate than the increase in revenue for the six months ended June 30, 2025 compared with the same period in 2024, which led to the decrease in gross profit and gross profit margin. Mold production is the main source of revenue of us, due to an increase in order volume in the first half of 2025 compared to the first half of 2024, the total cost of sales increased by 23.4%. Due to a significant purchase of fixed assets in 2024, depreciation expenses rose substantially. On the other hand, the hiring of 11 new production workers in the first half of 2025 led to an increase in overall costs. However, faced with intensified competition in the mold production industry, the Company chose not to raise its product prices to maintain its competitive advantage. Consequently, this decision resulted in a decline in gross profit.
Gross profit for mold repair decreased by $34,334 to $276,198 for the six months ended June 30, 2025, as compared to $310,532 for the same period in 2024. The gross profit margin decreased by 11.1% for the six months ended June 30, 2025 to 56.2% from 59.9% for the same period in 2024, similar to the mold production, the mold repair is also sensitive to market fluctuations. We have maintained competitive pricing to preserve market share, however, rising fixed costs from have contributed to a contraction in gross margin.
Gross profit for machining services increased by $41,884 to $262,627 for the six months ended June 30, 2025, as compared to $220,743 for the same period in 2024, which was attributable to the change in the sales model and the growth in revenue for the six months ended June 30, 2025, However, the adoption of this new business model entails greater operational costs. The inferior gross margin profile of the new business compared to the legacy operations has led to a dilution of the overall gross profit.
Operating Expenses
(UNAUDITED)
| For the Six Months Ended June 30, | ||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | |||||||||||||||||||
| Selling expenses | $ | 53,764 | 3.7 | % | $ | 125,535 | 6.5 | % | $ | (71,771 | ) | (57.2 | )% | |||||||||||
| General and administrative expenses | 1,003,686 | 68.4 | % | 1,512,909 | 78.5 | % | (509,223 | ) | (33.7 | )% | ||||||||||||||
| Research and development expenses | 409,623 | 27.9 | % | 288,182 | 15.0 | % | 121,441 | 42.1 | % | |||||||||||||||
| Total operating expenses | $ | 1,467,073 | 100.0 | % | $ | 1,926,626 | 100.0 | % | $ | (459,553 | ) | (23.9 | )% | |||||||||||
Selling Expenses
Selling expenses were $53,764 for the six months ended June 30, 2025, a decrease of $71,771, or 57.2%, from $125,535 for the same period in 2024. This decrease was primarily due to lower promotion and publicity expenses.
General and Administrative Expenses
Our general and administrative expenses were $1,003,686 for the six months ended June 30, 2025, a decrease of $509,223 or 33.7%, from $1,512,909 for the same period in 2024. The decrease was mainly due to the decrease of consulting and professional fee for the six months ended June 30, 2025 by $631,872 compared with the same period in 2024, We paid large amount of consulting and professional fees for the Initial Public Offering(“IPO”) in April 2024, while such decrease was partially offset by the increase in the staff costs by $91,911 due to the increased number of employees.
Research and Development Expenses
Research and development expenses increased by $121,441, or 42.1%, to $409,623 for the six months ended June 30, 2025, from $288,182 for the same period in 2024. This increase is mainly attributable to, a) increase in labor expenses by $118,914 for the six months ended 2025 due to the increased number of employees involved in R&D work and the increase in average salary; b) increase in the depreciation expense increased by $1,365 for the six months ended June 30, 2025 compared with the same period in 2024.
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Other income
Government subsidies
We received various government subsidies from time to time, such as the “The High-Tech Enterprise Cultivation Award”, and we cannot predict the likelihood or amount of any future subsidies.
For the six months ended June 30, 2025, government subsidies were $64,728. For the same period in 2024, no government subsidies was received.
Interest income
For the six months ended June 30, 2025, interest income was $688, increased by $109 as compared with the same period in 2024. This is mainly due to the increase in average bank deposits during the six months ended June 30, 2025 compared to the same period in 2024.
Interest expense
For the six months ended June 30, 2025, interest expense was $22,518. For the same period in 2024, interest expense was $15,749, and the increase of $6,769 was mainly due to the increase in average bank loans for the six months ended June 30, 2025 compared with the same period in 2024.
Other-than-temporary impairment
For the six months ended June 30, 2025, we recorded an other-than-temporary impairment of $1,356,618, compared to nil for the same period in 2024. This impairment was due to the fact that the original agreed investment and operation plan was no longer executed by the executives of Planty Holding Limited (“Planty”), which indicated a severe and sustained adverse impact on Planty’s expected profitability, and management therefore determined that the fair value of the investment in Planty should be written down to zero.
Other income, net
For the six months ended June 30, 2025 and 2024, other income, net was $16,812. For the same period in 2024, other income, net was $16,618, an increase of $194 or 1.2%.
Benefit from/Provision for Income Taxes
Our provision for income taxes was $61,212 for the six months ended June 30, 2025, for the same period in 2024, there was a tax benefit of $7,548, the increase of $68,760 was mainly due to the increase in pre-tax profits of Wuxi Mingteng Mould.
Under the Enterprise Income Tax (“EIT”) Law of the PRC, domestic enterprises are usually subject to a unified 25% EIT rate while preferential tax rates, tax holidays, and even tax exemptions may be granted on a case-by-case basis. The PRC tax authorities grant preferential tax treatment to High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Since Wuxi Mingteng Mould was approved as an HNTE in December 2019, Wuxi Mingteng Mould is entitled to a reduced income tax rate of 15% beginning December 2019 and is able to enjoy the reduced income tax rate through December 2022. In November 2022, Wuxi Mingteng Mould reapplied to obtain the recognition of HNTE and the preferential rate of 15% was extended to November 2025.
Net Loss
As a result of the foregoing, our net loss for the six months ended June 30, 2025 was $1,356,773, and for the same period in 2024, the net loss was $265,842.
Liquidity and Capital Resources
As of June 30, 2025 and December 31, 2024, we had cash and cash equivalents of $1,755,205 and $2,080,715, respectively.
Our main sources of operating funds are from net income and external borrowings, and we are confident they are sufficient to sustain our operations after the offering.
7
Working Capital
Total working capital as of June 30, 2025 amounted to $3,573,505 compared to $3,375,929 as of December 31, 2024. The current assets increase mainly due to the increase in accounts receivable and other receivables-bank acceptance notes total of $500,022, inventories of $301,789, and was partially offset by the decreases in cash and cash equivalents of $325,510. Current liabilities amounted to $5,446,345 as of June 30, 2025 as compared to $5,266,013 as of December 31, 2024. This increase in liabilities was attributable mainly to the increases in other payables and other current liabilities of $440,356, and was partially offset by the decreases in advances from customers of $213,143.
Capital Needs
To date, we have financed our operations primarily through cash flows from operations, short-term loans from bank and proceeds from public offerings. With the increasing market competition in the mold production industry, our management believes it is necessary to enhance the collection of outstanding accounts receivable and other receivables and to be cautious on operational decisions and project selection. We review the accounts receivable on a periodic basis and make general and specific allowances when there is doubt as to the recoverability of individual balances. Our management is confident in the collection of account receivables and other receivables.
Cash Flows Analysis
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
The following table sets forth a summary of our unaudited cash flows for the periods indicated:
(UNAUDITED)
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | (227,053 | ) | $ | (663,198 | ) | |||
| Net cash used in investing activities | (295,389 | ) | (3,159,280 | ) | ||||
| Net cash provided by financing activities | 190,000 | 4,154,100 | ||||||
| Effect of foreign exchange rate on cash and cash equivalents | 6,932 | (6,452 | ) | |||||
| Net (decrease) increase in cash and cash equivalents | (325,510 | ) | 325,170 | |||||
| Cash and cash equivalents at the beginning of the period | 2,080,715 | 1,056,236 | ||||||
| Cash and cash equivalents at the end of the period | $ | 1,755,205 | $ | 1,381,406 | ||||
Operating Activities
Net cash used in operating activities amounted to $227,053 for the six months ended June 30, 2025. It was primarily due to a) a net loss of $1,356,773, adjusted by depreciation of $282,373, b) amortization of intangible assets and right-of-use assets of $17,867, c) deferred income tax of $6,493, d) provision for credit losses of $3,907, e) impairment loss on long-term investment of $1,356,618, f) provision for contract costs impairment of $13,165. g) increase in other receivables-bank acceptance notes of 726,008, h) decrease in account receivable of $245,175, i) decrease in advances to suppliers of $47,880, j) increase in inventories of $295,816 due to the expansion of order volume, k) increase in accounts payable of $102,825, l) decrease in advance from customers of $214,530, m) increase in payroll payable of $192,941 due to the social security and public housing funding, and the salary for independent directors, n) increase in other payable of $49,182 due to the unpaid fees, etc.
Net cash used in operating activities amounted to $663,198 for the six months ended June 30, 2024. It was primarily due to a) a net loss of $265,842, adjusted by depreciation of $250,604, b) loss on disposal of property and equipment of $7,087, c) deferred income tax of $20,846, and d) recovery of bad debt provision by $8,463, e) increase in account receivable of $248,980 and other receivables-bank acceptance notes of 448,281 due to the increased sales scale, f) decrease in advances to suppliers of $122,765, g) increase in inventories of $122,625 due to the expansion of order volume, h) increase in accounts payable of $229,881 due to the increased purchase volume, i) decrease in advance from customers of $110,497, j) decrease in taxes payable of $115,684 due to the payments of last year’s income tax and additional taxes, and the decreased taxable profit for the six months ended June 30, 2024, k) increase in payroll payable of $39,160 due to the social security and public housing funding, and the salary for independent directors.
8
Investing Activities
Net cash used in investing activities amounted to $295,389 for the six months ended June 30, 2025. It was primarily due to purchase of property and equipment.
Net cash used in investing activities amounted to $3,159,280 for the six months ended June 30, 2024. It was primarily due to purchase of property and equipment amount of $625,053, and the deposit made for potential equity-method investment amount of $2,478,000 in the first half of 2024, and the prepayment for non-current assets of $56,227.
Financing Activities
Net cash provided by financing activities was $190,000 for the six months ended June 30, 2025. During the first half of 2025, we received proceeds from third party loans of $190,000.
Net cash provided by financing activities was $4,154,100 for the six months ended June 30, 2024. During the first half of 2024, we received proceeds from short-term loans of $1,407,441 and repaid short-term loans of $281,488. Net proceeds from IPO amount to $3,293,096 for the six months ended June 30, 2024, and the deferred offering costs paid by cash amount to $264,949.
Loan Facilities
On February 21, 2024, Wuxi Mingteng Mould entered into an unsecured short-term loan agreement with Bank of Jiangsu with principal amount of RMB 10 million (approximately $1.4 million), with an annual interest rate of 2.95%. The maturity date of the loan is February 20, 2025. Such loan agreement was renewed in February 2025 with an annual interest rate of 3.30% and maturity date as of February 17, 2026.
Contingencies
From time to time, we may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Amounts accrued, as well as the total amount of possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the consolidated financial statements. As of June 30, 2025, we have no outstanding litigation.
Off-Balance Sheet Arrangements
We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders’ equity, or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
Inflation
Inflationary factors, such as increases in the cost of raw materials, personnel and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses if the revenues from our products do not increase with such increased costs. The global economy, including the U.S. economy, has experienced rising inflation in recent months. We source key materials from third parties located in China. Although China has not experienced significant inflation and thus inflation has not had a material impact on our results of operations, we cannot provide any assurances that we will not be affected in the future by higher rates of inflation in mainland China. Sustained or rising inflation may result in increased costs to us in obtaining supplies of key materials to produce our products. If we explore the international market in the future, inflation may affect us by increasing our cost of labor and freight costs for our exported products. As a result, our results of operations may be adversely impacted.
Our plan to mitigate inflationary pressures are as follows: 1) control the growth of external costs by locking in prices and buying in bulk; 2) consider user experience and profitability, strengthen communication with customers, and adjust our pricing strategy to meet cost increases; and 3) strengthen internal management and technology research, to improve production efficiency and reducing the waste of production resources.
9
Supply Chain Analysis
For the six months ended June 30, 2025, two suppliers accounted for approximately 13.3% and 10.3% of the total purchases. For the six months ended June 30, 2024, four suppliers accounted for approximately 13.9%, 13.6%, 13.5% and 11.0% of the total purchases.
The raw materials used in production are mainly universal, such as steel and castings, which are highly replaceable and have a wide range of procurement sources. Therefore, we do not have a major dependence on suppliers, and the loss of some suppliers will not have a significant impact on our production.
Seasonality
The nature of our business does not appear to be affected by seasonal variations.
Critical Accounting Policies.
We prepare our consolidated financial statements in accordance with U.S. GAAP. These accounting principles require us to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable.
The selection of critical accounting policies, the judgments and other uncertainties affecting the application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our consolidated financial statements.
Use of estimates
In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but are not limited to, the assessment of the allowance for doubtful accounts, the allowance for inventory obsolescence, useful lives of property and equipment, the recoverability of long-lived assets, provision necessary for contingent liabilities. Actual results could differ from those estimates.
Fair value of financial instruments
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.
Authoritative literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. We follow ASC subtopic 820-10, Fair Value Measurements and Disclosures, which establishes a three-tier fair value hierarchy, and prioritizes the inputs used in measuring fair value 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. |
10
ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
Unless otherwise disclosed, the fair value of our financial instruments including cash and cash equivalents, accounts receivable, bank acceptance notes, other receivables, short-term loans, accounts payable, other payables, and amounts due to related parties approximate their recorded values due to their short-term maturities. The fair value of longer-term leases approximates their recorded values as their stated interest rates approximate the rates currently available.
Our non-financial assets, such as property and equipment and intangible assets would be measured at fair value only if they were determined to be impaired. When there is impairment of equity investments accounted for under the measurement alternative, the non-recurring fair value measurements are measured at the date of impairment. Estimating the fair value of the equity investment without observable market prices is highly judgmental due to the subjectivity of the unobservable inputs (level 3) used in the valuation methodologies used to determine fair value.
Revenue recognition
We account for revenue recognition under FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”). In accordance with FASB ASC 606, Revenue from Contracts with Customers, we recognized revenue to represent the transfer of products or services to customers in an amount that reflects the consideration to which we expected to be entitled in such exchange. This will require us to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of the product or the benefit of the services transfers to the customer. Under the guidance of FASB ASC 606,we are required to (a) identify the contract with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract and (e) recognize revenue when (or as) we satisfied its performance obligations.
Our main business income is divided into three categories, one is mold production, that is, contracts are signed to sell molds widely used in automobiles, valves, water pumps and other industries according to the customer’s needs. Second is mold repair, which provides customers with mold repair service, or provides sales of mold components. Last is providing customers with machining services, using our remaining capacity to provide customers with external processing services. Revenues represent the amount of consideration that we are entitled to in exchange for the transfer of promised goods or services in the ordinary course of our activities and is recorded net of value-added tax (“VAT”). Consistent with the criteria of FASB ASC 606, we recognize revenue when the performance obligation in a contract is satisfied by transferring control of promised goods or services to the customer.
Mold Production:
We sign contracts with customers and provide products according to the sales contract or sales list. The clients check the quantity and quality of products received and then issue confirmation as proof of payment. Certain clients may also test the finished products as part of the confirmation process. Revenue is recognized when we receive the confirmation of product acceptance.
We provide design and production services according to the sales contract or lists. We then transport and install the finished products when clients give their order.
The design services are inseparable from project sales. A mold production contract may include two or more machine components, but all components are customized according to customer requirements. These components need to be combined under the guidance of design plans to produce qualified products to meet the needs of clients. Therefore, these services are highly interdependent and are never transferred to the customer on their own. Customers do not have the option to purchase these services separately principally due to the customization of each project. Accordingly, these services are not considered separate performance obligations, and no revenue is associated with these services under FASB ASC 606 until the point in time when the project is complete and client confirmation is received.
11
We provide maintenance services and according to the contracts the clients do not have the option to purchase these services separately. The promised warranty does not provide the clients with a service in addition to the assurance that the product complies with agreed-upon contract specifications and is considered an assurance warranty. The maintenance services and the warranty are not considered separate performance obligations, and no revenue is associated with these services under FASB ASC 606. Historically, we have not experienced material costs for quality assurance and, therefore, do not believe an accrual for these costs is necessary.
Mold Repair：
We sign contracts with customers and provide repair services according to the contract or list and charge a certain fee. Revenue is recognized only after the repair service has passed the customer’s inspection.
Machining Services：
We sign contracts with customers and provide machining services and charge a certain fee. We identified the fulfillment of its obligation when transferring the product and issuing the VAT invoice to customers at which time revenue is recognized.
Cost of revenues
Cost of revenues consists of the cost of raw material, direct labor and manufacturing costs. During the production process, the production department records the material consumption quantity and production hours of each order. Raw material cost is allocated according to the consumption of the material. Direct labor and manufacturing costs are allocated according to the production hours.
Income taxes
Mingteng International’s subsidiaries in the PRC and Hong Kong are subject to the income laws of the PRC and Hong Kong. No taxable income was generated outside the PRC for the six months ended June 30, 2025 and 2024. Current income taxes are provided on the basis of net income (loss) for financial reporting purposes and adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are provided using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the tax effects of temporary differences and are determined by applying enacted statutory tax rates that will be in effect in the period in which the temporary differences are expected to reverse to the temporary differences between the financial statements’ carrying amounts and the tax bases of assets and liabilities. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset deferred tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity.
A valuation allowance is provided to reduce the amount of deferred income tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred income tax assets will not be realized. The effect on deferred income taxes arising from a change in tax rates is recognized in the consolidated statements of comprehensive income (loss) in the period of change.
We applied a “more likely than not” recognition threshold in the evaluation of uncertain tax positions. We recognized the benefit of a tax position in its consolidated financial statements if the tax position is “more likely than not” to prevail based on the facts and technical merits of the position. Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. Unrecognized tax benefits may be affected by changes in interpretation of laws, rulings of tax authorities, tax audits, and expiry of statutory limitations. In addition, changes in facts, circumstances and new information may require us to adjust the recognition and measurement estimates with regard to individual tax positions. Accordingly, unrecognized tax benefits are periodically reviewed and reassessed. Adjustments, if required, are recorded in our consolidated financial statements in the period in which the change that necessities the adjustments occur. The ultimate outcome for a particular tax position may not be determined with certainty prior to the conclusion of a tax audit and, in certain circumstances, a tax appeal or litigation process. We record interest and penalties related to unrecognized tax benefits (if any) in interest expenses and general and administrative expenses, respectively. As of June 30, 2025 and December 31, 2024, we did not have any significant unrecognized uncertain tax positions.
12
Foreign currency translation
The functional currency of our operations in the PRC is RMB. The consolidated financial statements are translated to U.S. dollars using the period end rates of exchange for assets and liabilities, equity is translated at historical exchange rates, and average rates of exchange (for the period) are used for revenues and expenses and cash flows. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.
All of our revenue transactions are transacted in its functional currency. We do not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of us.
The following table outlines the currency exchange rates that were used in preparing the consolidated financial statements, representing exchange rate of the People’s Bank of China (PBOC):
| June 30, | December 31, | Six months ended June 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Foreign currency | ||||||||||||||||
| RMB:1USD | 7.1586 | 7.1884 | 7.1839 | 7.1051 | ||||||||||||
Source: The State Administration of Foreign Exchange (http://www.safe.gov.cn/safe/rmbhlzjj/index.html)
Recent accounting pronouncements
We are an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in us including the additional required disclosures when adopted. We adopted this standard for its financial statements for the six months ended June 30, 2025 and applied this standard retrospectively for all prior periods presented in the financial statements. ASU 2023-07 has no material impact on our unaudited consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topics 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.
In November 2024.the FASB issued ASU 2024-03. Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosure (Subtopic 220-40) (“ASU 2024-03”), which improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the FASB issued ASU 2025-01which clarifies the effective date of ASU 2024-03. ASU 2024-03 is effective for fiscal years beginning after December 15.2026, and interim periods within fiscal years begin after December 15.2027. This ASU should be applied prospectively with the option to apply the standard retrospectively. We are currently evaluating the provisions of this ASU.
We do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on our consolidated financial position, statements of operations and comprehensive income (loss) and cash flows.
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Exhibit 99.2
INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Mingteng International Corporation Inc.
F-1
MINGTENG INTERNATIONAL CORPORATION INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Other receivables-bank acceptance notes | ||||||||
| Advances to suppliers | ||||||||
| Other receivables | ||||||||
| Inventories, net | ||||||||
| Contract costs, net | ||||||||
| Total current assets | ||||||||
| Non-current Assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Long-term investments, net | ||||||||
| Total non-current assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities | ||||||||
| Short-term loans | $ | $ | ||||||
| Accounts payable | ||||||||
| Other payables and other current liabilities | ||||||||
| Advances from customers | ||||||||
| Amounts due to related parties | ||||||||
| Current portion of lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-current Liabilities | ||||||||
| Deferred tax liabilities | ||||||||
| Non-current portion of lease liabilities | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Shareholders’ Equity: | ||||||||
| Ordinary shares (Par value US$ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserves | ||||||||
| (Accumulated deficit) retained earnings | ( | ) | ||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.
F-2
MINGTENG INTERNATIONAL CORPORATION INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ( | ) | ( | ) | ||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling expenses | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Research and development expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Income (loss) from operations | ( | ) | ||||||
| Other income (expenses): | ||||||||
| Government subsidies | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Other-than-temporary impairment | ( | ) | ||||||
| Other income, net | ||||||||
| Total other (expenses) income, net | ( | ) | ||||||
| Loss before income taxes | ( | ) | ( | ) | ||||
| Income tax (expenses) benefit | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Comprehensive loss | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Foreign currency translation loss | ( | ) | ||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| Loss per share | ||||||||
| - Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of ordinary shares outstanding | ||||||||
| - Basic and diluted | ||||||||
The accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.
F-3
MINGTENG INTERNATIONAL CORPORATION INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
| Ordinary shares | Additional paid-in |
Statutory | Retained | Accumulated other comprehensive |
Total shareholders’ |
|||||||||||||||||||||||
| Shares | Amount | capital | reserves | earnings | loss | equity | ||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||
| Net loss for the period | - | ( |
) | ( |
) | |||||||||||||||||||||||
| Shares issued in connection with initial public offering | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | ( |
) | ( |
) | |||||||||||||||||||||||
| Balance as of June 30, 2024 (Unaudited) | $ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||
| Ordinary shares | Additional paid-in |
Statutory | Retained earnings (accumulated |
Accumulated other comprehensive |
Total shareholders’ |
|||||||||||||||||||||||
| Shares | Amount | capital | reserves | deficit) | loss | equity | ||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||
| Net income for the period | - | ( |
) | ( |
) | |||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||
| Balance as of June 30, 2025 (Unaudited) | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
The accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.
F-4
MINGTENG INTERNATIONAL CORPORATION INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation of property and equipment | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of right-of-use assets | ||||||||
| Impairment loss on long-term investments | ||||||||
| Provision of (recovery of) credit losses | ( | ) | ||||||
| Deferred income tax | ( | ) | ||||||
| Loss on disposal of property and equipment | ||||||||
| Provision for contract costs impairment | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Other receivables-bank acceptance notes | ( | ) | ( | ) | ||||
| Advances to suppliers | ||||||||
| Other receivables | ||||||||
| Inventories | ( | ) | ( | ) | ||||
| Contract costs | ||||||||
| Accounts payable | ||||||||
| Advances from customers | ( | ) | ( | ) | ||||
| Payroll payable | ||||||||
| Taxes payable | ( | ) | ||||||
| Other payables | ||||||||
| Amounts due to related parties | ( | ) | ||||||
| Change in operating lease liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Purchase of long-term investment | ( | ) | ||||||
| Prepayments for non-current assets | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from short-term loans | ||||||||
| Repayment of short-term loans | ( | ) | ( | ) | ||||
| Proceeds from third party loans | ||||||||
| Proceeds from initial public offering, net | ||||||||
| Payments of deferred offering costs | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of foreign exchange rate change on cash and cash equivalents | ( | ) | ||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at the beginning of the period | ||||||||
| Cash and cash equivalents at the end of the period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash investing activities: | ||||||||
| Liabilities incurred for purchasing of property and equipment | ||||||||
The accompanying notes are an integral part of these Unaudited Interim Condensed Consolidated Financial Statements.
F-5
MINGTENG INTERNATIONAL CORPORATION INC.
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BUSINESS DESCRIPTION
Mingteng International Corporation Inc. (“Mingteng International” or the “Company”) is a holding company incorporated under the laws of the Cayman Islands on September 20, 2021. It is a holding company with no business operations.
On November 4, 2021, Mingteng International formed its wholly-owned subsidiary, Mingteng International Hong Kong Group Limited (“Mingteng HK”) in Hong Kong. On September 26, 2022, Mingteng HK formed its wholly-owned subsidiary, Wuxi Ningteng Intelligent Manufacturing Co., Ltd. (“Ningteng WFOE”) in the People’s Republic of China (“PRC”).
Wuxi Mingteng Mould Technology Co., Ltd. (“Wuxi Mingteng Mould”) is a limited liability company incorporated on December 15, 2015 under the laws of the PRC. Wuxi Mingteng Mould is a wholly owned subsidiary of Ningteng WFOE and is the Company’s operating entity. Wuxi Mingteng Mould is primarily engaged in providing clients with comprehensive and personalized mold services and solutions in the PRC, including mold design and development; mold production, repair, testing and adjustment.
On April 22, 2024, Mingteng International completed
its initial public offering on the Nasdaq Stock Market, issuing
Mingteng International’s current corporate structure is as follows:
Mingteng International conducts all of its operations in China through its operating subsidiary, Wuxi Mingteng Mould.
F-6
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited interim 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 unaudited interim condensed consolidated financial statements should be read in conjunction with the Mingteng International’s audited consolidated financial statements and the related notes thereto for the fiscal year ended December 31, 2024, included in Form 20-F filed on May 1, 2025.
Principles of consolidation
The unaudited consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances between the Company and its subsidiaries have been eliminated upon consolidation.
A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.
Use of estimates
In preparing the unaudited consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but are not limited to, the assessment of the allowance for credit losses, the allowance for inventory and contract costs provision, useful lives of property and equipment, the recoverability of long-lived assets and long-term investments, provision necessary for contingent liabilities. Actual results could differ from those estimates.
Cash and cash equivalents
Cash includes cash on hand and demand deposits
in accounts maintained with commercial banks. The Company considers all highly liquid investments that are readily convertible to known
amounts of cash and with original maturities from the date of purchase of three months or less to be cash equivalents. The Company maintains
its bank accounts in Mainland China, Hong Kong and Cayman Islands. On May 1, 2015, China’s new Deposit Insurance Regulation became
effective, pursuant to which banking financial institutions, such as commercial banks, established in the PRC are required to purchase
deposit insurance for deposits in RMB and in foreign currency placed with them. The insurance limit is RMB
Accounts receivable, net
Accounts receivables are stated at the original amount less an allowance for credit loss. Accounts receivables are recognized in the period when the Company has provided services to its customers and when its right to consideration is unconditional. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company has developed a current expected credit loss (“CECL”) model based on historical experience, the age of the accounts receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The Company considers historical collection rates, current financial status, macroeconomic factors, and other industry-specific factors when evaluating current expected credit losses. Accounts receivable balances are written off after all collection efforts have been exhausted.
F-7
Current expected credit losses
On January 1, 2023, the Company adopted ASC 326, Financial Instruments-Credit Losses, which requires recognition of allowances upon origination or acquisition of financial assets at an estimate of expected credit losses over the contractual term of the financial assets (the current expected credit loss or the “CECL” model) using the modified retrospective transition method.
The Company’s financial assets subject to the CECL model mainly include accounts receivable, bank acceptance notes and other receivables.
For accounts receivable and bank acceptance notes, the Company estimates the loss rate based on historical experience, the age of the receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. For other receivables, the Company reviews other receivables on a periodic basis and makes allowances on an individual basis when there is doubt as to the collectability. Receivables are written off after all collection efforts have been exhausted.
For the six months ended June 30, 2025 and 2024, allowance of credit losses made by the Company were mainly generated from accounts receivable.
Bank acceptance notes
Bank acceptance notes generally due within six months and with specific payment terms and definitive due dates, are comprised of the notes issued by some customers to pay certain outstanding receivable balances to the Company. Bank acceptance notes do not bear interest. From time to time, the Company endorse bank acceptance notes receivable to its suppliers as payment of material purchases. The bank acceptance notes receivable is considered sold and derecognized from balance sheets when they are transferred beyond the reach of the Company and its creditors, the purchaser has the right to pledge or exchange the note receivables, and the Company has surrendered control over the transferred note receivable. If the Company does not surrender control, the cash received from the purchaser is accounted for as a secured borrowing.
Advances to suppliers
Advances to suppliers consist of balances paid to suppliers for services that have not been provided or received. The Company reviews its advances to suppliers on a periodic basis and makes general and specific allowances when there is doubt as to the ability of a supplier to provide goods or services to the Company or refund an advance. As of June 30, 2025 and December 31, 2024, there was no allowance of advances to suppliers.
Inventories, net
Inventories consist of raw materials, work in process and finished goods, and are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method. The Company periodically evaluates its inventories and will record an allowance for inventories that are either slow-moving, may not be saleable or whose cost exceeds its net realizable value. For the six months ended June 30, 2025 and 2024 the Company did not record any provision for inventory obsolescence.
Property and equipment, net
Property and equipment are carried at cost and are depreciated on the straight-line basis over the estimated useful lives of the underlying assets. Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterments that extend the useful life of fixed assets are capitalized as additions to the related assets. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of its property and equipment, when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
F-8
Estimated useful lives are as follows, taking
into account the assets’ estimated residual value of
| Category | Estimated useful lives | |
| Electronic equipment | ||
| Vehicles | ||
| Machinery and equipment |
Intangible assets
Intangible asset is software license, which are
purchased from third parties and initially recorded at cost and amortized on a straight-line basis over the service term of
Impairment of long-lived assets
The Company reviews its long-lived assets, such as property and equipment, intangible assets and operating lease right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable in accordance with ASC Topic 360, Property, Plant and Equipment. When these events occur, the Company measures impairment by comparing the carrying value of the assets (or group of assets) to the estimated undiscounted future cash flows expected to result from the use of the assets (or group of assets) and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets (or group of assets), the Company would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets (or group of assets), using the expected future discounted cash flows. The Company didn’t record any impairment charge for the six months ended June 30, 2025 and 2024. 2024.
Long-term investment
The Company’s equity investments without readily determinable fair value are a long-term investment in an unlisted company. For equity securities without readily determinable fair value and do not qualify for the existing practical expedient in ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) to estimate fair value using the net asset value per share (or its equivalent) of the investment, the Company elected to use the measurement alternative under ASC 321, Investments — Equity Securities (“ASC 321”) to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. These investments are measured at fair value on a nonrecurring basis when an orderly transaction for identical or similar investments of the same issuer was identified or when there are events or changes in circumstances that may have a significant adverse effect. The non-recurring fair value measurements to the carrying amount of an investment usually requires management to estimate a price adjustment for the different rights and obligations between a similar instrument of the same issuer with an observable price change in an orderly transaction and the investment held by the Company. The valuation methodologies involved require management to use the observable transaction price at the transaction date and other unobservable inputs (level 3).
The Company makes a qualitative assessment of whether the equity investments are impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Company recognizes an impairment loss in the statements of operations and comprehensive income (loss) equal to the difference between the carrying value and fair value.
F-9
Deferred offering costs
Deferred offering costs are expenses directly related to the Company’s initial public offering (“IPO”). The deferred offering costs were offset against the IPO proceeds and reclassified to additional paid-in capital upon completion of the IPO in April 2024.
Fair value of financial instruments
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.
Authoritative literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company follows ASC subtopic 820-10, Fair Value Measurements and Disclosures, which establishes a three-tier fair value hierarchy, and prioritizes the inputs used in measuring fair value 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. |
ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash and cash equivalents, accounts receivable, bank acceptance notes, other receivables, short-term loans, accounts payable, other payables, and amounts due to related parties approximate their recorded values due to their short-term maturities. The fair value of longer-term leases approximates their recorded values as their stated interest rates approximate the rates currently available.
The Company’s non-financial assets, such as property and equipment and intangible assets would be measured at fair value only if they were determined to be impaired. When there is impairment of equity investments accounted for under the measurement alternative, the non-recurring fair value measurements are measured at the date of impairment. Estimating the fair value of the equity investment without observable market prices is highly judgmental due to the subjectivity of the unobservable inputs (level 3) used in the valuation methodologies used to determine fair value.
F-10
Leases
The Company accounts for leases following FASB ASC 842, Leases (“Topic 842”). The Company leases properties from property owners. In evaluating whether an agreement constitutes a lease. The Company reviews the contractual terms to determine which party obtains both the economic benefits and control of the assets at the inception of the contract. The Company categorizes leases with contractual terms longer than twelve months as either operating or finance lease at the commencement date of a lease.
A lease is a financial lease if any of the following
conditions exists: (a) ownership is transferred to the lessee by the end of the lease term, (b) there is a bargain purchase option, (c)
the lease term is at least
The Company recognizes a lease liability for future
fixed lease payments and a right-of-use (“ROU”) asset representing the right to use the underlying asset for the lease term.
The lease term is based on the non-cancellable term of the lease and may contain options to extend the lease when it is reasonably certain
that the Company will exercise the option. Lease liabilities are recognized at commencement date based on the present value of fixed lease
payments over the lease term using the rate implicit in the lease, if available, or the Company’s incremental borrowing rate. As
its leases do not provide an implicit borrowing rate, the Company uses an incremental borrowing rate based on the estimated rate of interest
for collateralized borrowing over a similar term of the lease payments at the commencement date. Current maturities of operating lease
liabilities are classified as operating lease liabilities, current in the Company’s consolidated balance sheets. Most leases have
initial terms ranging from
The Company reassesses of a contract is or contains a leasing arrangement and re-measures ROU assets and liabilities upon modification of the contract. The Company will derecognize ROU assets and liabilities, with a difference recognized in the income statement on the contract termination.
Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of lease liabilities, and non-current portion of ease liabilities, on the Company’s consolidated balance sheets.
Revenue recognition
The Company accounts for revenue recognition under FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”). In accordance with ASC 606, Revenue from Contracts with Customers, the Company recognizes revenue to represent the transfer of products or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of the product or the benefit of the services transfers to the customer. Under the guidance of ASC 606, the Company is required to (a) identify the contract with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract and (e) recognize revenue when (or as) the Company satisfies its performance obligations.
F-11
The Company’s main business income is divided
into three categories, one is mold production, that is, contracts are signed to sell molds widely used in automobiles, valves, water pump
and other industries according to the customer’s needs. Second is mold repair, which provides customers with mold repair service,
or provides sales of mold components. Last is providing customers with machining services, using the Company’s remaining capacity
to provide customers with external processing services. Revenues represent the amount of consideration that the Company is entitled to
in exchange for the transfer of promised goods or services in the ordinary course of the Company’s activities and is recorded net
of value-added tax (“VAT”). Consistent with the criteria of ASC 606, the Company recognizes revenue when the performance obligation
in a contract is satisfied by transferring the control of promised goods or services to the customer. The company elect to account for
shipping and handling activities as a fulfillment cost rather than as a separate performance obligation, of which was expensed as incurred
and amounted to $
Mold production:
The Company signs contracts with customers and provides products according to the sales contract or sales list. The clients check the quantity and quality of products received and then issue confirmation as proof of payment. Certain clients may also test the finished products as part of the confirmation process. Revenue is recognized when the Company receives the confirmation of product acceptance.
The Company provides design and production services according to the sales contract or lists. The Company then transports and installs the finished products when clients give their order.
The design services are inseparable from project sales. A mold production contract may include two or more machine components, but all components are customized according to customer requirements. These components need to be combined under the guidance of design plans to produce qualified products to meet the needs of clients. Therefore, these services are highly interdependent and are never transferred to the customer on their own. Customers do not have the option to purchase these services separately principally due to the customization of each project. Accordingly, these services are not considered separate performance obligations, and no revenue is associated with these services under ASC 606 until the point in time when the project is completed and delivered, and client confirmation is received.
The Company provides maintenance services and according to the contracts the clients do not have the option to purchase these services separately. The promised warranty does not provide the clients with a service in addition to the assurance that the product complies with agreed-upon contract specifications and is considered an assurance warranty. The maintenance services and the warranty are not considered separate performance obligations, and no revenue is associated with these services under ASC 606. Historically, the Company has not experienced material costs for quality assurance and, therefore, does not believe an accrual for these costs is necessary.
Mold repair:
The Company signs contracts with customers and provides repair services according to the contract or list and charges a certain fee. Revenue is recognized only after the repair service has passed the customer’s inspection.
Machining services:
The Company signs contracts with customers and provides machining services and charges a certain fee. The Company identifies the fulfillment of its obligation when transferring the product and issuing the VAT invoice to customers at which time revenue is recognized.
F-12
The following table presents revenue by major revenue type for the six months ended June 30, 2025 and 2024, respectively:
For
the six months ended | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Mold production | $ | $ | ||||||
| Mold repair | ||||||||
| Machining services | ||||||||
| Total | $ | $ | ||||||
Contract Balances
The Company classifies its right to consideration in exchange for services or products transferred to a customer as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional as compared to a contract asset which is a right to consideration that is conditional upon factors other than the passage of time. The Company recognizes accounts receivable in its consolidated balance sheets when it performs a service in advance of receiving consideration and it has the unconditional right to receive consideration. A contract asset is recorded when the Company has transferred services or products to the customer before payment is received or is due, and the right to consideration is conditional on future performance or other factors in the contract. As of June 30, 2025 and December 31, 2024, the Company had no contract assets.
The Company capitalizes incremental costs incurred
to fulfill contracts that (1) relate directly to the contract, (2) are expected to generate resources that will be used to satisfy the
performance obligation under the contract, and (3) are expected to be recovered through revenue generated under the contract. The compensation
expenses of the workforce hired and depreciation of certain equipment and overheads for the purpose of providing certain machining services
are considered incremental costs to fulfill the contracts. These contract costs are recorded as cost of revenues upon the recognition
of the related revenues. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses
become probable based on the current contract estimates. As of June 30, 2025 and December 31, 2024, the Company had deferred contract
costs of $
Contract liabilities are recognized if the Company receives consideration prior to satisfying the performance obligations, which are customer advances. The consideration received from customers related to the remaining arrangements are included in advance from customer balance.
Cost of revenues
Cost of revenues consists of the cost of raw material, direct labor and manufacturing costs. During the production process, the production department records the material consumption quantity and production hours of each order. Raw material cost is allocated according to the consumption of the material. Direct labor and manufacturing costs are allocated according to the production hours.
Selling expenses
Selling expenses primarily consist of (i) marketing promotion expenses to attract or retain consumers and increase company’s visibility, and labor costs and expenses for the salesman; and (ii) traveling expenses for the staffs.
F-13
Research and development expenses
Research and development (“R&D”) expenses include costs directly attributable to the conduct of R&D projects, including the cost of salaries and use of raw materials. Such projects include the research and development of adjustable casting molds for automotive parts. All costs associated with research and development are expensed as incurred.
General and administrative expenses
General and administrative expenses consist primarily of costs of salary and welfare for the Company general administrative and management staff, consulting fee, depreciation expenses, professional fees, meals and entertainment, office expenses, business travel expenses, additional expenses for public offering, and other miscellaneous expenses incurred in connection with general operations.
Government subsidies
Government subsidies refer to the monetary assets that a company obtains from the government for free. The government subsidies received by Wuxi Mingteng Mould mainly include high-tech enterprise recognition bonuses. The Company believes that these government subsidies are not related to daily business activities and are treated as other income.
Government subsidies for the six months ended
June 30, 2025 and 2024, were $
Income taxes
Mingteng International’s subsidiaries in the PRC and Hong Kong are subject to the income laws of the PRC and Hong Kong. No taxable income was generated outside the PRC for the six months ended June 30, 2025 and 2024. Current income taxes are provided on the basis of net income (loss) for financial reporting purposes and adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are provided using the asset and liability method. Under this method, deferred income tax assets and liabilities are recognized for the tax effects of temporary differences and are determined by applying enacted statutory tax rates that will be in effect in the period in which the temporary differences are expected to reverse to the temporary differences between the financial statements’ carrying amounts and the tax bases of assets and liabilities. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset deferred tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity.
A valuation allowance is provided to reduce the amount of deferred income tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred income tax assets will not be realized. The effect on deferred income taxes arising from a change in tax rates is recognized in the consolidated statements of comprehensive income (loss) in the period of change.
The Company applies a “more likely than
not” recognition threshold in the evaluation of uncertain tax positions. The Company recognizes the benefit of a tax position in
its consolidated financial statements if the tax position is “more likely than not” to prevail based on the facts and technical
merits of the position. Tax positions that meet the “more likely than not” recognition threshold are measured at the largest
amount of tax benefit that has a greater than
F-14
Value added tax
Sales revenue represents the invoiced value of
goods, net of VAT. The VAT is based on gross sales price and the VAT rate is approximately
Earnings (loss) per share
Mingteng International computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing the income (loss) available to ordinary shareholders of Mingteng International by the weighted average ordinary shares outstanding during the period. Diluted net earnings (loss) per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under the treasury stock method. Potential ordinary shares include warrants, unless they were anti-dilutive. The computation of diluted net earnings (loss) per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net income/(loss) per share.
Warrant
The accounting treatment of warrants issued is determined pursuant to the guidance provided by ASC 470, Debt (“ASC 470”), ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”), as applicable. Each feature of freestanding financial instruments including, without limitation, any rights relating to subsequent dilutive issuances, equity sales, rights offerings, conversions, optional redemptions and dividends are assessed with determinations made regarding the proper classification in the Company’s consolidated financial statements.
Shock-based compensation
Share based awards granted to employees are accounted for under ASC 718, “Compensation—Stock Compensation”, which requires that such equity awards granted to employees be measured based on the grant date fair value and recognized as compensation expense immediately at grant date if no vesting conditions are required.
Comprehensive income
Comprehensive income consists of two components, net income and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains, and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of foreign currency translation adjustments from the Company’s PRC subsidiaries not using U.S. dollar as its functional currency.
Foreign currency translation
The functional currency of Mingteng International’s operations in the PRC is the Chinese Yuan or Renminbi (“RMB”). The consolidated financial statements are translated to U.S. dollars using the period end rates of exchange for assets and liabilities, equity is translated at historical exchange rates, and average rates of exchange (for the period) are used for revenues and expenses and cash flows. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.
F-15
All of the Company’s revenue transactions are transacted in its functional currency. The Company does not enter into any material transaction in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of the operations of the Company.
The following table outlines the currency exchange rates that were used in preparing the consolidated financial statements, representing exchange rate of the People’s Bank of China (PBOC):
| June 30, | December 31, | Six months ended June 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Foreign currency | ||||||||||||||||
| RMB:1USD | ||||||||||||||||
Statement of cash flows
In accordance with ASC 230, Statement of Cash Flows, cash flows from the Company’s operations are formulated based upon the local currencies, and then translated at average translation rates for the periods. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.
Significant risks
Currency risk
A majority of the Company’s expense transactions are denominated in RMB and a significant portion of Mingteng International 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 Company foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.
The Company maintains certain bank accounts in
the PRC. On May 1, 2015, China’s new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions,
such as commercial banks, established in the PRC are required to purchase deposit insurance for deposits in RMB and in foreign currency
placed with them. Such Deposit Insurance Regulation would not be effective in providing complete protection for the Company’s accounts,
as its aggregate deposits are much higher than the compensation limit, which is RMB
Other than the deposit insurance mechanism in the PRC mentioned above, the Company’s bank accounts are not insured by Federal Deposit Insurance Corporation insurance or other insurance.
The total bank deposit balance was $
F-16
The functional currency and the reporting currency
of the Company is USD, while the functional currency of the Company’s PRC subsidiaries is RMB. Since July 21, 2005, RMB has been
permitted by the PRC government to fluctuate within a managed band against a basket of certain foreign currencies. The depreciation of
the USD against the RMB was
Concentration and credit risk
Currently, all the Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic, and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, accounts receivable, other receivables-bank acceptance notes. A portion of the Company’s sales are credit sales which are to the customers whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivables is limited due to generally short payment terms. The Company conducts credit evaluations of its customers and generally does not require collateral or other security from such customers. The Company periodically evaluates the creditworthiness of the existing customers in determining an allowance for credit losses primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers.
Interest rate risk
Fluctuations in market interest rates may negatively affect the Company’s financial condition and results of operations. The Company is exposed to floating interest rate risk on cash deposit and floating rate borrowings, and the risks due to changes in interest rates are not material. The Company has not used any derivative financial instruments to manage the Company interest rate risk exposure.
Other uncertainty risk
The Company’s major operations are conducted in the PRC. Accordingly, the political, economic, and legal environments in the PRC, as well as the general state of the PRC’s economy may influence the Company’s business, financial condition, and results of operations.
Employee benefits
Pursuant to the relevant laws and regulations
of the PRC, the Company’s subsidiaries in mainland China participate in a defined contribution of basic pension insurance in the
social insurance system established and managed by government organizations. The Company makes contributions to basic pension insurance
plans based on the applicable benchmarks and rates stipulated by the government. Basic pension insurance contributions are charged to
costs of revenues and operating expenses as the related services are rendered by the employees. Employee social benefits included as costs
of revenues and operating expenses were US$
F-17
Recent accounting pronouncements
The Company is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in us including the additional required disclosures when adopted. The Group adopted this standard for its financial statements for the year ended December 31, 2024 and applied this standard retrospectively for all prior periods presented in the financial statements. ASU 2023-07 has no material impact on the Company’s unaudited consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topics 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. For public business entities, the ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on the Company financial statement disclosures.
In November 2024, the FASB issued ASU 2024-03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosure (Subtopic 220-40) (“ASU 2024-03”), which improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. In January 2025, the FASB issued ASU 2025-01which clarifies the effective date of ASU 2024-03. ASU 2024-03 is effective for fiscal years beginning after December 15.2026, and interim periods within fiscal years begin after December 15.2027. This ASU should be applied prospectively with the option to apply the standard retrospectively. The Company is currently evaluating the provisions of this ASU.
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 financial position, statements of operations and comprehensive income (loss) and cash flows.
NOTE 3 - ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following:
| As of June 30, | As of December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Trade accounts receivable | $ | $ | ||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
F-18
The movements of allowance of credit losses were as follows:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at the beginning of the period | $ | ( | ) | $ | ( | ) | ||
| (Provision)/reversal | ( | ) | ||||||
| Foreign exchange difference | ( | ) | ||||||
| Balance at the end of the period | $ | ( | ) | $ | ( | ) | ||
NOTE 4 - INVENTORIES
Inventories consisted of the following:
| As of June 30, | As of December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Raw material | $ | $ | ||||||
| Work in process | ||||||||
| Goods in transit | ||||||||
| Inventories provision | ( | ) | ( | ) | ||||
| Total inventories | $ | $ | ||||||
The movements of provision for inventory were as follows:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at the beginning of the period | $ | ( | ) | $ | ( | ) | ||
| Provision during the six months period | ||||||||
| Foreign exchange difference | ( | ) | ||||||
| Balance at the end of the period | $ | ( | ) | $ | ( | ) | ||
The goods in transit to customers are still included in the inventory until the customer inspected and confirmed acceptance. Once obtaining the customer’s acceptance notice, the balance of goods in transit will be recognized in cost of revenues.
NOTE 5 - LONG-TERM INVESTMENT
The total carrying value of equity investments without readily determinable fair value that do not qualify for the NAV practical expedient held as of June 30, 2025 and December 31, 2024 were as follows:
| As of June 30, |
As of December 31, |
|||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Initial cost basis | $ | |||||||
| Cumulative impairment | ( |
) | ( |
) | ||||
| Total carrying value | $ | $ | ||||||
F-19
In May 2024, the Company signed equity transfer
agreements with Ms. Li Yulan, an unrelated third party to the Company, who owned
The Company’s initially assessed whether its investment in Planty qualified under ASC 323, Investments – Equity Method and Joint Ventures (“ASC 323”). The Company’s equity interest in Planty has the same rights and obligations as the other two investors and meets the definition of common stock as specified in ASC 323-10-15-13. The Company then assessed whether it can exercise significant influence over the other owners of Planty and concluded that it cannot exercise significant influence over Planty according to ASC 323-10-15-10, due to the following: 1) majority ownership of the investee is concentrated by a single shareholder, Ms. Li Yulan who operates Planty without regard to the views of other investors; and 2) the Board of Planty is also controlled by Ms. Li Yulan since she is the only executive director.
The Company finally considered that its equity investment in Planty, as a private company without readily determinable fair value and does not qualify for the NAV practical expedient in accordance with ASC 820, and elected to use the measurement alternative to measure the investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any in accordance with ASC 321.
The Company evaluated the impairment indicators
as described in ASC 321-10-35-3 at each reporting date and estimate the investment’s fair value in accordance with the principles
of ASC 820. If the fair value is less than the investment’s carrying value, the entity has to recognize an impairment loss in net
income equal to the difference between the carrying value and fair value. As of June 30, 2025, the Company had some disputes with Planty
and the original investment and operation plan was no longer executed by Planty, which indicated severe adverse impact on the anticipated
profitability of Planty, and the Company evaluated such situation and concluded that the fair value of the investment would be wrote down
to zero. As a result, impairment charges recognized on equity investments without readily determinable fair value were $
NOTE 6 - PROPERTY AND EQUIPMENT, NET
Property and equipment, stated at cost less accumulated depreciation, consisted of the following:
| As of June 30, | As of December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Mechanical equipment | $ | $ | ||||||
| Electronic equipment | ||||||||
| Vehicles | ||||||||
| Subtotal | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
For the six months ended June 30, 2025 and 2024,
depreciation expenses amounted to $
NOTE 7 - LEASES
Operating lease expenses, which excluded short-term
lease expenses, were $
F-20
Amounts recognized in the consolidated balance sheets are as follows:
| As of June 30, | As of December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Operating lease right-of-use assets | $ | $ | ||||||
| Operating lease liabilities, current | ||||||||
| Operating lease liabilities, non-current | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
The weighted-average remaining lease term and the weighted-average discount rate of leases are as follows:
| June 30, 2025 | December 31, 2024 | |||||||
| Weighted-average remaining operating lease term | ||||||||
| Weighted-average operating discount rate | % | % | ||||||
The following table summarizes the maturity of lease liabilities as of June 30, 2025:
| 12 months ending June 30, | Amount | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Total lease liabilities | $ | |||
NOTE 8 - SHORT-TERM LOANS
On February 21, 2024, Wuxi Mingteng Mould entered
into an unsecured short-term loan agreement with Bank of Jiangsu with principal amount of RMB
NOTE 9 - OTHER LIABILITIES
Other liabilities consisted of the following:
| As of June 30, | As of December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Corporate income taxes payable | $ | $ | ||||||
| Other taxes payable | ||||||||
| Payroll payable | ||||||||
| Loans from third parties* | ||||||||
| Accrued expenses | ||||||||
| Others | ||||||||
| Total other liabilities | $ | $ | ||||||
| * |
F-21
On February 25, 2025, the Company borrowed an
interest-free loan from a third party amounted to $
NOTE 10 - RELATED PARTY TRANSACTIONS
The table below sets the major related parties and their relationships with the Company:
| Name of related parties | Relationship with the Company | |
| Yingkai Xu | ||
| Jingzhu Ding | ||
| Wuxi Kaiteng Mold Factory |
Significant transactions with related parties were as follows:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Purchase from related parties: | ||||||||
| Wuxi Kaiteng Mold Factory(1) | $ | $ | ||||||
| Subtotal | $ | $ | ||||||
| (1) |
The following represented related party balances as of June 30, 2025 and December 31, 2024:
| As of June 30, | As of December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Amounts due to related parties | ||||||||
| Wuxi Kaiteng Mold Factory | $ | $ | ||||||
| Subtotal | $ | $ | ||||||
Amounts due to Wuxi Kaiteng Mold Factory represent amounts provided for processing services that the Company purchased from Wuxi Kaiteng Mold Factory.
NOTE 11 - SHAREHOLDERS’ EQUITY
Mingteng International is authorized to issue
In accordance with the relevant PRC laws and regulations,
Mingteng International’s subsidiaries in the PRC are required to provide for certain statutory reserves, which are appropriated
from net profits as reported in accordance with PRC accounting standards. Mingteng International’s subsidiaries in the PRC are required
to allocate at least
F-22
On April 22, 2024, Mingteng International completed
its initial public offering on the Nasdaq Stock Market, issuing
In connection with the initial public offering and the subsequent over-allotment offering, the Company also issued warrants to underwriters for the Ordinary Shares purchase option.
From April 2024 to May 2024, in connection with
the initial public offering and the subsequent over-allotment offering, Warrants were granted to underwriters to purchase up to
In the fiscal year of 2024,
The summary of warrant activities for the six months ended June 30, 2025 were as follows:
| Ordinary Shares Number Outstanding | Weighted Average Exercise Price | Remaining | ||||||||||
| Warrants Outstanding as of December 31, 2024 | $ | |||||||||||
| Warrants Exercisable as of December 31, 2024 | ||||||||||||
| Warrants Granted | - | |||||||||||
| Warrants Exercised | - | |||||||||||
| Warrants Expired | - | |||||||||||
| Warrants Outstanding as of June 30, 2025 | ||||||||||||
| Warrants Exercisable as of June 30, 2025 (unaudited) | $ | |||||||||||
There was no warrant activities for the six months ended June 30, 2024.
NOTE 12 - OTHER INCOME
Other income consisted of the following:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Waste sales | $ | $ | ||||||
| Loss on disposal of fixed assets | ( | ) | ||||||
| Other, net | ||||||||
| Total other income | $ | $ | ||||||
F-23
NOTE 13 - TAXES
Corporation Income Tax (“CIT”)
The Company is subject to income taxes on an entity basis on income derived from the location in which each entity is domiciled.
Mingteng International is incorporated in Cayman Islands as an offshore holding company and is not subject to tax on income or capital gains under the laws of the Cayman Islands.
Mingteng International HK is incorporated in Hong Kong as a holding company with no activities. Under the Hong Kong tax laws, an entity is not subject to income tax if no revenue is generated in Hong Kong.
Under the Enterprise Income Tax (“EIT”)
Law of the PRC, domestic enterprises and foreign investment enterprises (the “FIE”) are usually subject to a unified
The provision for income taxes consisted of the following:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Current | ||||||||
| China | ||||||||
| Deferred | ||||||||
| China | ( | ) | ||||||
| Income tax expenses (benefit) | $ | $ | ( | ) | ||||
The following table reconciles the PRC statutory rate to the Company’s effective tax rate:
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| PRC statutory tax rate | % | % | ||||||
| Additional deduction of research and development expenses | % | % | ||||||
| Non-deductible expenses | % | % | ||||||
| Effect of PRC preferential tax rate | ( | )% | ( | )% | ||||
| Adjustments in respect of current income tax of previous years | ( | )% | ||||||
| Effect of different tax rates in the different tax jurisdictions | ( | )% | ( | )% | ||||
| Effective tax rate | ( | )% | % | |||||
F-24
Deferred tax assets and liabilities
Components of net deferred tax assets and liabilities were as follows:
| As of June 30, | As of December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| Allowance for credit loss | $ | $ | ||||||
| Inventories valuation allowance | ||||||||
| Operating lease liabilities | ||||||||
| Deferred tax assets | ||||||||
| Right-of-use asset | ( | ) | ( | ) | ||||
| Depreciation | ( | ) | ( | ) | ||||
| Deferred tax liabilities | ( | ) | ( | ) | ||||
| Net deferred tax liabilities | $ | ( | ) | $ | ( | ) | ||
The movement of net deferred tax liabilities and assets were as follows:
| For the six months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Balance at beginning of the period | $ | ( | ) | $ | ( | ) | ||
| (Provision) reversal | ( | ) | ||||||
| Foreign exchange difference | ( | ) | ||||||
| Balance at end of the period | $ | ( | ) | $ | ( | ) | ||
NOTE 14 - CONCENTRATION OF MAJOR CUSTOMERS AND SUPPLIERS
For the six months ended June 30, 2025, two customers
accounted for approximately
As of June 30, 2025, only one customer accounted
for approximately
For the six months ended June 30, 2025, two suppliers
accounted for approximately
As of June 30, 2025, only one supplier accounted
for approximately
NOTE 15 - COMMITMENTS AND CONTINGENCIES
Contingencies
From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Amounts accrued, as well as the total amount of possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the consolidated financial statements. As of June 30, 2025, the Company has no outstanding litigation.
F-25
Foreign currency risk
The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.
NOTE 16 – LOSS PER SHARE
Basic and diluted loss per share for each of the period presented is calculated as follows:
| For the six months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Numerator: | ||||||||
| Net loss used in calculating loss per share-basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted average number of ordinary shares outstanding used in calculating basic and diluted loss per share | ||||||||
| Basic and diluted loss per share | $ | ( | ) | $ | ( | ) | ||
NOTE 17 - SEGMENT REPORTING
ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments.
Based on the management’s assessment, the
Company determined that it has only
F-26
NOTE 18 - SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the unaudited interim condensed consolidated financial statements were issued and identified the following transactions for financial disclosure purposes.
On August 12, 2025, the board of directors approved
the re-designation of the ordinary shares to Class A and Class B ordinary shares. Upon the re-designations, the authorized
share capital of the Company will be US$
Unaudited pro forma shareholders’ equity as of June 30, 2025 reflects the re-designation of the ordinary shares to Class A and Class B ordinary shares was as follows:
| June 30, | June 30, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | Pro Forma (Unaudited) | |||||||
| Shareholders’ Equity: | ||||||||
| Ordinary shares (Par value US$ | $ | $ | ||||||
| Class A ordinary shares (Par value US$ | ||||||||
| Class B ordinary shares (Par value US$ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserves | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
The unaudited pro forma loss per share is computed using the weighted-average number of ordinary shares outstanding as of June 30, 2025 and assumes the completion of re-designation on January 1, 2025. The liquidation and dividend rights of the holders of the Company’s Class A and Class B ordinary shares are identical, except with respect to voting rights. As a result, and in accordance with ASC 260, the undistributed loss (income) for each period is allocated based on the contractual participation rights of the Class A and Class B ordinary shares. As the liquidation and dividend rights are identical, the undistributed (loss)/income is allocated on a proportionate basis and will have no impact on the result of the unaudited pro forma loss per share.
On July 7, 2025, the Company issued an aggregate
of
F-27