What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-14 · 341 added, 324 removed, 344 unchanged (66% of the section changed)

2 unchanged sentences

The following discussion of the financial condition

and results of operations of the Company for the periods ended June 30, 2025 and 2024 should be read in conjunction with the financial

and results of operations of the Company for the periods ended September 30, 2025 and 2024 should be read in conjunction with the financial

statements and the notes to the financial statements that are included elsewhere in this quarterly report.

36 unchanged sentences

Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

Revenue for the three months ended June 30, 2025

was $24,794,641, a decrease of $1,455,147, or 5.54%, from $26,249,788 for the same period in the previous year.

This was mainly due to

decreases in the sales volume of corrugating medium paper (“CMP”) and in the average selling prices (“ASP”) of

Comparison of the Three months ended September 30, 2025 and 2024

Revenue for the three months ended September 30,

2025 was $25,601,344, an increase of $519,844, or 2.07%, from $25,081,500 for the same period in the previous year.

This was mainly due

to the increase of sales volume of corrugating medium paper (“CMP”) and the increase in average selling prices (“ASP”)

Revenue of Offset Printing Paper, Corrugating Medium Paper and Tissue

Paper Products

Revenue from sales of offset printing paper, CMP and tissue paper products for the three months ended June 30, 2025 was $24,794,641, representing

a decrease of $1,418,174, or 5.41%, from $26,212,815 for the second quarter of 2024.

The total volume of offset printing paper, CMP and

tissue paper products sold during this period amounted to 74,188 tonnes, representing a decrease of 1,177 tonnes, or 1.56%, compared to

the 75,365 tonnes sold during the comparable period in the previous year.

Revenue from sales of offset

printing paper, CMP and tissue paper products for the three months ended September 30, 2025 was $25,601,344, representing an increase

of $556,969, or 2.22%, from $25,044,375 for the third quarter of 2024.

Total offset printing paper, CMP and tissue paper products sold

during the three months ended September 30, 2025 amounted to 75,686 tonnes, representing an increase of 802 tonnes, or 1.07%, compared

to 74,884 tonnes sold during the comparable period in the previous year.

Production of offset printing paper and tissue paper products

was suspended from 2024 through the first half of 2025 and is expected to resume in the second half of 2025.

The changes in revenue dollar

amount and in quantity sold for the three months ended June 30, 2025 and 2024 are summarized as follows:

was suspended from 2024 through September 2025 and is expected to resume at the end of 2025.

The changes in revenue dollar amount and

in quantity sold for the three months ended September 30, 2025 and 2024 are summarized as follows:

Three Months Ended

June 30, 2025

Three Months Ended

June 30, 2024

Percentage Change

September 30, 2025

September 30, 2024

Sales Revenue

Quantity (Tonne)

$ (1,331,192 )

Light-Weight CMP

$ (1,418,174 )

Offset Printing Paper

1 unchanged sentence

Total CMP, Offset Printing Paper and Tissue Paper Revenue

$ (1,418,174 )

Monthly sales revenue for the 24 months ended June 30, 2025, is summarized

Monthly sales revenue for the 24 months ended September 30, 2025, is

summarized below:

The average selling prices (ASPs) for our main products in the three

months ended June 30, 2025 and 2024 are summarized as follows:

Offset Printing Paper ASP

Tissue Paper Products ASP

Three Months ended June 30, 2025

Three Months ended June 30, 2024

Decrease from comparable period in the previous year

Decrease by percentage

months ended September 30, 2025 and 2024 are summarized as follows:

Offset Printing

Three Months ended September 30, 2025

Three Months ended September 30, 2024

Increase from comparable period in the previous year

Increase by percentage

The following chart shows the month-by-month ASPs for the 24-month

period ended June 30, 2025:

period ended September 30, 2025:

Corrugating Medium Paper

Revenue from CMP amounted

to $24,794,641 (100.00% of the total offset printing paper, CMP and tissue paper product revenues) for the three months ended June 30,

2025, representing a decrease of $1,418,174, or 5.41%, from $26,212,815 for the comparable period in 2024.

to $25,601,344 (100.00% of the total offset printing paper, CMP and tissue paper products revenues) for the three months ended September

30, 2025, representing an increase of $556,969, or 2.22%, from $25,044,375 for the comparable period in 2024.

We sold 75,686 tonnes of

CMP in the three months ended June 30, 2025, compared to 75,365 tonnes for the same period in 2024, representing a 1.56% decrease in quantity

The ASP for regular CMP decreased from $350/tonne

for the three months ended June 30, 2024 to $336/tonne for the three months ended June 30, 2025, representing a 4.00% decrease.

RMB for regular CMP for the second quarter of 2024 and 2025 was RMB2,488 and RMB2,409, respectively, representing a 3.18% decrease.

quantity of regular CMP sold decreased by 1,259 tonnes, from 62,813 tonnes in the second quarter of 2024 to 61,554 tonnes in the second

CMP in the three months ended September 30, 2025 as compared to 74,884 tonnes for the same period in 2024, representing a 1.07% increase

in quantity sold.

The ASP for regular CMP increased from $337/tonne

for the three months ended September 30, 2024, to $340/tonne for the three months ended September 30, 2025, representing a 0.89% increase.

ASP in RMB for regular CMP for the third quarter of 2024 and 2025 was RMB2,386 and RMB2,422, respectively, representing a 1.51% increase.

The quantity of regular CMP sold increased by 690 tonnes, from 62,121 tonnes in the third quarter of 2024 to 62,811 tonnes in the third

quarter of 2025.

The ASP for light-weight CMP decreased from $337/tonne

for the three months ended June 30, 2024 to $328/tonne for the three months ended June 30, 2025, representing a 2.67% decrease.

RMB for light-weight CMP for the second quarter of 2024 and 2025 was RMB2,395 and RMB2,354, respectively, representing a 1.73% decrease.

The quantity of light-weight CMP sold increased by 82 tonnes, from 12,552 tonnes in the second quarter of 2024, to 12,634 tonnes in the

second quarter of 2025.

The ASP for light-weight CMP increased from

$324/tonne for the three months ended September 30, 2024 to $331/tonne for the three months ended September 30, 2025, representing a 2.16%

ASP in RMB for light-weight CMP for the third quarter of 2024 and 2025 was RMB2,297 and RMB2,362, respectively, representing

a 2.84% increase.

The quantity of light-weight CMP sold increased by 112 tonnes, from 12,763 tonnes in the third quarter of 2024, to 12,875

tonnes in the third quarter of 2025.

Our PM6 production line, which produces regular

CMP, has a designated capacity of 360,000 tonnes per year.

The utilization rates for the second quarter of 2025 and 2024 were 68.82% and

CMP, has a designated capacity of 360,000 tonnes /year.

The utilization rates for the third quarter of 2025 and 2024 were 69.41% and 68.96%,

respectively, representing an increase of 0.45%.

1 unchanged sentence

Total cost of sales for CMP, offset printing paper

and tissue paper products for the quarter ended June 30, 2025 was $23,520,896, an increase of $536,408, or 2.33%, from $22,984,488 for

the comparable period in 2024.

This was mainly due to the increase in unit material cost of CMP, partially offset by the decrease in the

sales quantity of regular CMP.

The cost of sales for CMP was $23,520,896 for

the quarter ended June 30, 2025, as compared to $22,984,488 for the comparable period in 2024.

The increase of $536,408 was mainly due

to the increase in the average unit cost of sales of CMP, partially offset by the decrease in sales volume of regular CMP.

cost of sales per tonne for CMP increased by 3.93%, from $305 in the second quarter of 2024 to $317 in the second quarter of 2025.

increase was mainly attributable to higher average unit purchase costs (net of applicable value-added tax) of recycled paper board in

the second quarter of 2025 compared to the second quarter of 2024.

Changes in cost of sales and cost per tonne by product for the quarters

ended June 30, 2025 and 2024 is summarized below:

and tissue paper products for the quarter ended September 30, 2025 was $23,579,498, an increase of $415,663, or 1.79%, from $23,163,835

for the comparable period in 2024.

This was mainly due to the increase in the sales quantity of CMP.

Cost of sales for CMP was $23,579,498 for the

quarter ended September 30, 2025, as compared to $23,163,835 for the comparable period in 2024.

The increase in the cost of sales of $415,663

for CMP was due to the increase in sales volume of CMP and slight increase in average unit cost of sales of CMP.

Average cost of sales

per tonne for CMP increased by 0.97%, from $309 in the third quarter of 2024 to $312 in the third quarter of 2025.

The increase in average

cost of sales was mainly attributable to the higher average unit gas costs in the third quarter of 2025 compared to the third quarter

Changes in cost of sales and cost per tonne by product for the quarters ended September 30, 2025 and 2024 is summarized below:

Three Months Ended

June 30, 2025

June 30, 2024

Change in percentage

Cost of Sales

Cost per Tonne

Cost of Sales

Cost per Tonne

Cost of Sales

Cost per Tonne

Cost of Sales

Cost per Tone

September 30, 2025

September 30, 2024

Light-Weight CMP

2 unchanged sentences

Total CMP, Offset Printing Paper and Tissue Paper

Our average unit purchase cost (net of

applicable value-added tax) of recycled paper board in the three months ended June 30, 2025 was RMB 1,250/tonne (approximately

$174/tonne), compared to RMB 1,167/tonne (approximately $164/tonne) for the three months ended June 30, 2024.

These changes (in US

dollars) represent a year-over-year increase of 6.10% for recycled paper board.

We use domestic recycled paper (sourced mainly from

the Beijing-Tianjin metropolitan area) exclusively.

Although we do not rely on imported recycled paper, whose pricing tends to be

more volatile than domestic recycled paper, our experience suggests that the pricing of domestic recycled paper bears some

correlation to that of imported recycled paper.

Our average unit purchase costs (net of applicable

value added tax) of recycled paper board and recycled white scrap paper in the three months ended September 30, 2025 were RMB 1,211/tonne

(approximately $169/tonne), as compared to RMB 1,214/tonne (approximately $171/tonne) for the three months ended September 30, 2024.

changes (in US dollars) represent a year-over-year decrease of 1.17% for the recycled paper board.

We use domestic recycled paper (sourced

mainly from the Beijing-Tianjin metropolitan area) exclusively.

Although we do not rely on imported recycled paper, the pricing of which

tends to be more volatile than domestic recycled paper, our experience suggests that the pricing of domestic recycled paper bears some

correlation to the pricing of imported recycled paper.

The pricing trends of our major raw materials

for the 24-month period from July 2023 to June 2025 are shown below:

for the 24-month period from October 2023 to September 2025 are shown below:

Electricity and gas are

our two main energy sources.

Electricity and gas accounted for approximately 5% and 15.1% of total sales in the second quarter of 2025,

respectively, compared to 5% and 12.9% of total sales in the second quarter of 2024.

The monthly energy cost as a percentage of total

monthly sales of our main paper products for the 24 months ended June 30, 2025 is summarized as follows:

Gross profit for the three months ended June 30,

2025 was $1,273,745 (representing 5.14% of total revenue), representing a decrease of $1,991,555, or 60.99%, from the gross profit of

$3,265,300 (representing 12.44% of total revenue) for the three months ended June 30, 2024, as a result of the factors described above.

Offset Printing Paper, CMP and Tissue Paper

Electricity and gas accounted for approximately 5% and 14.8% of total sales in the third quarter of 2025,

respectively, compared to 5% and 14.3% of total sales in the third quarter of 2024.

The monthly energy cost as a percentage of total monthly

sales of our main paper products for the 24 months ended September 30, 2025 is summarized as follows:

Gross profit for the three months ended September

30, 2025 was $2,021,846 (representing 7.90% of the total revenue), representing an increase of $104,465, or 5.45%, from the gross profit

of $1,917,381 (representing 7.64% of the total revenue) for the three months ended September 30, 2024, as a result of the factors described

Offset Printing Paper, CMP and Tissue

Paper Products

Gross profit for offset printing paper, CMP and

tissue paper products for the three months ended June 30, 2025 was $1,273,745, representing a decrease of $1,954,582, or 60.54%, from

the gross profit of $3,228,327 for the three months ended June 30, 2024.

The decrease was mainly the result of the factors discussed above.

tissue paper products for the three months ended September 30, 2025 was $2,021,846, representing an increase of $141,306, or 7.51%, from

the gross profit of $1,880,540 for the three months ended September 30, 2024.

The increase was mainly the result of the factors discussed

The overall gross profit margin for offset printing

paper, CMP and tissue paper products decreased by 7.18 percentage points, from 12.32% for the three months ended June 30, 2024, to 5.14%

for the three months ended June 30, 2025.

paper, CMP and tissue paper products increased by 0.39 percentage points, from 7.51% for the three months ended September 30, 2024, to

7.90% for the three months ended September 30, 2025.

The gross profit margin for regular CMP for the

three months ended June 30, 2025 was 5.11%, or 7.11 percentage points lower, compared to gross profit margin of 12.22% for the three months

ended June 30, 2024.

This decrease was mainly due to decreased ASP of regular CMP and increased unit cost of sales in the second quarter

three months ended September 30, 2025 was 7.91%, or 0.37 percentage points higher, as compared to gross profit margin of 7.54% for the

three months ended September 30, 2024.

Such increase was mainly due to the increase in ASP of regular CMP in the third quarter of 2025.

The gross profit margin for light-weight CMP for

the three months ended June 30, 2025 was 5.29%, or 7.53 percentage points lower, compared to the gross profit margin of 12.82% for the

three months ended June 30, 2024.

Such decrease was mainly due to the decrease in ASP of light-weight CMP and the increase in unit cost

of sales in the second quarter of 2025.

the three months ended September 30, 2025 was 7.84%, or 0.51 percentage points higher, as compared to gross profit margin of 7.33% for

the three months ended September 30, 2024.

The increase was mainly due to the increase in ASP of light-weight CMP in the third quarter

Monthly gross profit margins on the sales of our

CMP and offset printing paper for the 24-month period ended June 30, 2025 are as follows:

CMP and offset printing paper for the 24-month period ended September 30, 2025 are as follows:

Selling, General and Administrative Expenses

Selling, general and administrative expenses for

the three months ended June 30, 2025 were $3,036,775, an increase of $319,227, or 11.75% from $2,717,548 for the three months ended June

The increase was mainly due to increased depreciation of idle fixed assets.

(Loss) Income from Operations

Operating loss for the quarter ended June 30,

2025 was $1,763,030, a decrease of $2,310,782, or 421.87%, from income from operations of $547,752 for the quarter ended June 30, 2024.

The decrease was primarily due to the decline in gross profit and the increase in selling, general and administrative expenses.

the three months ended September 30, 2025 were $3,018,187, a decrease of $363,315, or 10.74% from $3,381,502 for the three months ended

September 30, 2024.

The decrease was mainly due to the accrued liability of $0.47 million for legal proceedings the Company was jointly

liable for repayment of a loan in the third quarter of 2024.

Loss from Operations

Operating loss for the quarter ended September

30, 2025 was $992,632, a decrease of loss of $471,489, or 32.20%, from $1,464,121 for the quarter ended September 30, 2024.

was primarily due to the increase in gross profit and the decrease in selling, general and administrative expenses.

Other Income and Expenses

Interest expense for the three months ended June

30, 2025 decreased by $67,580, from $211,551 for the three months ended June 30, 2024, to $143,971.

The Company had short-term and long-term

interest-bearing loans that aggregated $9,749,113 as of June 30, 2025, as compared to $12,149,914 as of June 30, 2024.

Interest expense for the three months ended September

30, 2025 decreased by $20,728, from $171,430 for the three months ended September 30, 2024, to $150,702.

The Company had short-term and

long-term interest-bearing loans, related party loans and leasing obligations that aggregated $9,821,969 as of September 30, 2025, as

compared to $9,788,224 as of September 30, 2024.

Gain on Derivative Liability

5 unchanged sentences

The change in fair value of derivative liability

for the three months ended June 30, 2025 and 2024 was a gain of $795 and $15, respectively.

As a result of the above factors, net loss was

$1,951,826 for the quarter ended June 30, 2025, representing a decrease of $1,874,079, or 2410.48%, from $77,747 for the quarter ended

June 30, 2024.

Comparison of the Six Months Ended June 30,

for the three months ended September 30, 2025 and 2024 was a gain of $303 and $2, respectively.

As a result of the factors discussed above, net

loss was $1,448,247 for the quarter ended September 30, 2025, representing a decrease of loss of $525,699, or 26.63%, from $1,973,946

for the quarter ended September 30, 2024.

Comparison of the Nine months ended September

30, 2025 and 2024

Revenue for the six months ended June 30, 2025

Revenue for the nine months ended September 30,

2025 was $61,293,251, representing an increase of $3,098,122, or 5.32%, from $58,195,129 for the same period in the previous year.

mainly due to the increase in sales volume of CMP, partially offset by decreased ASPs of CMP products.

was mainly due to the increase in sales volume of CMP, partially offset by the decrease in ASPs of CMP products.

Revenue of Offset Printing Paper, Corrugating

1 unchanged sentence

Revenue from sales of offset printing paper, CMP

and tissue paper products for the six months ended June 30, 2025 was $35,691,907, an increase of $2,652,292, or 8.03%, from $33,039,615

for the six months ended June 30, 2024.

This was mainly due to the increase in sales volume of CMP, partially offset by the decrease in

The total quantities of offset printing paper, CMP and tissue paper products sold during the six months ended June 30, 2025

amounted to 105,795 tonnes, an increase of 11,761 tonnes, or 12.51%, compared to 94,034 tonnes sold during the six months ended June 30,

Production of offset printing paper and tissue paper products was suspended from 2024 through the first half of 2025 and is expected

to resume in the second half of 2025.

The changes in revenue and quantity sold for the six months ended June 30, 2025 and 2024 is summarized

Six Months Ended

June 30, 2025

June 30, 2024

and tissue paper products for the nine months ended September 30, 2025 was $61,293,251, an increase of $3,209,261, or 5.53%, from $58,083,990

for the nine months ended September 30, 2024.

This was mainly due to the increase in sales volume of CMP, partially offset by the decrease

in ASPs of CMP.

Total quantities of offset printing paper, CMP and tissue paper products sold during the nine months ended September 30,

2025 amounted to 181,482 tonnes, an increase of 12,563 tonnes, or 7.44%, compared to 168,919 tonnes sold during the nine months ended

September 30, 2024.

Production of offset printing paper and tissue paper products was suspended from 2024 through September 2025 and is

expected to resume at the end of 2025.

The changes in revenue and quantity sold for the nine months ended September 30, 2025 and 2024

are summarized as follows:

Nine Months Ended

September 30, 2025

September 30, 2024

Sales Revenue

Quantity (Tonne)

Light-Weight CMP

2 unchanged sentences

Total CMP, Offset Printing Paper and Tissue Paper Revenue

ASPs for our main products in the six-month period

ended June 30, 2025 and 2024 is summarized as follows:

Six Months Ended June 30, 2025

Six Months Ended June 30, 2024

ASPs for our main products in the nine-month period

ended September 30, 2025 and 2024 is summarized as follows:

Offset Printing

Nine Months Ended September 30, 2025

Nine Months Ended September 30, 2024

Decrease from comparable period in the previous year

2 unchanged sentences

Total cost of sales for CMP, offset printing paper

and tissue paper products in the six months ended June 30, 2025 was $34,334,076, an increase of $4,885,123, or 16.59%, from $29,448,953

for the six months ended June 30, 2024.

This was mainly due to the increase in sales volume and the increase in unit material costs of

and tissue paper products in the nine months ended September 30, 2025 was $57,913,574, an increase of $5,300,786, or 10.08%, from $52,612,788

for the nine months ended September 30, 2024.

This was mainly due to the increase in sales volume and the increase in unit material costs

The cost of sales for CMP was $57,913,574 for

the six months ended June 30, 2025, compared to $29,448,953 in the same period of 2024.

The increase of $4,885,123 for CMP was mainly

due to the increase in quantities of CMP sold and in the average cost of sales in the first six months of 2025.

The average cost of sales

per tonne for CMP increased by 3.83%, from $313 for the six months ended June 30, 2024, to $325 in the same period of 2025.

cost of sales and cost per tonne by product for the six months ended June 30, 2025 and 2024 are summarized below:

Six Months Ended

June 30, 2025

June 30, 2024

Change in percentage

Cost of Sales

Cost per Tonne

Cost of Sales

Cost per tonne

Cost of Sales

Cost per Tonne

Cost of Sales

Cost per Tone

the nine months ended September 30, 2025, as compared to $52,612,788 in the same period of 2024.

The increase in the cost of sales of

$5,300,786 for CMP was mainly due to the increase in the quantities of CMP sold and the increase in average cost of sales in the nine

months of 2025.

The average cost of sales per tonne for CMP increased by 2.57%, from $311 for the nine months ended September 30, 2024,

to $319 in the same period of 2025.

Changes in cost of sales and cost per tonne by product for the nine months ended September 30, 2025

and 2024 are summarized below:

Nine Months Ended

September 30, 2025

September 30, 2024

Light-Weight CMP

2 unchanged sentences

Total CMP, Offset Printing Paper and Tissue Paper Revenue

Gross profit for the six months ended June 30,

2025 was $1,357,831 (representing 3.80% of total revenue), representing a decrease of $2,306,582, or 62.95%, from $3,664,413 (representing

11.07% of total revenue) for the six months ended June 30, 2024.

The decrease was mainly due to the decline in ASPs of CMP and increased

unit cost of materials, partially offset by the increase in sales volume of CMP.

Gross profit for the nine months ended September

30, 2025 was $3,379,677 (representing 5.51% of the total revenue), representing a decrease of $2,202,117, or 39.45%, from the gross profit

of $5,581,794 (representing 9.59% of the total revenue) for the nine months ended September 30, 2024.

The decrease was mainly due to the

decline in ASPs of CMP and the increase in unit cost of materials, partially offset by the increase in sales volume of CMP.

Offset Printing Paper, CMP and Tissue Paper

Gross profit for offset printing paper, CMP and

tissue paper products for the six months ended June 30, 2025 was $1,357,831, a decrease of $2,232,831, or 62.18%, from the gross profit

of $3,590,662 for the six months ended June 30, 2024.

tissue paper products for the nine months ended September 30, 2025 was $3,379,677, a decrease of $2,091,525, or 38.23%, from the gross

profit of $5,471,202 for the nine months ended September 30, 2024.

The decrease was mainly the result of the factors discussed above.

The overall gross profit margin for offset printing

paper, CMP and tissue paper products decreased by 7.07 percentage points, from 10.87% for the six months ended June 30, 2024, to 3.80%

for the six months ended June 30, 2025.

paper, CMP and tissue paper products decreased by 3.91 percentage points, from 9.42% for the nine months ended September 30, 2024, to

5.51% for the nine months ended September 30, 2025.

The gross profit margin for regular CMP for the

six months ended June 30, 2025 was 3.97%, or 6.89 percentage points lower, as compared to the gross profit margin of 10.86% for the six

months ended June 30, 2024.

This decrease was primarily due to the decrease in ASP and the increase in material costs of regular CMP.

nine months ended September 30, 2025 was 5.61%, or 3.83 percentage points lower, as compared to gross profit margin of 9.44% for the nine

months ended September 30, 2024.

This decrease was primarily due to the decrease in ASP and the increase in material costs of regular

The gross profit margin for light-weight CMP for

the six months ended June 30, 2025 was 2.93%, or 7.97 percentage points lower, compared to the gross profit margin of 10.90% for the six

months ended June 30, 2024.

the nine months ended September 30, 2025 was 5.02%, or 4.31 percentage points lower, as compared to gross profit margin of 9.33% for the

nine months ended September 30, 2024.

This decrease was primarily due to the decrease in ASP and the increase in material costs of light-weight

1 unchanged sentence

Selling, general and administrative expenses for

the six months ended June 30, 2025 were $6,498,096, a decrease of $120,235, or 1.82% from $6,618,331 for the six months ended June 30,

The decrease was mainly due to lower manpower costs and reduced depreciation of idle fixed assets during the production suspension.

the nine months ended September 30, 2025 were $9,516,283, a decrease of $483,550, or 4.84% from $9,999,833 for the nine months ended September

The decrease was mainly due to lower manpower costs in the nine months ended September 30 2025 and accrued liability of $0.47

million for legal proceeding the Company was jointly liable for repayment of a loan in the third quarter of 2024.

Loss from Operations

Operating loss for the six months ended June 30,

2025 was $5,140,265, a decrease of $2,186,347, or 74.02%, from $2,953,918 for the six months ended June 30, 2024.

The decrease was primarily

due to the decrease in gross profit, partially offset by the decrease in selling, general and administrative expenses.

Operating loss for the nine months ended September

30, 2025 was $6,132,897, an increase of loss of $1,714,858, or 38.81%, from $4,418,039 for the nine months ended September 30, 2024.

increase was primarily due to the decrease in gross profit, partially offset by the decrease in selling, general and administrative expenses.

Other Income and Expenses

Interest expense for the six months ended June

30, 2025 decreased by $145,023, from $421,841 for the six months ended June 30, 2024, to $276,818.

The Company had short-term and long-term

interest-bearing loans that aggregated $9,749,113 as of June 30, 2025, as compared to $12,149,914 as of June 30, 2024.

Interest expense for the nine months ended September

30, 2025 decreased by $165,751, from $593,271 for the nine months ended September 30, 2024, to $427,520.

The Company had short-term and

long-term interest-bearing loans and lease obligations that aggregated $9,821,969 as of September 30, 2025, as compared to $9,788,224

as of September 30, 2024.

Gain on Derivative Liability

5 unchanged sentences

The change in fair value of derivative liability

for the six months ended June 30, 2025 and 2024 was a gain of $5,348 and $49, respectively.

for the nine months ended September 30, 2025 and 2024 was a gain of $5,651 and $51, respectively.

As a result of the above, net loss was $6,903,858

for the six months ended June 30, 2025, representing a decrease of $1,631,328, or 42.66%, from $3,824,283 for the six months ended June

for the nine months ended September 30, 2025, representing an increase of loss of $1,105,629, or 19.07%, from $5,798,229 for the nine

months ended September 30, 2024.

Liquidity and Capital Resources

As of June 30, 2025, we had current assets of

$32,644,518 (including a VAT（“Value-Added Tax”） recoverable of Tengsheng Paper in the amount of $13,209,135),

As of September 30, 2025, we had current assets

of $35,764,365 (including a VAT （“Value Added Tax “）recoverable of Tengsheng Paper in amount of $13,307,848),

and current liabilities of $18,667,302, resulting in a working capital of $17,097,063.

However, the production of Baoding Shende was suspended

in 2024 and the first half of 2025, rendering the related VAT unrecoverable in the short term.

Net working capital excluding VAT recoverable

as of June 30, 2025 was a working capital deficit of $1,906,169.

Baoding Shengde and Tengsheng Paper have incurred losses, raising doubt

about these subsidiaries’ ability to continue as going concerns.

The main reasons for these losses were high depreciation costs,

decreased market demand, and elevated material costs.

Our future sustainability depends on our ability to generate cash from our operational

endeavors and secure additional capital to fund ongoing activities.

Should we fail to secure necessary funding, we may be unable to realize

our assets and discharge our liabilities in the normal course of business.

However, production of Tengsheng Paper has been

suspended in 2024 and the nine months ended September 30, 2025, rendering related VAT unrecoverable in the short term.

Net working capital

excluding VAT recoverable as of September 30, 2025 was a working capital of $3,789,215.

Baoding Shengde and Tengsheng Paper have incurred

loss that there is doubt about these subsidiaries’ ability to continue as going concerns.

The main reason of losses was due to high

depreciation costs, decreased market demand, and elevated material costs.

Therefore, there was a substantial doubt about the ability of

us to continue as a going concern that we may be unable to realize its assets and discharge its liabilities in the normal course of business

as of September 30, 2025.

To address these challenges, we plan to optimize

12 unchanged sentences

Net accounts receivable increased by $1,791,614,

or 540.18%, to $1,841,007 as of June 30, 2025, compared with $287,576 as of December 31, 2024.

or 623.01%, to $2,079,190 as of September 30, 2025, as compared with $287,576 as of December 31, 2024.

We usually collect accounts receivable

1 unchanged sentence

Inventories consist of raw materials (accounting

for 74.7% of the total inventory value as of June 30, 2025), semi-finished goods and finished goods.

As of June 30, 2025, the recorded

value of inventory increased by 116.6% to $5,094,810 from $2,351,876 as of December 31, 2024.

As of June 30, 2025, the inventory of recycled

paper board, which is the main raw material for the production of CMP, was $3,688,955, approximately $2,335,412, or 172.54%, higher than

the balance as of December 31, 2024.

In May and June 2025, we increased our procurement volume of recycled paper board in anticipation

of rising purchase prices and to prepare for expanded production output as planned for the upcoming quarter.

for 70.5% of total value of inventory as of September 30, 2025), semi-finished goods and finished goods.

As of September 30, 2025, the

recorded value of inventory increased by 65.8% to $3,899,571 from $2,351,876 as of December 31, 2024.

As of September 30, 2025, the inventory

of recycled paper board, which is the main raw material for the production of CMP, was $2,630,267, approximately $1,276,724, or 94.3%,

higher than the balance as of December 31, 2024.

We increased our procurement volume of recycled paper board in 2025 in anticipation of

rising purchase prices and preparing for expanded production output as planned.

A summary of changes in major inventory items is as follows:

September 30,

Raw Materials

24 unchanged sentences

new tissue paper production line is expected to be launched after the completion of trial runs.

As of June 30, 2025, we had approximately $3.5

As of September 30, 2025, we had approximately

$3.5 million in capital expenditure commitments mainly related to the purchase of the PM 10 paper machine.

The infrastructure work for PM10

is complete, while work on related ancillary facilities is ongoing.

These commitments are expected to be financed by bank loans and cash

flows generated from our business operations.

The infrastructure work for

PM10 is complete, while work on related ancillary facilities is ongoing.

These commitments are expected to be financed by bank loans and

cash flows generated from our business operations.

Cash and Cash Equivalents

Our cash, cash equivalents and restricted cash

as of June 30, 2025 totaled $7,509,355, an increase of $558,779 from $6,950,576 as of December 31, 2024.

The increase in cash and cash

equivalents for the six months ended June 30, 2025 was attributable to several factors including:

as of September 30, 2025 was $9,119,707, an increase of $2,169,131, from $6,950,576 as of December 31, 2024.

The increase of cash and

cash equivalents for the nine months ended September 30, 2025 was attributable to a number of factors including:

Net cash provided by operating activities

Net cash used in operating activities was $1,111,313

for the six months ended June 30, 2025.

The balance represented a decrease in cash of $2,457,650, or 182.54%, compared to net cash provided

by operating activities of $1,346,337 for the six months ended June 30, 2024.

Net loss for the six months ended June 30, 2025 was $5,455,611,

representing a decrease of $1,631,328, or 42.66%, from $3,824,283 for the six months ended June 30, 2024.

Net cash provided by operating activities was

$388,450 for the nine months ended September 30, 2025.

The balance represented a decrease of cash of $2,442,661, or 86.28%, from $2,831,111

provided for the nine months ended September 30, 2024.

Net loss for the nine months ended September 30, 2025 was $6,903,85, representing

an increase of loss of $1,105,629, or 19.07%, from $5,798,229 for the nine months ended September 30, 2024.

Changes in various asset and

liability account balances during the six months ended June 30, 2025 also contributed to the net change in cash from operating activities

in six months ended June 30, 2025.

Chief among such changes were an increase in accounts receivable of $1,579,675 during the six months

of 2025, an increase of $2,694,397 in the ending inventory balance as of June 30, 2025 (a decrease to net cash for the six months ended

June 30, 2025 cash flow purposes), non-cash expenses for depreciation and amortization of $7,090,582, a decrease of $860,449 in prepayment

and other current assets (an increase to net cash) and a net increase of $816,287 in other payables and accrued liabilities and related

parties (an increase to net cash), and a decrease in income tax payable of $81,025 (a decrease to net cash) during the six months ended

June 30, 2025.

liability account balances throughout the nine months ended September 30, 2025 also contributed to the net change in cash from operating

activities in nine months ended September 30, 2025.

Chief among such changes is the increase of accounts receivable in the amount of $1,811,293

during the nine months of 2025, an increase of $1,477,521 in the ending inventory balance as of September 30, 2025 (a decrease to net

cash for the nine months ended September 30, 2025 cash flow purposes) , non-cash expenses relating to depreciation and amortization in

the amount of $10,664,999, an increase of $1,319,298 in prepayment and other current assets (a decrease to net cash) and a net increase

of $1,077,867 in other payables and accrued liabilities and related parties (an increase to net cash), as well as an increase in income

tax payable of $225,114 (an increase to net cash) during the nine months ended September 30, 2025.

Net cash used in investing activities

We incurred $25,786 in net cash expenditures for

purchases of property, plant and equipment during the six months ended June 30, 2025, as compared to $62,640 for the same period in 2024.

purchases of property, plant and equipment during the nine months ended September 30, 2025, as compared to $315,152 for the same period

Net cash provided by financing activities

Net cash provided by financing activities was

$1,648,262 for the six months ended June 30, 2025, compared to $422,096 for the same period in 2024.

The cash inflow was mainly attributable

to proceeds from the issuance of common stock in May 2025 and from short term bank loans.

$1,649,855 for the nine months ended September 30, 2025, compared to net cash used in financing activities of $2,112,706 for the same

period in 2024.

The cash inflow was mainly attributable to proceeds from the issuance of common stock in May 2025 and from short term

Short-term Bank Loans

September 30,

Rural Credit Union of Xushui District Loan 1

Rural Credit Union of Xushui District Loan 2

Rural Credit Union of Xushui District Loan 3

Rural Credit Union of Xushui District Loan 4

Bank of Cangzhou Loan 1

4 unchanged sentences

On December 24, 2024, the Company entered into

a loan agreement with the Rural Credit Union of Xushui District, with a balance of $1,815,998 and $1,808,469 as of June 30, 2025 and December

a loan agreement with the Rural Credit Union of Xushui District, with a balance of $nil and $1,808,469 as of September 30, 2025 and December

31, 2024, respectively.

The loan is secured by the equipment of Baoding Shengde as collateral for the benefit of the bank.

The loan bears

a fixed rate of 6% and will be due by December 23, 2025.

The loan was secured by the equipment of Baoding Shengde as collateral for the benefit of the bank.

The loan bore

a fixed rate of 6%.

The loan was repaid on September 30, 2025.

On December 24, 2024, the Company entered into

a loan agreement with the Rural Credit Union of Xushui District, with a balance of $2,235,074 and $2,225,808 as of June 30, 2025 and December

a loan agreement with the Rural Credit Union of Xushui District, with a balance of $nil and $2,225,808 as of September 30, 2025 and December

31, 2024, respectively.

The loan is secured by the equipment of Baoding Shengde as collateral for the benefit of the bank and guaranteed

The loan was secured by the equipment of Baoding Shengde as collateral for the benefit of the bank and guaranteed

by a third-party company.

The loan bears a fixed rate of 6% and will be due by December 23, 2025.

The loan bore a fixed rate of 6%.

The loan was repaid on September 30, 2025.

On September 30, 2025, the Company entered into a loan agreement with

the Rural Credit Union of Xushui District, with a balance of $1,829,569 as of September 30, 2025.

The loan is guaranteed by Mr.

and secured by the equipment of Baoding Shengde as collateral for the benefit of the bank.

The loan bears a fixed rate of 6% and will

be due by September 29, 2026.

On September 30, 2025, the Company entered into a loan agreement with

the Rural Credit Union of Xushui District, with a balance of $2,251,777 as of September 30, 2025.

The loan is secured by the equipment

of Baoding Shengde as collateral for the benefit of the bank and guaranteed by a third party company.

The loan bears a fixed rate of 6%

and will be due by September 29, 2026.

On December 28, 2024, the Company entered into

15 unchanged sentences

On June 11, 2024, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $nil and $2,782 as of June 30, 2025 and December 31, 2024, respectively.

bore a fixed interest rate of 3.45% per annum.

capital loan agreement with the ICBC, with a balance of $nil and $2,782 as of September 30, 2025 and December 31, 2024, respectively.

The loan bore a fixed interest rate of 3.45% per annum.

The loan was repaid on June 10, 2025.

On June 21, 2024, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $ nil and $139,113 as of June 30, 2025 and December 31, 2024, respectively.

loan bore a fixed interest rate of 3.45% per annum.

The loan was repaid on June 3, 2025.

capital loan agreement with the ICBC, with a balance of $nil and $139,113 as of September 30, 2025 and December 31, 2024, respectively.

The loan bore a fixed interest rate of 3.45% per annum.

The loan is was repaid on June 3, 2025.

On June 22, 2024, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $ nil and $139,113 as of June 30, 2025 and December 31, 2024, respectively.

loan bore a fixed interest rate of 3.45% per annum.

capital loan agreement with the ICBC, with a balance of $nil and $139,113 as of September 30, 2025 and December 31, 2024, respectively.

The loan bore a fixed interest rate of 3.45% per annum.

The loan was repaid on June 10, 2025.

On June 24, 2024, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $ nil and $136,331 as of as of June 30, 2025 and December 31, 2024, respectively.

capital loan agreement with the ICBC, with a balance of $nil and $136,331 as of as of September 30, 2025 and December 31, 2024, respectively.

The loan bore a fixed interest rate of 3.45% per annum.

1 unchanged sentence

On June 10, 2025, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $2,794 as of June 30, 2025.

The loan bears a fixed interest rate of 3.00% per

capital loan agreement with the ICBC, with a balance of $2,815 as of September 30, 2025.

The loan bears a fixed interest rate of 3.00%

The loan is due for repayment by June 10, 2026.

On June 3, 2025, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $139,692 as of June 30, 2025.

The loan bears a fixed interest rate of 3.00% per

capital loan agreement with the ICBC, with a balance of $140,736 as of September 30, 2025.

The loan bears a fixed interest rate of 3.00%

The loan is due for repayment by June 3, 2026.

On June 10, 2025, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $139,692 as of June 30, 2025.

The loan bears a fixed interest rate of 3.00% per

capital loan agreement with the ICBC, with a balance of $140,736 as of September 30, 2025.

The loan bears a fixed interest rate of 3.00%

The loan is due for repayment by June 10, 2026.

On June 9, 2025, the Company entered into a working

capital loan agreement with the ICBC, with a balance of $136,898 as of June 30, 2025.

The loan bears a fixed interest rate of 3.00% per

capital loan agreement with the ICBC, with a balance of $137,921 as of September 30, 2025.

The loan bears a fixed interest rate of 3.00%

The loan is due for repayment by June 9, 2026.

As of June 30, 2025, guaranteed short-term borrowings

totaled $2,821,781, and unsecured bank loans were $419,076.

As of December 31, 2024, these figures were $2,225,808 and $417,339, respectively.

As of September 30, 2025, there were guaranteed

short-term borrowings of $4,672,437 and unsecured bank loans of $422,208.

As of December 31, 2024, there were guaranteed short-term borrowings

of $2,225,808 and unsecured bank loans of $417,339.

The average short-term borrowing rates for the

three months ended June 30, 2025 and 2024 were approximately 5.72% and 4.45%, respectively.

For the six months ended June 30, 2025 and

2024, the rates were approximately 5.73% and 4.46%, respectively.

three months ended September 30, 2025 and 2024 were approximately 5.71% and 4.47%, respectively.

The average short-term borrowing rates

for the nine months ended September 30, 2025 and 2024 were approximately 5.72% and 4.47%, respectively.

Long-term Loans

As of June 30, 2025 and December 31, 2024, long-term

loans were $4,692,258 and $4,672,806, respectively.

As of September 30, 2025 and December 31, 2024,

long-term loans were $4,727,324 and $4,672,806, respectively.

On July 15, 2013, the Company entered into a loan

1 unchanged sentence

from December 21, 2013 to July 26, 2018.

On June 21, 2018, the loan was extended for an additional five years to mature in various installments

from December 21, 2018 to June 20, 2023.

On August 24, 2023, the loan was extended for another three years, now due and payable on August

The loan is secured by certain of the Company’s manufacturing equipment with a net book value of $nil as of June 30, 2025

and December 31, 2024.

Interest payment is due monthly and originally bore a rate of 7.68% per annum.

On June 21, 2018, the loan was extended for additional 5 years and was due and payable in various

installments from December 21, 2018 to June 20, 2023.

On August 24, 2023, the loan was extended for another 3 years and will be due and

payable on August 24, 2026.

The loan is secured by certain of the Company’s manufacturing equipment with net book value of $nil

as of September 30, 2025 and December 31, 2024.

Interest payment is due monthly and bore a rate of 7.68% per annum.

Effective from November

15, 2022, the interest rate was reduced to 7% per annum.

Effective from December 3, 2024, the interest rate was further reduced to 6% per annum.

As of June 30, 2025 and December 31, 2024, the total outstanding loan balance was $3,490,906 and $3,476,434.

Out of the total outstanding

loan balance, current portion amounted was $2,652,753 and $2,641,756, which is presented as current liabilities in the consolidated balance

sheet and the remaining balance of $838,153 and $834,678 is presented as non-current liabilities in the consolidated balance sheet as

of June 30, 2025 and December 31, 2024, respectively.

Effective from December 3, 2024, the interest rate was reduced to 6% per annum.

The loan was fully repaid on August 15, 2025.

As of September 30, 2025 and December 31, 2024, the total outstanding loan balance was $nil

and $3,476,434.

Out of the total outstanding loan balance, current portion amounted was $nil and $2,641,756, which is presented as current

liabilities in the consolidated balance sheet and the remaining balance of $nil and $834,678 is presented as non-current liabilities in

the consolidated balance sheet as of September 30, 2025 and December 31, 2024, respectively.

On December 5, 2023, the Company entered into

a loan agreement with the Rural Credit Union of Xushui District for a term of three years, due in various installments from June 21, 2024

a loan agreement with the Rural Credit Union of Xushui District for a term of 3 years, which is due in various installments from June

21, 2024 to December 5, 2026.

The loan is guaranteed by an independent third party.

Interest payment is due monthly and bears a rate of 7% per

Interest payment is due monthly and bears a rate of

7% per annum.

Effective from December 3, 2024, the interest rate was reduced to 6% per annum.

As of June 30, 2025 and December 31, 2024, total

outstanding loan balance was $1,201,352 and $1,196,372, respectively.

Out of the total outstanding loan balance, current portion amounted

$921,968 and $918,146, which is presented as current liabilities and the remaining balance of $279,384 and $278,226 is presented as non-current

liabilities in the consolidated balance sheet as of June 30, 2025 and December 31, 2024, respectively.

Total interest expense for short-term and long-term

loans for the three months ended June 30, 2025 and 2024 was $143,971 and $211,551, respectively.

For the six months ended June 30, 2025

and 2024, it was $276,818 and $421,841, respectively.

The loan was fully repaid on August 15,

As of September 30, 2025 and December 31, 2024, total outstanding loan balance was $nil and $1,196,372, respectively.

total outstanding loan balance, current portion amounted $nil and $918,146, which is presented as current liabilities and the remaining

balance of $nil and $278,226 is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2025 and December

31, 2024, respectively.

On August 15, 2025, the Company entered into a

loan agreement with the Rural Credit Union of Xushui District for a term of 3 years, which is due and payable on August 14, 2028.

loan is secured by certain of the Company’s manufacturing equipment with net book value of $nil as of September 30, 2025.

payment is due monthly and bore a rate of 6% per annum.

As of September 30, 2025, the total outstanding loan balance was $3,516,994, which

is presented as non-current liabilities in the consolidated balance sheet as of September 30, 2025.

On August 15, 2025, the Company entered into a

loan agreement with the Rural Credit Union of Xushui District for a term of 3 years, which is due and payable on August 14, 2028.

loan is guaranteed by an independent third party.

Interest payment is due monthly and bore a rate of 6% per annum.

As of September 30,

2025, the total outstanding loan balance was $1,210,330, which is presented as non-current liabilities in the consolidated balance sheet

as of September 30, 2025.

Total interest expenses for the short-term bank

loans and long-term loans for the three months ended September 30, 2025 and 2024 were $150,701 and $171,430, respectively.

Total interest

expenses for the short-term bank loans and long-term loans for the nine months ended September 30, 2025 and 2024 were $427,520 and $593,271,

respectively.

Shareholder Loans

9 unchanged sentences

Liu Zhenyong, which were recorded in other payables and accrued liabilities as part of the

current liabilities in the consolidated balance sheet as of June 30, 2025 and December 31, 2024, respectively.

current liabilities in the consolidated balance sheet as of September 30, 2025 and December 31, 2024, respectively.

On December 10, 2014, Mr.

4 unchanged sentences

would be originally due on December 10, 2017.

During the year of 2016, the Company repaid $6,012,416 to Mr.

Liu Zhenyong, together with

interest of $288,596.

During the year 2016, the Company repaid $6,012,416 to Mr.

Liu Zhenyong, together with interest

In February 2018, the company paid off the remaining balance, together with interest of $20,400.

As of June 30,

As of September 30, 2025

and December 31, 2024, approximately $42,221 and $41,734 of interest were outstanding to Mr.

Liu Zhenyong, which was recorded in

other payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

Liu Zhenyong, which was recorded in other

payables and accrued liabilities as part of the current liabilities in the consolidated balance sheet.

On March 1, 2015, the Company entered an agreement

15 unchanged sentences

paid off the remaining balance, together with interest of 94,636.

As of June 30, 2025 and December 31, 2024, the outstanding interest

As of September 30, 2025 and December 31, 2024, the outstanding interest

was $193,424 and $191,193, respectively, which was recorded in other payables and accrued liabilities as part of the current liabilities

in the consolidated balance sheet.

As of June 30, 2025 and December 31, 2024, there

were no loans outstanding to Mr.

Liu Zhenyong .

The interest expense incurred for such related party loans was $nil for the three and

six months ended June 30, 2025 and 2024.

Net interest owed to Mr.

Liu Zhenyong was approximately $305,868 and $304,600, as of June 30,

2025 and December 31, 2024, respectively, which was recorded in other payables and accrued liabilities.

In October 2022 and November 2022, the Company

entered into two agreements with Mr.

Liu, allowing him to borrow a total of $7,059,455 (RMB50,000,000) from the Company.

The loans were

unsecured and carried a fixed interest rate of 4.35% per annum.

Zhenyong Liu, which allowed Mr.

Liu Zhenyong to borrow from the Company an amount of $7,059,455 (RMB50,000,000)

The loans were unsecured and carried a fixed interest rate of 4.35% per annum.

$4,235,673 (RMB30,000,000) was repaid by Mr.

Liu Zhengyong in August 2023

and the remaining balance was repaid in December 2023.

Interest income of the loan for the three and six months ended June 30, 2025 and

2024 were $nil.

As of June 30, 2025 and December 31, 2024, amount

Liu Zhenyong were $119,974 and $1,242, respectively, .

This mainly represents funds from Mr.

Liu Zhengyong in August 2023 and the remaining balance was repaid in December 2023.

Interest income of the loan for the three and nine

months ended September 30, 2025 and 2024 were $nil.

As of September 30, 2025 and December 31, 2024,

total amount of loans due to Mr.

Liu Zhenyong was $nil.

The interest expense incurred for such related party loans were $nil for the three

and nine months ended September 30, 2025 and 2024.

The net interest owed to Mr.

Liu Zhenyong was approximately $308,154 and $304,600,

as of September 30, 2025 and December 31, 2024, respectively, which was recorded in other payables and accrued liabilities.

As of September 30, 2025 and December 31, 2024,

amount due to Mr.

Liu Zhenyong was $189,948 and $1,242, respectively, which mainly represents funds from Mr.

Liu Zhenyong to pay for various

expenses incurred in the U.S.

The amount is due on demand and is interest free.

The amount is due on demand with interest free.

Critical Accounting Policies and Estimates

22 unchanged sentences

policy toward operating efficiency of the Chinese paper manufacturing industry.

For the six months ended June 30, 2025 and 2024, no events

or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

We are currently not aware

of any events or circumstances that may indicate any need to record such impairment in the future.

For the nine months ended September 30, 2025 and 2024,

no events or circumstances occurred for which an evaluation of the recoverability of long-lived assets was required.

We are currently

not aware of any events or circumstances that may indicate any need to record such impairment in the future.

Foreign Currency Translation

4 unchanged sentences

The current exchange rates used by the Company

as of June 30, 2025 and December 31, 2024 to translate the Chinese RMB to the U.S.

as of September 30, 2025 and December 31, 2024 to translate the Chinese RMB to the U.S.

Dollars are 7.1055:1 and 7.1884:1, respectively.

and expenses are translated using the prevailing average exchange rates at 7.1778:1 and 7.1074:1 for the six months ended June 30, 2025

Revenues and expenses are translated using the prevailing average exchange rates at 7.1583:1 and 7.0999:1 for the nine months ended September

30, 2025 and 2024, respectively.

6 unchanged sentences

This helps us to maintain a good relationship with the supplier and negotiate

for better terms in payment for materials.

better terms in payment for materials.

If Huanrun Trading Co.

were to become insolvent, the Company could be materially adversely

were to become insolvent, the Company could be materially adversely affected.

Except as aforesaid, we have no material off-balance sheet transactions.

26 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis