Press release·08/15/2026 00:44:14

Results of Operations

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

Net Revenues: Our net revenues for the three months ended June 30, 2026 amounted to $790,203, reflecting a significant increase of $787,073 compared to $3,130 for the three months ended June 30, 2025. This increase was attributable to the growth of our online advertising business and the expanded enterprise sales distribution channel of our tea products.

Cost of Revenues: During the three months ended June 30, 2026, we experienced an increase in our cost of revenue of $731,731, from $1,672 to $733,403. This increase was mainly due to an increase in cost of revenue from online advertising services and sales of tea products in line with revenue.

Promotion Cost: During the three months ended June 30, 2026, we incurred promotion cost of $760,064 in connection with sales of tea products by Hubei Shengsili, compared to $nil for the three months ended June 30, 2025.

Gross Profit: Our gross profit decreased by $704,722, to a loss of $703,264 for the three months ended June 30, 2026 compared to a profit of $1,458 for the three months ended June 30, 2025. Our gross margin was negative 89.0% for the three months ended June 30, 2026 compared to positive 46.6% for the three months ended June 30, 2025. The decrease in gross profit and gross margin was attributable to the significant increase in promotion cost.

Operating Expenses:

• Selling and Marketing Expenses: Our selling and marketing expenses increased by $842, to $1,985 for the three months ended June 30, 2026 from $1,143 for the three months ended June 30, 2025, mainly due to the increase in shipping and delivery expenses and business travel and meals expense.
• General and Administrative Expenses: Our general and administrative expenses for the three months ended June 30, 2026 increased by $158,888, to $454,416 compared to $295,528 for the three months ended June 30, 2025. This increase was mainly due to an increase in salary and rental expense of our new subsidiaries, as well as impairment of intangible asset.
• Research and Development Expenses: Our research and development expenses for the three months ended June 30, 2026 was $836, compared to $nil for the three months ended June 30, 2025, due to an increase in research expense of our new products.

Net Loss: Our net loss was $1,149,151 for the three months ended June 30, 2026, compared to a net loss of $773,581 for the three months ended June 30, 2025. This change in net loss was primarily attributable to the decrease in gross profit.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

Net Revenues: Our net revenues for the six months ended June 30, 2026 amounted to $7.09 million, reflecting a significant increase of approximately $7.03 million compared to $63,666 for the six months ended June 30, 2025. This increase was attributable to our acquisition of Hubei Shengsili in November 2025 and the expanded enterprise sales distribution channel of our tea products.

Cost of Revenues: During the six months ended June 30, 2026, we experienced an increase in our cost of revenue of $1.11 million, from $7,963 to $1.12 million. This increase was mainly due to an increase in cost of revenue from sales of tea products in line with revenue.

Promotion Cost: During the six months ended June 30, 2026, we incurred promotion cost of $5.15 million in connection with sales of tea products by Hubei Shengsili, compared to $nil for the six months ended June 30, 2025.

Gross Profit: Our gross profit increased by approximately $0.77 million, to $0.83 million for the six months ended June 30, 2026 compared to $55,703 for the six months ended June 30, 2025. Our gross margin decreased by 75.8%, to 11.7% for the six months ended June 30, 2026 compared to 87.5% for the six months ended June 30, 2025. The increase in gross profit and decrease in gross margin was attributable to our acquisition of Hubei Shengsili, which engaged sales agents to expand the sales network of our tea product, incurring significant promotion cost to achieve small profits but quick turnover.

Operating Expenses:

• Selling and Marketing Expenses: Our selling and marketing expenses increased by $2,687, to $10,702 for the six months ended June 30, 2026 from $8,015 for the six months ended June 30, 2025, mainly due to the increase in shipping and delivery expenses and business travel and meals expense.
• General and Administrative Expenses: Our general and administrative expenses for the six months ended June 30, 2026 increased by approximately $0.38 million, to $1.08 million compared to $0.70 million for the six months ended June 30, 2025. This increase was mainly due to an increase in audit expense of $0.24 million, salary and rental expense of our new subsidiaries, as well as impairment of intangible asset.
• Research and Development Expenses: Our research and development expenses for the six months ended June 30, 2026 was $954 compared to $nil for the six months ended June 30, 2025, due to an increase in research expense of our new products.

Net Loss: Our net loss was $0.65 million for the six months ended June 30, 2026, compared to $1.57 million for the six months ended June 30, 2025. This change in net loss was primarily attributable to the increase in revenue, and decrease in loss from discontinued operations.

Foreign Exchange Controls

A significant portion of our cash is held in RMB by our PRC subsidiaries. The RMB is not freely convertible into foreign currencies, which could affect our ability to utilize our PRC cash balances to fund our offshore operations or to make dividends or other distributions to our holding company.

Liquidity and Going Concern

The Company has reported net loss from continuing operations of $279,375 for the six months ended June 30, 2026, and its net cash provided by operating activities from continuing operations for the six months ended June 30, 2026 was $24,080. The Company had an accumulated deficit of $175,623,596 and a working capital deficit of $6,122,619 as of June 30, 2026. These factors raise substantial doubt on the Company’s ability to continue as a going concern.

The Company has recently expanded its sales and marketing efforts by engaging sales agents to promote its tea products and enhance market penetration. Management’s plan for the Company’s continued existence is dependent upon management’s ability to execute its business plan and generate additional profits. Additionally, Management may need to continue to rely on private placements or other capital raising transactions or certain related parties to provide funding.

Cash Flows Data:

For the Six Months Ended June 30	2026	2025
Net cash flows used in operating activities	$(478,000)	$(2,027,000)
Net cash flows used in investing activities	$(12,000)	$(2,000)
Net cash flows provided by financing activities	$811,000	$2,502,000

Critical Accounting Estimates and Policies

Accounts Receivable, Net: Accounts receivable is presented net of an allowance for credit losses, which is determined based on historical collectability, age of accounts receivable, credit quality of customers, economic conditions, and other factors. As of June 30, 2026 and December 31, 2025, the allowance for uncollectable balances amounted to $885,380 and $784,239, respectively.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.