Financial Performance - Total revenues for the six months ended June 30, 2025, increased to $9,817,472, up 10.9% from $8,853,479 in the same period of 2024[5] - Gross profit for the six months ended June 30, 2025, was $3,139,196, slightly down from $3,150,553 in 2024, indicating a gross margin of approximately 32%[5] - The net loss for the six months ended June 30, 2025, was $8,731,241, compared to a net income of $849,327 in the same period of 2024[5] - Operating expenses surged to $11,750,292 for the six months ended June 30, 2025, compared to $1,921,658 in 2024, primarily driven by increased selling and administrative expenses[5] - The company reported a comprehensive loss of $8,383,756 for the six months ended June 30, 2025, compared to a comprehensive income of $513,186 in the same period of 2024[5] - The income before taxes for the six months ended June 30, 2025, was a loss of $8,666,555, compared to an income of $1,080,535 for the same period in 2024[103] - The current income tax expense for the six months ended June 30, 2025, was $256,389, slightly higher than $235,147 for the same period in 2024[103] Revenue Breakdown - Revenue from system integration projects was $9,400,024 for the six months ended June 30, 2025, compared to $8,663,958 in 2024, indicating a growth of 8.5%[38] - Revenue from product sales increased significantly to $417,448 in the first half of 2025, up from $36,948 in 2024, marking a growth of 1,030%[38] - Engineering consulting services generated no revenue in the first half of 2025 due to a strategic shift towards system integration projects, down from $152,573 in 2024[36] - Revenue from the PRC decreased to $3,838,722 in the first half of 2025 from $4,654,089 in 2024, a decline of 17.5%[39] - Revenue from Japan increased to $5,978,750 in the first half of 2025, up from $4,199,390 in 2024, reflecting a growth of 42.4%[39] Assets and Liabilities - Cash and restricted cash at the end of the period was $3,036,019, down from $4,314,094 at the end of June 30, 2024[9] - Total current assets increased to $16,675,443 as of June 30, 2025, from $14,616,522 as of December 31, 2024, reflecting a growth of 14.1%[4] - Total liabilities rose to $15,510,298 as of June 30, 2025, compared to $13,659,020 as of December 31, 2024, marking an increase of 13.5%[4] - Accounts receivable from third-party customers increased to $11,575,253 as of June 30, 2025, from $10,000,866 as of December 31, 2024, with a net accounts receivable of $11,170,072[74] - The company reported total accrued expenses and other liabilities of $1,398,421 as of June 30, 2025, significantly up from $732,419 as of December 31, 2024[80] Shareholder Equity - The company issued 2,000,000 additional ordinary shares, increasing total shares outstanding to 23,173,413 as of June 30, 2025[6] - The Company issued 2,000,000 ordinary shares under the 2024 Equity Incentive Plan, with a fair value of $8,800,000 based on a share price of $4.4[109] - The aggregate amount of paid-in capital and statutory reserves not available for distribution was $13,838,422 as of June 30, 2025, compared to $5,038,427 as of December 31, 2024, reflecting an increase of approximately 174.5%[112] Cash Management - The company had cash balances of $1,869,870 in bank accounts in Japan as of June 30, 2025, with deposit insurance coverage of approximately $76,000 per customer within one bank[19] - The company had $1,869,870 in bank accounts in Japan as of June 30, 2025, with $1,688,343 uninsured, compared to $1,211,701 and $1,147,701 uninsured as of December 31, 2024[63] - The company fully repaid loans from the Bank of China and the Bank of Ningbo upon maturity, demonstrating effective cash flow management[83][84] Research and Development - Research and development expenses for the six months ended June 30, 2025, were $520,479, slightly up from $511,674 in 2024, indicating continued investment in innovation[5] - The company received $14,202 in government grants for research programs in the first half of 2025, compared to $0 in 2024[44] - Research and development costs are focused on developing systems for semiconductor manufacturing, with expenses recognized as incurred[40] Loans and Financing - The company entered into a loan agreement with the Bank of Kumamoto for $2,421,807, maturing on March 31, 2035, at an interest rate of 1.585%[96] - The company entered into a loan agreement for $628,176 with a maturity date on July 13, 2026, at an effective monthly rate of 2.30%[117] - Long-term bank loans as of June 30, 2025 totaled $2,673,077, significantly up from $260,299 on December 31, 2024[82] - The company recorded bank loan interest expenses of $64,246 for the six months ended June 30, 2025, compared to $113,657 for the same period in 2024, indicating a decrease of approximately 43.4%[97] Taxation - The effective tax rate for the six months ended June 30, 2025, was (0.7)%, a significant decrease from 21.4% in the same period of 2024[104] - Total deferred tax assets as of June 30, 2025, amounted to $531,172, up from $326,087 as of December 31, 2024, indicating an increase of approximately 62.7%[105] - The Company has total taxes payable of $204,332 as of June 30, 2025, down from $356,889 as of December 31, 2024, representing a decrease of about 42.7%[106] Corporate Structure - The reorganization completed on January 14, 2022, involved the incorporation of multiple entities, including HUHUTECH International Group Inc. and HUHUTECH (HK) Limited, with the aim of consolidating operations under common control[12] - As of June 30, 2025, the company has 100% ownership of its subsidiaries, including HUHUTECH (HK) Limited, Wuxi Xinwu District Jianmeng Electromechanical Technology Co., Ltd, and Huhu Technology Co., Ltd. in Japan[14] - The company follows U.S. GAAP for financial reporting, ensuring that all adjustments necessary for fair presentation of financial position and operating results are included[15]
HUHUTECH(HUHU) - 2025 Q2 - Quarterly Report