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Summary of Significant Accounting Policies | 9 Months Ended
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Sep. 30, 2025
Summary of Significant Accounting Policies [Abstract] |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of September 30, 2025 and the results of operations and cash flows for the periods ended September 30, 2025 and 2024. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending December 31, 2025. The balance sheet at December 31, 2024 has been derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2024 as included in the Company’s Annual Report on Form 10-K. Discontinued Operations On March 7, 2024, Chain Cloud Mall Network and Technology (Tianjin) Co., Limited was dissolved and deregistered. On September 4, 2024, Tianjin Future Private Equity Fund Management Partnership (Ltd Partnership) was dissolved and deregistered. The loss on disposal was $22.46. On October 18, 2024, Nice Talent Asset Management Limited (“NTAM”) was disposed of for a consideration of $ 0.31 million (HK$2.40 million). The loss on disposal was $2.32 million. On December 6, 2024, FTFT Super Computing Inc. was disposed of for a consideration of US$1.97 million, of which (i) the assumption of the obligations of FTFT Super Computing totaling $973,072.24 and (ii) $1,000,000 was paid to an account at Olshan Frome Wolosky LLP to satisfy, in part, the right of payment held by FT Global Capital, Inc. arising from the judgment entered in favor of FT Global and against the Company registered in the Southern District of New York. The gain on disposal was $3.42 million. On February 3, 2025, FTFT UK LIMITED, FTFT Finance UK Limited, Future Fintech Digital Number One US, LP, Future Fintech Digital Number One Offshore, LLC(Cayman), Future Fintech Digital Number One GP, LLC (USA), FTFT Digital Number One, Ltd.(Cayman), Future FinTech Labs Inc, Future Fintech Digital Capital, FTFT CAPITAL INVESTMENTS, DigiPay FinTech Limited, DCON DigiPay Limited-JPN and Global Key Shared Mall Ltd were disposed of for a consideration of US$25,000 after a court auction sale. The gain on disposal was $28.24 million. Based on the disposal plan and in accordance with ASC 205-20, the Company presented the operating results from these operations as a discontinued operation. Segment Information Reclassification The Company classified business segments into Trading Commission and Consulting service, Fast-Moving Consumer Goods (FMCG), and Supply Chain Financing and Trading. Uses of Estimates in the Preparation of Financial Statements The Company’s condensed consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but are not limited to, the expected credit losses for receivables, estimated useful life and residual value of property, plant and equipment, impairment of long-lived assets, provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to the Company’s condensed consolidated financial statements. Going Concern The Company’s financial statements are prepared assuming that the Company will continue as a going concern. The Company incurred operating losses and had negative operating cash flows and may continue to incur operating losses and generate negative cash flows as the Company implements its future business plan. The Company’s operating losses from continuing operations amounted to $31.06 million, and it had negative operating cash flows from continuing operations of $28.71 million as of September 30, 2025. These factors raise substantial doubts about the Company’s ability to continue as a going concern. The Company has raised funds through issuance of convertible notes and common stock. The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern. Impairment of Long-Lived Assets In accordance with the ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, or it is reasonably possible that these assets could become impaired as a result of technological or other industrial changes. The determination of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. Fair Value of Financial Instruments The Company has adopted FASB ASC Topic on Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable input, which may be used to measure fair value and include the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Input other than Level 1 that is observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other input that is observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable input that is supported by little or no market activity and that is significant to the fair value of the assets or liabilities. The Company’s cash and cash equivalents and restricted cash and short-term investments are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices. Earnings Per Share Under ASC 260-10, Earnings Per Share, basic EPS excludes dilution for Common Stock equivalents and is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of Common Stock outstanding for the period. Diluted EPS is calculated by using the treasury stock method, assuming conversion of all potentially dilutive securities, such as stock options and warrants. Under this method, (i) exercise of options and warrants is assumed at the beginning of the period and shares of Common Stock are assumed to be issued, (ii) the proceeds from exercise are assumed to be used to purchase Common Stock at the average market price during the period, and (iii) the incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted EPS computation. The numerators and denominators used in the computations of basic and diluted EPS are presented in the following table. For the nine months ended September 30, 2025:
|  | Income (Loss) |  |  | Share |  |  | Pre-share amount |
Loss from continuing operations attributable to Future Fintech Group, Inc. |  | $ | (31,058,936 | ) |  |  | 3,867,060 |  |  | $ | (8.03 | )
Income from discontinued operations attributable to Future Fintech Group, Inc. |  | $ | 26,372,056 |  |  |  | 3,867,060 |  |  | $ | 6.82 |
Basic EPS: |  |  |  |  |  |  |  |  |  |  |  |
Loss to common stockholders from continuing operations |  | $ | (31,058,936 | ) |  |  | 3,867,060 |  |  | $ | (8.03 | )
Income available to common stockholders from discontinued operations |  | $ | 26,372,056 |  |  |  | 3,867,060 |  |  | $ | 6.82 |
Diluted EPS: |  |  |  |  |  |  |  |  |  |  |  |
Warrants |  |  | - |  |  |  | 4,211 |  |  |  | - |
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive from continuing operations attributable to Future Fintech Group, Inc. |  | $ | (31,058,936 | ) |  |  | 3,871,271 |  |  | $ | (8.03 | )
Diluted earnings per share is calculated by taking net income, divided by the diluted weighted average common shares outstanding from discontinued operations |  | $ | 26,372,056 |  |  |  | 3,871,271 |  |  | $ | 6.81 |
For the nine months ended September 30, 2024:
|  | Loss |  |  | Share |  |  | Pre-share amount |
Loss from continuing operations attributable to Future Fintech Group, Inc. |  | $ | (8,367,411 | ) |  |  | 1,992,633 |  |  | $ | (4.20 | )
Loss from discontinued operations attributable to Future Fintech Group, Inc. |  | $ | (1,599,489 | ) |  |  | 1,992,633 |  |  | $ | (0.80 | )
Basic EPS: |  |  |  |  |  |  |  |  |  |  |  |
Loss to common stockholders from continuing operations |  | $ | (8,367,411 | ) |  |  | 1,992,633 |  |  | $ | (4.20 | )
Loss available to common stockholders from discontinued operations |  | $ | (1,599,489 | ) |  |  | 1,992,633 |  |  | $ | (0.80 | )
Diluted EPS: |  |  |  |  |  |  |  |  |  |  |  |
Warrants |  |  |  |  |  |  | 4,211 |  |  |  |  |
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive from continuing operations attributable to Future Fintech Group, Inc. |  | $ | (8,367,411 | ) |  |  | 1,996,844 |  |  | $ | (4.20 | )
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding from discontinued operations |  | $ | (1,599,489 | ) |  |  | 1,996,844 |  |  | $ | (0.80 | )
For the three months ended September 30, 2025:
|  | Loss |  |  | Share |  |  | Pre-share amount |
Loss from continuing operations attributable to Future Fintech Group, Inc. |  | $ | (1,965,312 | ) |  |  | 5,902,698 |  |  | $ | (0.33 | )
Loss from discontinued operations attributable to Future Fintech Group, Inc. |  | $ | - |  |  |  | 5,902,698 |  |  | $ | - |
Basic EPS: |  |  |  |  |  |  |  |  |  |  |  |
Loss to common stockholders from continuing operations |  | $ | (1,965,312 | ) |  |  | 5,902,698 |  |  | $ | (0.33 | )
Loss to common stockholders from discontinued operations |  | $ | - |  |  |  | 5,902,698 |  |  | $ | - |
Diluted EPS: |  |  |  |  |  |  |  |  |  |  |  |
Warrants |  |  | - |  |  |  | 4,211 |  |  |  | - |
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive from continuing operations attributable to Future Fintech Group, Inc. |  | $ | (1,965,312 | ) |  |  | 5,906,909 |  |  | $ | (0.33 | )
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding from discontinued operations |  | $ | - |  |  |  | 5,906,909 |  |  | $ | - |
For the three months ended September 30, 2024:
|  | Loss |  |  | Share |  |  | Pre-share amount |
Loss from continuing operations attributable to Future Fintech Group, Inc. |  | $ | (4,216,762 | ) |  |  | 2,013,195 |  |  | $ | (2.09 | )
Loss from discontinued operations attributable to Future Fintech Group, Inc. |  | $ | (661,957 | ) |  |  | 2,013,195 |  |  | $ | (0.33 | )
Basic EPS: |  |  |  |  |  |  |  |  |  |  |  |
Loss available to common stockholders from continuing operations |  | $ | (4,216,762 | ) |  |  | 2,013,195 |  |  | $ | (2.09 | )
Loss available to common stockholders from discontinued operations |  | $ | (661,957 | ) |  |  | 2,013,195 |  |  | $ | (0.33 | )
Diluted EPS: |  |  |  |  |  |  |  |  |  |  |  |
Warrants |  |  | - |  |  |  | 4,211 |  |  |  | - |
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive |  | $ | (4,216,762 | ) |  |  | 2,017,406 |  |  | $ | (2.09 | )
Diluted loss per share is calculated by taking net loss, divided by the diluted weighted average common shares outstanding. |  | $ | (661,957 | ) |  |  | 2,017,406 |  |  | $ | (0.33 | )
Cash and Cash Equivalents Cash and cash equivalents included cash on hand and demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal and use and with an original maturity of three months or less. Deposits in banks in the PRC are only insured by the government up to RMB500,000, in the HK are only insured by the government up to HKD500,000, in the United States of America are only insured by the Federal Deposit Insurance Corporation up to USD250,000, and are consequently exposed to risk of loss. The Company believes the probability of a bank failure, causing loss to the Company, is remote. Cash that is restricted as to withdrawal for use or pledged as security is reported separately on the face of the unaudited condensed consolidated balance sheets, and is not included in the total cash and cash equivalents in the unaudited condensed consolidated statements of cash flows. Receivable and Credit Losses Accounts receivable are recognized and carried at the original invoice amounts less an allowance for any uncollectible amount. The Company has a policy of reserving for uncollectible accounts based on the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company performs ongoing credit evaluations of the Company’s customers and maintains an allowance for potential bad debts if required. Other receivables, and loan receivables are recognized and carried at the initial amount when occurred less an allowance for credit losses. The Company has a policy of reserving for uncollectible accounts based on the Company’s best estimate of the amount of probable impairment losses in the Company’s existing receivables. Allowances for credit losses are maintained for expected credit losses resulting from the Company’s customers’ inability to make required payments. The allowances are based on the Company’s regular assessment of various factors, including the credit-worthiness and financial condition of specific customers, historical experience with bad debts and customer deductions, receivables aging, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. The Company maintains an allowance for credit losses in accordance with ASC Topic 326, Credit Losses (“ASC 326”) and records the allowance for credit losses as an offset to accounts receivable and contract assets, and the estimated credit losses charged to the allowance is classified as “Allowance for (net recovery of) credit losses/doubtful accounts” in the unaudited condensed consolidated statements of comprehensive income (loss). The Company determines whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, the Company uses assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. The Company may also record a general allowance as necessary. Direct write-offs are taken in the period when the Company has exhausted the Company’s efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate that the Company should abandon such efforts. The Company has assessed its accounts receivable including credit terms and corresponding all its accounts receivables as of September 30, 2025. Allowance for credit losses for accounts receivable amounted to $267,369 and $2,785 as of September 30, 2025 and December 31, 2024, respectively. Accounts receivables of $1.34 million and $1.15 million have been outstanding for over 90 days as of September 30, 2025 and December 31, 2024, respectively. Allowance for credit losses for other receivables amounted to $1,157 and $9,519,301 as of September 30, 2025 and December 31, 2024, respectively. Revenue Recognition The Company applies the five steps defined under ASC 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. Revenue arrangements with multiple performance obligations are divided into separate distinct goods or services. The Company allocates the transaction price to each performance obligation based on the relative standalone selling price of the goods or services provided. Revenue is recognized upon the transfer of control of promised goods or services to a customer. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers. The Company does not make any significant judgment in evaluating when control is transferred. Revenue is recorded net of value-added tax. Revenue recognition is as follows: Sales of fast-moving consumer goods The Company operates an e-commerce platform specializing in fast-moving consumer goods. For sales transacted through the Company’s online stores in mainland China, the standard return policy permits customers to return eligible products within seven days of purchase. Historically, customer returns were immaterial. Revenue from sales of fast-moving consumer goods was $2,060,276 and $342 during the nine months ended September 30, 2025 and 2024, respectively. Provision of trading commission and consulting service The Company provides stock trading and consulting services and charges commission and service fees to its customers. The Company recognizes revenue when such services was rendered to the customer. Revenue from provision of trading commission and consulting service was $421,275 and $1,039,985 during the nine months ended September 30, 2025 and 2024, respectively. Sales of coal, aluminum ingots, sand and steel The Company recognizes revenue when the receipt of merchandise is confirmed by the customers, which is the point that the title of the goods is transferred to the customer. Revenue from sales of coal, aluminum ingots, sand and steel was $1,341 and $ 934,971 during the nine months ended September 30, 2025 and 2024, respectively. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method over the useful lives of the assets. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are expensed as incurred. Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The Company estimated that the residual value of the Company’s property and equipment ranges from 3% to 5%. Property, plant and equipment are depreciated over their estimated useful lives as follows:
Office equipment, fixtures and furniture |  | 3-5 years
Vehicle |  | 5 years
Leasehold improvements |  | Lesser of useful life and lease term
Construction in progress includes property, plant and equipment in the course of construction for production or for its own use purposes. Construction in progress is carried at cost less any recognized impairment loss. Construction in progress is classified to the appropriate category of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use. Intangible Assets Acquired intangible assets are recognized based on their cost to the Company, which generally includes the transaction costs of the asset acquisition, and no gain or loss is recognized unless the fair value of noncash assets given as consideration differs from the assets’ carrying amounts on the Company’s book. These assets are amortized over their useful lives if the assets are deemed to have a finite life and they are reviewed for impairment by testing for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The fair value of an intangible asset is the amount that would be determined if the entity used the assumptions that market participants would use if they were pricing the intangible asset. The useful life of the Company’s intangible assets is ten years, which is determined by using the time period that an intangible is estimated to contribute directly or indirectly to a Company’s future cash flows. Foreign Currency and Other Comprehensive Income (Loss) The financial statements of the Company’s foreign subsidiaries are measured using the local currency as the functional currency; however, the reporting currency of the Company is the USD. Assets and liabilities of the Company’s foreign subsidiaries have been translated into USD using the exchange rate at the balance sheet dates, while equity accounts are translated using the historical exchange rate. The exchange rate the Company used to convert RMB to USD was 7.11:1 and 7.19:1 at the balance sheet dates of September 30, 2025 and December 31, 2024, respectively. The average exchange rate for the period has been used to translate revenues and expenses. The average exchange rates the Company used to convert RMB to USD were 7.16:1 and 7.11:1 for the nine months ended September 30, 2025 and 2024, respectively. The exchange rate the Company used to convert HKD to USD was 7.78:1 and 7.76:1 at the balance sheet dates of September 30, 2025 and December 31, 2024. The average exchange rate for the period has been used to translate revenues and expenses. The average exchange rates the Company used to convert HKD to USD were 7.80:1 and 7.81:1 for the nine months ended September 30, 2025 and 2024, respectively. Translation adjustments are reported separately and accumulated in a separate component of equity (cumulative translation adjustment). Government subsidies Government subsidies primarily consist of financial subsidies received from provincial and local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. For certain government subsidies, there are no defined rules and regulations to govern the criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the relevant government authorities. The government subsidies of operating nature with no further conditions to be met are recorded of operating expenses in “Other income” in the unaudited condensed consolidated statements of operations and comprehensive income (loss) when received. The amendments in this update require disclosures about transactions with a government that have been accounted for by analogizing to a grant or contribution accounting model to increase transparency about (1) the types of transactions, (2) the accounting for the transactions, and (3) the effect of the transactions on an entity’s financial statements. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-25 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented. Short-term investments Short-term investments consist primarily of investments in fixed deposits with original maturities between three months and one year and certain investments in wealth management products and other investments that the Company has the intention to redeem within one year. Fair valued or carried at amortized costs. As of September 30, 2025 and December 31, 2024, the short-term investments amounted to $1,407 and $1,391, respectively. Long-term investments Long-term investments consist primarily of investments in debt investment with original maturities between three years and more. Fair valued or carried at amortized costs. As of September 30, 2025 and December 31, 2024, the long-term investments amounted to $844,416 and $1,530,243, respectively. During the nine months ended September 30, 2025, Company has collected repayment of $697,916 (RMB5.0 million) of the December 31, 2024 debt investment balance. The Company did not recognize an impairment for its long-term investment as all the debt investment is deemed collectible. Lease The Company follows ASU No. 2016-02, Leases (Topic 842), or ASC 842. The Company determines if an arrangement is a lease or contains a lease at lease inception. For operating leases, the Company recognizes a right-of-use (“ROU”) asset and a lease liability based on the present value of the lease payments over the lease term on the unaudited condensed consolidated balance sheets at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company estimates the incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The ROU assets also include any lease payments made, net of lease incentives. Lease expense is recorded on a straight-line basis over the lease term. The Company’s leases often include options to extend and lease terms include such extended terms when the Company is reasonably certain to exercise those options. Lease terms also include periods covered by options to terminate the leases when the Company is reasonably certain not to exercise those options. Share-based compensation The Company awards share options and other equity-based instruments to its employees, directors and consultants (collectively “share-based payments”). Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date. The Company recognizes the compensation cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The amount of cost recognized is adjusted to reflect the expected forfeiture prior to vesting. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. New Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. This ASU requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company adopted this guidance effective July 1, 2025 and the Company is currently evaluating the impact of adopting this ASU on its financial statements. In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. This ASU requires entities to 1. disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities, 2. include certain amounts that are already required to be disclosed under current Generally Accepted Accounting Principles in the same disclosures as other disaggregation requirements, 3. disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and 4. disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense. The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Additionally, in January 2025, the FASB issued ASU No. 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Company is in the process of evaluating the impact of adopting this new guidance on its consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-04, “Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments”. The amendments provide guidance on accounting for induced conversions of convertible debt instruments. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for entities that have adopted the amendments in ASU 2020-06. Early adoption is permitted. The Company plans to adopt this guidance effective July 1, 2026 and the Company is currently evaluating the impact of adopting this ASU on its financial statements. In May 2025, the FASB issued ASU No. 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810): Accounting Acquirer in a Business Combination Involving a Variable Interest Entity”. This ASU clarifies that when a business that is a VIE is acquired primarily with equity interests, the determination of the accounting acquirer should follow ASC 805 rather than defaulting to the primary beneficiary under ASC 810. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company plans to adopt this guidance effective July 1, 2027 and the Company is currently evaluating the impact of adopting this ASU on its financial statements. In May 2025, the FASB issued ASU No. 2025-04, “Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606)”: Clarifications to Share-Based Consideration Payable to a Customer. This ASU clarifies how entities account for share-based consideration payable to a customer. The ASU requires customer awards with vesting conditions tied to purchases to be treated as performance conditions, eliminates the forfeiture policy election, and states that the variable consideration constraint under ASC 606 does not apply to these awards. The standard is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Company plans to adopt this guidance effective July 1, 2027 and the Company is currently evaluating the impact of adopting this ASU on its financial statements. In July 2025, the FASB issued ASU No. 2025 05, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”. This ASU provides a practical expedient for all entities related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Topic 606. The standard is effective for annual periods beginning after December 15, 2025. Early adoption of ASU 2025-05 is permitted and should be applied prospectively. The Company plans to adopt this guidance effective July 1, 2026 and the Company is currently evaluating the impact of adopting this ASU on its financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying unaudited condensed consolidated financial statements.

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- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/235/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483426/235-10-50-1 + Details
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