SHANGHAI, July 7, 2025 /PRNewswire/ -- Eshallgo Inc. (Nasdaq: EHGO), a leading provider of integrated office solutions in China, today announced that its wholly owned subsidiary, Shanghai ESHALLGO Enterprise Development (Group) Co., Ltd. ("ESHALLGO Group"), has entered into a nationwide strategic partnership agreement (the "Agreement") with Tianjin Photonetco Electronic Technology Co., Ltd. ("Photonetco"), one of China's top three office equipment manufacturers.The Agreement appoints EHGO as Photonetco's ex ...

Financial Statements [Condensed Consolidated Balance Sheets](index=1&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of September 30, 2024, Eshallgo Inc reported total assets of $23.7 million, an increase from $19.7 million on March 31, 2024, driven by growth in current assets, while total equity rose to $20.3 million Key Balance Sheet Items (in USD) | Balance Sheet Item | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $21,276,083 | $18,073,568 | | **Total Assets** | $23,711,265 | $19,686,668 | | **Total Current Liabilities** | $3,201,774 | $2,385,578 | | **Total Liabilities** | $3,362,611 | $2,578,802 | | **Total Equity** | $20,348,654 | $17,107,866 | [Unaudited Condensed Consolidated Statements of Income (Loss) and Comprehensive Loss](index=3&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20%28LOSS%29%20AND%20COMPREHENSIVE%20LOSS) For the six months ended September 30, 2024, the company reported a net loss of $3.0 million, a sharp downturn from a net income of $481,770 in the prior year period due to lower revenue and higher operating expenses Income Statement Comparison (Six Months Ended September 30) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | **Total Revenue** | $6,712,478 | $8,283,330 | | **Gross Profit** | $1,576,346 | $2,218,896 | | **Income (Loss) from Operations** | ($3,012,363) | $498,609 | | **Net Income (Loss)** | ($3,003,132) | $481,770 | | **Net Income (Loss) Attributable to Eshallgo Inc** | ($3,159,118) | $180,242 | | **Earnings (loss) per common share - basic and diluted** | ($0.15) | $0.01 | [Unaudited Condensed Consolidated Statements of Changes in Equity](index=4&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY) Total equity increased from $17.1 million to $20.3 million, primarily driven by the issuance of Class A Ordinary Shares for cash and services, which added approximately $5.9 million, partially offset by a net loss - Issuance of **1,250,000 Class A Ordinary Shares** for cash, raising **$3.82 million** in additional paid-in capital[7](index=7&type=chunk) - Issuance of Class A Ordinary Shares for services, adding **$2.08 million** to additional paid-in capital[7](index=7&type=chunk) - A net loss of **$3.16 million** reduced retained earnings[7](index=7&type=chunk) - A foreign currency translation gain of **$305,987** improved accumulated other comprehensive income[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended September 30, 2024, the company had a net cash outflow from operations of $3,310, but strong financing inflows of $4.3 million from its IPO offset increased investing outflows Cash Flow Summary (Six Months Ended September 30) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | ($3,310) | $351,474 | | **Net cash used in investing activities** | ($4,740,236) | ($1,163,819) | | **Net cash provided by financing activities** | $4,262,523 | $102,817 | | **Net decrease in cash, cash equivalents and restricted cash** | ($379,958) | ($973,505) | - The primary source of financing cash flow was the **$4.44 million net proceeds from the initial public offering**[8](index=8&type=chunk) - The ending balance of cash, cash equivalents, and restricted cash was **$4,982,143** as of September 30, 2024[9](index=9&type=chunk) Notes to Unaudited Condensed Consolidated Financial Statements [Note 1: Organization and Business Description](index=7&type=section&id=NOTE%201%20%E2%80%94%20ORGANIZATION%20AND%20BUSINESS%20DESCRIPTION) Eshallgo Inc, a Cayman Islands holding company, operates in the PRC through a VIE structure to engage in the sales, leasing, and maintenance of office equipment, which poses regulatory risks - The company is engaged in the sales, leasing, and maintenance of office equipment in the PRC[10](index=10&type=chunk) - The company operates through a **VIE structure**, where contractual arrangements give it control over its main PRC operating entities (Junzhang Shanghai and Junzhang Beijing)[18](index=18&type=chunk)[20](index=20&type=chunk) - The VIE structure carries risks, as PRC authorities could challenge the legality of the contractual arrangements, potentially impacting the company's ability to operate and consolidate the VIEs[29](index=29&type=chunk)[32](index=32&type=chunk) VIE Financial Summary (as of Sept 30, 2024) | Metric | Amount (USD) | | :--- | :--- | | **Total Assets** | $19,799,875 | | **Total Liabilities** | $2,781,999 | | **Net Revenue (6-mo ended)** | $6,192,252 | | **Net Loss (6-mo ended)** | ($5,932) | [Note 2: Summary of Significant Accounting Policies](index=14&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The financial statements are prepared under U.S. GAAP, with key policies including revenue recognition under ASC 606, the CECL model for credit losses, and lease accounting under ASC 842 - The company is an **'emerging growth company'** and can delay the adoption of new or revised accounting standards[97](index=97&type=chunk) - Revenue is recognized based on a five-step model (**ASC 606**), with equipment sales recognized at a point in time and services/leasing recognized over time[68](index=68&type=chunk)[69](index=69&type=chunk) - The company adopted the **CECL model (ASU 2016-13)** to estimate expected credit losses on financial instruments like accounts receivable[46](index=46&type=chunk) Revenue Disaggregation (Six Months Ended) | Revenue Source | 2024 | 2023 | | :--- | :--- | :--- | | Sales of equipment | $5,480,454 | $6,475,899 | | Maintenance services | $595,531 | $1,078,065 | | Leasing of equipment | $632,556 | $722,601 | | **Total Revenue** | **$6,712,478** | **$8,283,330** | [Note 3: Accounts Receivable, Net](index=25&type=section&id=NOTE%203%20%E2%80%94%20ACCOUNTS%20RECEIVABLE%2C%20NET) Net accounts receivable decreased to $4.49 million as of September 30, 2024, from $4.97 million on March 31, 2024, while the allowance for credit losses increased Accounts Receivable, Net (in USD) | Component | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Accounts receivable | $4,691,466 | $5,100,595 | | Less: allowance for credit loss | ($201,252) | ($133,449) | | **Accounts receivable, net** | **$4,490,214** | **$4,967,146** | [Note 4: Long-Term Receivable, Net](index=26&type=section&id=NOTE%204%20%E2%80%94%20LONG-TERM%20RECEIVABLE%2C%20NET) The company holds two significant long-term receivables totaling over $1.18 million from a customer and a vendor, both bearing low interest rates and due in 2026 and 2027 respectively - A long-term accounts receivable from Shanghai Puli Printing Co, Ltd had an outstanding balance of **$171,643** as of Sept 30, 2024[105](index=105&type=chunk) - A long-term other receivable from vendor Shanghai Mingzhe Office Equipment Co, Ltd had an outstanding balance of **$1,015,392** as of Sept 30, 2024[106](index=106&type=chunk) [Note 5: Advance to Vendors, Net](index=26&type=section&id=NOTE%205%20%E2%80%94%20ADVANCE%20TO%20VENDORS%2C%20NET) Net advances to vendors decreased from $1.84 million to $1.37 million between March and September 2024, with a slight increase in the allowance for doubtful accounts Advance to Vendors, Net (in USD) | Component | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Prepayment for goods | $1,563,997 | $2,007,865 | | Less: allowance for doubtful accounts | ($199,780) | ($175,135) | | **Advance to vendors, net** | **$1,370,328** | **$1,837,209** | [Note 6: Inventories, Net](index=27&type=section&id=NOTE%206%20%E2%80%94%20INVENTORIES%2C%20NET) Net inventories, primarily consisting of purchased office equipment and parts, decreased to $1.80 million as of September 30, 2024, from $1.96 million at March 31, 2024 Inventories, Net (in USD) | Component | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Purchased office equipment for sale | $976,086 | $1,239,240 | | Equipment parts and supplies | $802,097 | $695,023 | | Less: inventory reserve | ($18,170) | ($19,830) | | **Inventories, net** | **$1,798,838** | **$1,963,166** | [Note 7: Prepaid Expenses and Other Current Assets, Net](index=27&type=section&id=NOTE%207%20%E2%80%94%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS%2C%20NET) Prepaid expenses and other current assets increased to $2.14 million, driven by a rise in short-term, interest-free loans to third parties and employees to $1.91 million - Loans to third parties and employees, used for short-term funding, increased to **$1,907,429** as of Sept 30, 2024, from $1,307,874 as of March 31, 2024[109](index=109&type=chunk) - Deferred IPO costs of **$433,007** present at March 31, 2024 were reclassified to equity upon the IPO's completion[109](index=109&type=chunk) [Note 8: Finance Receivables, Net](index=27&type=section&id=NOTE%208%20%E2%80%94%20FINANCE%20RECEIVABLES%2C%20NET) Net finance receivables from sales-type leases decreased to $157,284 as of September 30, 2024, from $197,525 on March 31, 2024, with the balance split between current and non-current portions Finance Receivables, Net (in USD) | Component | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Gross receivables | $171,712 | $216,648 | | Unearned income | ($9,919) | ($13,083) | | Provision for credit loss | ($4,509) | ($6,040) | | **Finance receivables, net** | **$157,284** | **$197,525** | [Note 9: Property and Equipment, Net](index=28&type=section&id=NOTE%209%20%E2%80%94%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) The net book value of property and equipment, primarily machinery and equipment on operating leases, decreased to $534,956, with a depreciation expense of $130,559 for the six-month period Property and Equipment, Net (in USD) | Category | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Machinery and equipment | $1,166,730 | $1,103,319 | | Less: accumulated depreciation | ($1,285,094) | ($1,121,136) | | **Property and equipment, net** | **$534,956** | **$599,831** | - Depreciation expense was **$130,559** for the six months ended September 30, 2024, compared to $244,439 for the same period in 2023[112](index=112&type=chunk) [Note 10: Accrued Expenses and Other Current Liabilities](index=28&type=section&id=NOTE%2010%20%E2%80%94%20ACCRUED%20EXPENSES%20AND%20OTHER%20CURRENT%20LIABILITIES) Accrued expenses and other current liabilities increased significantly to $412,696, mainly due to new liabilities for service fees payable and a refundable capital contribution Accrued Expenses Breakdown (in USD) | Component | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Customer security deposit | $65,811 | $71,333 | | Service fees payable | $44,930 | $— | | Refundable capital contribution | $124,022 | $— | | Others | $167,966 | $24,106 | | **Total** | **$412,696** | **$105,159** | [Note 11: Related Party Transactions](index=29&type=section&id=NOTE%2011%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) The company engages in extensive transactions with related parties, with balances due from these parties, including loans to officers, increasing substantially to $2.84 million - Due from related parties, which includes interest-free loans, increased significantly to **$2,843,715** as of Sept 30, 2024, from $366,761 as of March 31, 2024[119](index=119&type=chunk) Related Party Sales and Purchases (Six Months Ended Sept 30) | Transaction Type | 2024 | 2023 | | :--- | :--- | :--- | | Sales to related parties | $669,697 | $169,567 | | Purchases from related parties | $431,320 | $291,228 | [Note 12: Leases](index=32&type=section&id=NOTE%2012%20%E2%80%94%20LEASES) The company acts as both a lessee for office space, with lease liabilities of $365,367, and a lessor, generating $692,915 in lease income for the six-month period Lessee Lease Position (as of Sept 30, 2024) | Metric | Value | | :--- | :--- | | Operating lease right-of-use lease assets | $260,375 | | Total operating lease liabilities | $365,367 | | Weighted average remaining lease term | 2.83 years | | Weighted average discount rate | 4.16% | Lessor Lease Income (Six Months Ended Sept 30) | Income Component | 2024 | 2023 | | :--- | :--- | :--- | | Lease income - operating leases | $508,013 | $501,450 | | Variable lease income | $124,543 | $221,151 | | Revenue from sales type leases | $8,880 | $34,025 | | **Total Lease Income** | **$692,915** | **$858,683** | [Note 13: Concentrations](index=34&type=section&id=NOTE%2013%20%E2%80%94%20CONCENTRATIONS) The company faces significant concentration risks, with nearly all assets and revenues in the PRC, a majority of cash held in uninsured PRC bank accounts, and some vendor concentration - Substantial assets and revenues are located in the PRC, and a significant portion of cash (**$3.5 million** as of Sept 30, 2024) is held in PRC banks with no deposit insurance[130](index=130&type=chunk)[131](index=131&type=chunk)[134](index=134&type=chunk) - For the six months ended September 30, 2023, two vendors accounted for **15.8% and 10.3%** of total purchases[135](index=135&type=chunk) - As of September 30, 2024, one vendor accounted for **13.2%** of the total accounts payable balance[136](index=136&type=chunk) [Note 14: Short-Term Bank Loan](index=35&type=section&id=NOTE%2014%20%E2%80%94%20SHORT-TERM%20BANK%20LOAN) The company borrowed $30,755 from Webank for working capital at interest rates of 10.26% to 13.58%, and these loans have since been fully repaid - The company entered into loan agreements with Webank for RMB 215,740 (**$30,755**) with interest rates between **10.26% and 13.58%**, and the loans were fully repaid as of the report date[137](index=137&type=chunk) [Note 15: Taxes](index=15&type=section&id=NOTE%2015%20%E2%80%94%20TAXES) The company benefits from preferential tax rates in the PRC but maintains a significant valuation allowance of $510,571 against its deferred tax assets, indicating uncertainty about their future realization - PRC subsidiaries benefit from preferential tax rates (e.g, **15% for HNTE, 5% for small low-profit enterprises**) instead of the standard 25% EIT rate[141](index=141&type=chunk)[142](index=142&type=chunk) - The company has net operating loss carryforwards of approximately **$4.2 million**, which will expire between 2025 and 2033 if not used[146](index=146&type=chunk) - A valuation allowance of **$510,571** has been recorded against deferred tax assets, suggesting it is more likely than not that these assets will not be realized[145](index=145&type=chunk)[146](index=146&type=chunk) [Note 16: Shareholders' Equity](index=37&type=section&id=NOTE%2016%20%E2%80%94%20SHAREHOLDERS%27%20EQUITY) Shareholders' equity was impacted by a $5.0 million IPO, significant share-based compensation, and PRC regulations that restrict the transfer of $4.98 million in net assets from its subsidiary and VIEs - The company closed its IPO on July 3, 2024, selling 1,250,000 Class A ordinary shares at $4.00 per share for gross proceeds of **$5.0 million**[156](index=156&type=chunk) - Significant share-based compensation was issued, including over **1.5 million shares** for IPO-related services and **2 million restricted shares** for consulting services[154](index=154&type=chunk)[155](index=155&type=chunk) - As of September 30, 2024, restricted net assets of the PRC subsidiary and VIEs amounted to **$4,975,480**, limiting the funds that can be transferred to the parent company[160](index=160&type=chunk) [Note 17: Subsequent Events](index=39&type=section&id=NOTE%2017%20%E2%80%94%20SUBSEQUENT%20EVENTS) After the reporting period, the company secured significant financing, including $5 million in convertible debentures and a $142,554 bank loan - In late 2024, the company entered into an agreement to place up to **$5,000,000 in convertible debentures**, with the full amount issued by December 30, 2024[161](index=161&type=chunk) - On January 8, 2025, the company borrowed **$142,554** (RMB 1.0 million) from the Bank of China for one year at a **3.27% interest rate**[162](index=162&type=chunk)

SHANGHAI, Jan. 13, 2025 /PRNewswire/ -- Eshallgo Inc ("Eshallgo" or the "Company") (NasdaqCM: EHGO), one of the leading Chinese office integrator, agent, and service provider, today announced that on January 10th, 2025, Eshallgo, a company listed on the US stock market, through its subsidiary, Shanghai Yixiuge Enterprise Development (Group) Co., Ltd. (hereinafter referred to as "Yixiuge Group"), entered into a letter with Zhenjiang High-tech Development Group Co., Ltd. (hereinafter referred to as "Zhenjiang ...

SHANGHAI, Dec. 20, 2024 /PRNewswire/ -- Eshallgo Inc ("Eshallgo" or the "Company") (NasdaqCM: EHGO), one of the leading Chinese office integrator, agent, and service provider, announced a far-reaching strategic move—the acquisition of D&K Asset Management (Hong Kong) Co., Ltd., and the establishment of a deep strategic partnership with Beijing Liuliuqiu Cultural Development Co., Ltd. This not only demonstrates ESHALLGO's steadfast pace in business expansion, officially entering the Tencent business ecosyste ...

Core Insights - Eshallgo Inc ("EHGO") has announced a significant equity investment partnership with CS Asia Opportunities Master Fund, where CS Fund will invest up to $20 million in tranches, acquiring up to 4,166,660 shares at a price of $4.8 per share, indicating strong confidence in EHGO's future prospects [4][10] - This partnership is expected to enhance EHGO's entry into Tencent's business ecosystem, leveraging Tencent's resources and technologies to explore new opportunities in office integration and cloud gaming sectors [1][5] - EHGO aims to continue its development philosophy focused on innovation, pragmatism, and efficiency, while expanding its market presence and competitiveness [5] Company Overview - Eshallgo Inc is recognized as a leading office integrator and service provider in China, specializing in office supply sales, leasing, and after-sale maintenance and repair [11] - The company has established a broad geographical presence across 20 provinces in China, with a mission to provide comprehensive office solutions and maximize customer value [11]

Core Viewpoint - Eshallgo Inc has entered into a securities purchase agreement to issue convertible debentures totaling up to $5,000,000, with an annual interest rate of 5%, which increases to 18% in case of default, maturing on November 28, 2025 [1][3]. Group 1: Securities Purchase Agreement Details - The initial closing of $1,500,000 occurred on November 29, 2024, with subsequent closings of $2,000,000 and $1,500,000 contingent upon SEC registration [2]. - The debentures can be converted into Class A ordinary shares at a fixed price of $4.756 per share for the first 50 days, after which the conversion price may be adjusted based on the lowest daily VWAP [3]. - If certain conditions are met, including a drop in daily VWAP below a specified floor price, the company may be required to make monthly payments of up to $1,000,000 plus a 10% premium and accrued interest [3]. Group 2: Fees and Registration - The company will pay a 1% commitment fee upon the effectiveness of the registration statement, and a one-time due diligence and structuring fee of $25,000 was paid at the initial closing [4]. - The debentures were issued as a private placement under an exemption from registration, and the company has committed to filing a registration statement with the SEC within 21 days [5][6]. Group 3: Company Overview - Eshallgo Inc is a leading office solution provider in China, specializing in office supply sales, leasing, and after-sale maintenance and repair, with a presence across 20 provinces [7].