EXHIBIT 99.1

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our combined financial statements and related notes included elsewhere in exhibit 99.2 to this Form 6-K. This discussion and analysis and other parts of exhibit 99.1 to this Form 6-K contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in our Annual Report on Form 20-F. You should carefully read the “Risk Factors” section of our Annual Report on Form 20-F  to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Overview

We are a solar PV product provider principally engaged in the manufacture and sale of solar cables and solar connectors. We also actively cultivate partnerships with multiple IC chip manufacturers and offer customers new and used GPU and HPC servers. Our business is carried out through our operating subsidiaries, PN Smart Energy and its subsidiaries, in China.

Our mission is to become a green energy solutions provider to power data centers by using solar power and to make our planet greener by delivering environment-friendly solar PV products. Leveraging our expertise and experience in the solar PV products and services market, experience in developing solar power technologies, as well as business relationships with our HPC server customers, we aim to expand our solar PV product offerings and high computing server solutions to enterprise customers of HPC servers.

For the six months ended March 31, 2026 and 2025, our revenue was $25,499,136 and $24,176,271 respectively, and our net (loss)/income was $(7,135,474) and $391,967, respectively. Net loss attributable to owners of the Company was $(7,412,275) and $(65,757) for the six months ended March 31, 2026 and 2025, respectively. For the six months ended March 31, 2026, we generated 94.41% of our revenue from sales of solar PV products and 5.59% from other services, compared to 94.78% of our revenue from sales of solar PV products and 5.22% from sales of HPC products for the six months ended March 31, 2025.

Recent Developments and Business Highlights

While our results for the six months ended March 31, 2026 reflect a net loss, we believe that loss was driven principally by a significant non-cash equity incentive charge and by industry-wide headwinds, and that it does not fully reflect the underlying progress the Company made during the period. We highlight the following developments, which we believe are important to understanding our performance and prospects:

Revenue growth against an industry downturn

Total revenues increased 5.47% to $25,499,136 for the six months ended March 31, 2026, compared with $24,176,271 in the corresponding period of the prior year, despite significant headwinds throughout the solar photovoltaic industry. Revenue generated from solar PV products rose by 5.05% year-on-year. Overseas sales climbed 44.62% to $10,811,850 from $7,476,071 in the prior comparable period. The robust growth in overseas revenue was primarily attributable to the continuous expansion of the Company’s global sales network, active development of new overseas customers, as well as enlarged production capacity supported by the relocation and commissioning of new manufacturing facilities.

Two new business lines launched and already contributing

During the period we commenced two new operations, an international freight and logistics business and a PV power station operation business. Together these newly developed businesses generated approximately $1.4 million of incremental revenue in their first months of operation, advancing our strategy of diversifying beyond core solar cable and connector manufacturing.

Strategic increase in Nanjing Cesun Power and a five-year profit guarantee

We increased our equity interest in Nanjing Cesun Power Co., Ltd. to 44%. Under the related Share Purchase Agreement, the seller has provided an unconditional guarantee of cumulative audited after-tax net profit of at least $10,000,000 for the investee over a five-year measurement period, with any shortfall to be settled in cash within 30 days following the final-year audit, and is subject to a five-year lock-up on the Class B shares issued as consideration. In accordance with ASC 450-20, this gain contingency is not recognized in our financial statements until realized; however, we believe it provides meaningful downside protection and visibility into future returns from this investment.

Substantial strengthening of the balance sheet

Total assets grew 29.5% to $58,919,930 as of March 31, 2026 from $45,494,086 as of September 30, 2025, and total shareholders' equity grew 47.7% to $33,193,219 from $22,477,110. Additional paid-in capital increased to $26,067,697 from $8,464,735, reflecting capital raised through the exercise of employee stock options and shares issued in strategic acquisitions, and our long-term equity investments increased to $17,670,361 from $6,891,243, reflecting continued investment in project and capacity pipeline.

Positive working capital and a manageable debt profile

As of March 31, 2026, we held cash and cash equivalents of $4,882,622 and maintained positive working capital of $11,647,914. Total outstanding borrowings were $2,036,592, all of which are onshore in the PRC. Based on existing cash reserves and expected operating cash inflows, management believes the Company has adequate resources to meet its obligations over the next twelve months.

Continued investment in innovation

Research and development expenses increased 199.83% to $1,127,347, funding several newly launched projects, including the development of a photovoltaic conductor winding device designed to prevent tangling and wire crimping. As of the date of this report, we hold 58 patents, comprising 43 utility model patents, seven invention patents and eight design patents.

Impact of non-cash share-based compensation

Our net loss for the period included $5,594,106 of non-cash share-based compensation expense recognized in connection with equity incentive awards granted to, and immediately vested by, employees and key personnel. Because these awards vested upon grant, their full fair value was expensed in the current period, with no cash outflow and no reduction in our cash position or net working capital; the offsetting entry was recorded entirely within additional paid-in capital. Excluding this non-cash charge, adjusted net loss for the period would have been $1,541,368. We view these equity awards as a strategic investment to retain and align the core operating and technical team that will execute our growth strategy. Adjusted net loss is a non-GAAP measure; the most directly comparable GAAP measure is net loss of $7,135,474, and the only reconciling item is the $5,594,106 of non-cash share-based compensation expense described above. Adjusted net loss should not be considered in isolation or as a substitute for net loss determined in accordance with U.S. GAAP.

Key Factors Affecting Operating Results

We believe our results of operations for the current six months reflect a net loss and future success are primarily affected by the following specific factors:

Economic and industry trends in China and globally

Our business and results of operations are affected by general factors driving the solar PV energy and HPC server industries, which are well positioned for further growth potential as indicated by, among others, (i) the strong and steady growth of the respective markets globally, and (ii) increasing demand for technologically advanced and diversified products. Consumer demand is driven by a number of other factors, including rapidly growing demand for quality and technology innovation, rising energy costs and utility costs. We believe that we are poised to benefit from the resilient consumer demand benefiting from certain favorable government policies and regulations applicable to the industry alongside the overall macroeconomic growth. On the other hand, there could also be industry challenges and regulatory restrictions in the future that affect us.

Our ability to ramp up production and increase sales volume

Our results of operation and financial performance depend upon our ability to continue to expand production capacity in response to the increasing consumer demand. Hence, it is critical for us to continuously ramp up production and increase sales volume. We conduct a lean production approach and determine our production target by closely monitoring the actual ordering requirements from customers. In addition, we take a comprehensive and strict management over the quality control to enhance the production efficiency and ensure delivery in a timely manner. Furthermore, we plan to enhance our automation level in the future.

Our current manufacturing facility in Ningbo, Zhejiang Province commenced production in June 2015 and has an annual production capacity of 180 million meters to fulfill the current demand. We intend to construct new manufacturing facility in Nanjing Pukou District to diversify our products portfolio and further solidify our market position. The manufacturing facility is expected to commence manufacturing in 2027. We believe that we will be able to reduce our volume-driven product costs and improve our gross margin when operating at scale.

Our ability to expand in domestic and international markets

Our business success and financial performance depend in part on our expansion of market presence. Levering our insights and extensive experience through years of refinement and evolvement, we believe we are well positioned to successfully compete in the surging global market. We continue to position ourselves in existing geographic markets in Asia and Europe, which we expect to serve as important sources of future growth. We have built and will continue to expand a robust sales network across China and globally efficiently as we view international expansion as an important element of our strategy for our long-term development. Accordingly, expanded global reach will require continued investment and may expose us to additional foreign currency risk, international taxes and tariffs, legal obligations and additional operational costs, risks and challenges that may impact our result of business and financial condition.

Our ability to maintain existing and attract prospective customers

Our sustainable growth in the long term is significantly dependent upon the retention and growth of our customer base. We amassed a large, loyal and growing premium customers covering a wide spectrum of verticals, providing a stable source of business for our operating subsidiaries’ operations and highlighted our continued efforts to address their needs over time.

As we continue to ramp up our business presence and enhance our brand awareness and economies of scale, we expect to attract new and retain existing customers. Leverage our industry knowhow and brand recognition, we strive to stay close with our existing and prospective customers to understand their needs and preferences, which we believe is enabling us to further penetrate the respective industry and capture additional market share, and continue to diversify our customer base efficiently. We continue to invest in our selling and marketing efforts, which are critical to driving customer acquisition.

Our ability to invest in technology innovation and talents

Our business success and financial performance, particularly our ability to drive growth, depends upon our technological capabilities. As of the date of this annual report, we have mastered multiple key technologies and possessed 58 patents, including 43 utility model patents, seven invention patents and eight design patents. For details, see “Item 4. Information on the Company — B. Business Overview — Intellectual Property — Patent.”

We have and will continue to make investments in technology to constantly innovate and adapt to evolving consumer preferences. We intend to establish an R&D center and continue to attract more experienced, talented R&D personnel to increase our competitiveness and strengthen our R&D efforts. In addition, we expect to cooperate with PV module manufacturers and solar energy storage enterprises, some of which have industry-leading positions in the respective domain they operate in, to expand our product portfolio riding on the strong and steady growth of the solar PV energy industry, in hope to win market share.

Our ability to manage costs and improve operating efficiency

Our results of operations are affected by our ability to effectively control costs and enhance our operating efficiency. A significant portion of our cost of revenues primarily relates to raw materials and components, which is determined principally by market forces and changes in governmental policies, as well as our bargaining power with our suppliers. The market price of the relevant raw materials and components fluctuates with market conditions. For the fiscal years ended March 31, 2026 and 2025, cost of revenues accounted for 88.40% and 84.68% of our total revenues, respectively. Our ability to effectively control these costs as we continue to ramp up our production volume has affected and will continue to affect our financial performance significantly. Going forward, we will actively cultivate partnerships with suppliers to maintain competitive pricing terms.

With the support of practical experience and industry know-how gained from our extensive operations serving a large customer base, we continue to refine and enrich our production to improve operating efficiency. With respect to selling and marketing expenses, we expect to continue to benefit increasingly from the network effect of our enhanced brand presence. We also intend to optimize our general and administrative expenses by enhancing our level of management, streamlining our internal workflows, and leveraging technology to drive convenience, cost-efficiency and productivity.

Results of Operations

The following tables set forth a summary of our consolidated statements of operations and comprehensive income for the six months ended March 31, 2026 and 2025, respectively. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of our future trends.

Segment information for the six months Ended March 31, 2026

Segment information for the six months Ended March 31, 2025

Revenues

For the six months ended March 31, 2026 and 2025, our revenues were $25,499,136 and $24,176,271, respectively. This represents an increase of $1,322,865, or 5.47%, which was primarily driven by a $1,157,405 (or 5.05%) growth in solar PV product sales. This growth was partially offset by a $1,261,209 decrease in HPC product sales. In addition, other businesses, namely newly launched logistics and power plant operation businesses in the current period, contributed an incremental revenue increase of $1.4 million.

For the six months ended March 31, 2026, we generated revenue from sales of solar PV products of $24,072,467, representing an increase of $1,157,405 or 5.05%, comparing to $22,915,062 for the six months ended March 31, 2025. Revenue from sales of solar PV products accounted for 94.41% and 94.78% of our total revenues for the six months ended March 31, 2026 and 2025, respectively. The increase in our solar PV products sales was mainly due to: (1) the expanding global photovoltaic market, which drove higher demand for solar photovoltaic cables; (2) declining storage battery costs, which accelerated the return on investment for energy storage systems and encouraged users to install them; and (3) the growing number of countries promoting the installation of photovoltaic and energy storage systems through supportive policies and incentives.

Starting from the fiscal year ended September 30, 2023, our business has shifted to focus more on manufacturing and sales of our solar PV products and scaled down its HPC products operations due to the reduced demand for computing power after an initial surge driven by large models and challenges in the global development of computing power. We generated revenue from sales of HPC products of $0 for the six months ended March 31, 2026, representing a decrease of $1,261,209, or 100%, compared with $1,261,209 for the six months ended March 31, 2025.

Other operating revenues mainly consist of logistics income and power plant operation income. The Company established Ningbo Zhuoxing Logistics Co., Limited in April 2025 to specialize in freight transportation. To expand its business portfolio, the Company launched the power plant operation business in August 2025. These two newly developed businesses collectively generated incremental revenue of $1.4 million for the six months ended March 31, 2026.

Cost of revenues

Cost of revenues consists primarily of manufacturing and purchase cost of servers, photovoltaic cable, and photovoltaic connectors etc., depreciation, maintenance, and other overhead expenses.

Our cost of revenues for solar PV products increased by $1,651,053, or 8.39%, outpacing the 5.05% growth in the related revenues, primarily due to higher copper prices during the period.

Our cost of revenues for other businesses mainly consists of logistics agency expenses and depreciation expense on power station equipment, which correspond to the two newly added businesses in the current period with an aggregate amount of $1.2 million. 

Gross profit and margin

Gross profit for the six months March 31, 2026 and 2025 were $2,957,765 and $3,703,925, representing 11.6% and 15.32% of revenues, respectively. The gross margin decline for the six months ended March 31, 2026 compared to the corresponding period in 2025 was primarily driven by intense competition in the solar industry, which exerted substantial pricing pressure and forced the Company to cut unit selling prices. In addition, the sharp rise in copper prices, our key raw material during the current period, further squeezed gross margin levels.

Selling and marketing expenses

Our selling and marketing expenses primarily consist of salaries and benefits, office expenses, and freight expenses. Our selling and marketing expenses were $1,108,040 and $973,207 for the six months ended March 31, 2026 and 2025, respectively. The selling and marketing expenses increased by $134,833 or 13.85%, primarily due to the increase in international shipping expenses, driven by the growth in our overseas revenues. Our overseas sales increased by $3,335,779, or 44.62%, from $7,476,071 for the six months ended March 31, 2025, to $10,811,850 for the six months ended March 31, 2026. The increase in our overseas sales reflected our strategy of shifting focus from HPC products to solar PV products, which contributed the major part of our overseas sales.

General and administrative expenses

Our general and administrative expenses consist primarily of salaries and welfare expenses, rental expenses, depreciation and amortization expenses, and bad debt provision. Our general and administrative expenses were $7,799,283 and $1,850,399 for the six months ended March 31, 2026 and 2025, respectively, representing an increase of $5,948,884, or 321.49%. The increase in general and administrative expenses for the six months ended March 31, 2026 compared with the corresponding six-month period ended March 31, 2025 was primarily attributable to $5,594,106 of non-cash share-based compensation expense recognized in respect of equity incentive awards granted to, and immediately vested by, employees in the current period. Excluding this non-cash charge, general and administrative expenses increased by $354,778, or 19.2%, over the prior-year period.

Research and development expenses

Research and development expenses primarily consist of material cost, employee salaries and benefit costs and other costs related to the improvement research and development for our solar PV products. Research and development expenses were $1,127,347 and $376,000 for the six months ended March 31, 2026 and 2025, respectively, representing a increase of $751,347, or 199.83%. The increase in research and development expenses was mainly due to several newly launched R&D projects during the period, including the development of photovoltaic conductor winding devices designed to prevent tangling and wire crimping.

Income tax expense

The PRC EIT is calculated based on the taxable income determined under the applicable EIT Law and its implementation rules, which became effective on January 1, 2008. The EIT Law applies a uniform 25% income tax rate for all resident enterprises in China. Income taxes reflected a benefit of $52,878 for the six months ended March 31, 2026, compared to an income tax expense of $181,987 for the six months ended March 31, 2025. The variance was mainly driven by the difference in pre-tax results between the two periods. The Company recorded a pre-tax loss of $7,188,352 for the six months ended March 31, 2026, which led to an increase in deferred tax assets and a corresponding reversal of deferred tax expense, resulting in a net income tax benefit in the current period.

Net (loss)/income

As a result of the foregoing, our net (loss)/income for the six months ended March 31, 2026 and 2025 were $(7,135,474) and $391,967, respectively, representing a decrease of $7,527,441.

Taxation

Cayman Islands Taxation

The following is a discussion on certain Cayman Islands income tax consequences of an investment in the Shares. The discussion is a general summary of the present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.

Under Existing Cayman Islands Laws

Payments of dividends and capital in respect of the Shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of interest and principal or a dividend or capital to any holder of the Shares, as the case may be, nor will gains derived from the disposal of the Shares be subject to Cayman Islands income or corporation tax. The Cayman Islands currently have no income, corporation or capital gains tax and no estate duty, inheritance tax or gift tax.

No stamp duty is payable in respect of the issue of the Shares or on an instrument of transfer in respect of a Share.

People’s Republic of China Taxation

Under the EIT Law, an enterprise established outside the PRC with a “de facto management body” within the PRC is considered a PRC resident enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income as well as tax reporting obligations. Under the Implementation Rules, a “de facto management body” is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise.

In addition, SAT Circular 82 issued in April 2009 specifies that certain offshore-incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if all of the following conditions are met: (a) senior management personnel and core management departments in charge of the daily operations of the enterprises have their presence mainly in the PRC; (b) their financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (c) major assets, accounting books and company seals of the enterprises, and minutes and files of their board’s and shareholders’ meetings are located or kept in the PRC; and (d) half or more of the enterprises’ directors or senior management personnel with voting rights habitually reside in the PRC. Further to SAT Circular 82, the SAT issued Announcement of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Income Tax on Chinese-controlled Resident Enterprises Incorporated Overseas (Trial Implementation) (the “SAT Bulletin 45”) on July 27, 2011, which took effect on September 1, 2011, to provide more guidance on the implementation of SAT Circular 82. SAT Bulletin 45 provides for procedures and administration details of determination on PRC resident enterprise status and administration on post-determination matters. If the PRC tax authorities determine that PN Smart Energy Ltd. is a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. For example, PN Smart Energy Ltd. may be subject to enterprise income tax at a rate of 25% with respect to its worldwide taxable income. Also, a 10% withholding tax would be imposed on dividends we pay to our non-PRC enterprise shareholders and with respect to gains derived by our non-PRC enterprise shareholders from transferring our shares or Ordinary Shares and potentially a 20% of withholding tax would be imposed on dividends we pay to our non-PRC individual shareholders and with respect to gains derived by our non-PRC individual shareholders from transferring our shares or Ordinary Shares.

It is unclear whether, if we are considered a PRC resident enterprise, holders of our shares or Ordinary Shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. See “Item 3. Key Information — D. Risk Factors — Risk Factors Related to Doing Business in China — Under the PRC Enterprise Income Tax Law, we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.”

The SAT and the MOF issued the Notice of Ministry of Finance and State Administration of Taxation on Several Issues relating to Treatment of Corporate Income Tax Pertaining to Restructured Business Operations of Enterprises (the “SAT Circular 59”) in April 2009, which took effect on January 1, 2008. On October 17, 2017, the SAT issued the SAT Circular 37. By promulgating and implementing the SAT Circular 59 and the SAT Circular 37, the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in a PRC resident enterprise by a non-PRC resident enterprise.

Pursuant to the Tax Arrangement, where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at least 25% of a PRC enterprise, the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority.

Pursuant to the Circular of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements (“SAT Circular 81”), a resident enterprise of the counter-party to such Tax Arrangement should meet all of the following conditions, among others, in order to enjoy the reduced withholding tax under the Tax Arrangement: (i) it must take the form of a company; (ii) it must directly own the required percentage of equity interests and voting rights in such PRC resident enterprise; and (iii) it should directly own such percentage of capital in the PRC resident enterprise anytime in the 12 consecutive months prior to receiving the dividends. Furthermore, the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments, or the Administrative Measures, which took effect in January 1, 2020, requires that the non-resident taxpayer shall determine whether it may enjoy the treatments under relevant tax treaties and file the tax return or withholding declaration subject to further monitoring and oversight by the tax authorities. Accordingly, PN Smart Energy Ltd. may be able to enjoy the 5% withholding tax rate for the dividends it receives from WFOE, if it satisfies the conditions prescribed under SAT Circular 81 and other relevant tax rules and regulations. However, according to SAT Circular 81, if the relevant tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.

Liquidity and Capital Resources

We rely primarily on cash generated by our PRC operating subsidiaries to fund daily operations and business expansion. If operating cash flows are insufficient to cover future capital expenditures, capital commitments and operational outlays, we may raise additional funds via debt issuances, equity offerings or new credit facilities.

As of March 31, 2026, cash and cash equivalents were $4,882,622 and total working capital was $11,647,914, compared with $9,343,368 cash and $12,872,738 working capital as of September 30, 2025. The decrease resulted largely from significant net cash outflows from operating activities in the six months ended March 31, 2026, driven by industry PV market headwinds, rising raw material costs and expanded working capital investment, partially offset by financing inflows from bank loans and stock option exercises.

Net cash used in operating activities reached $6,458,168 for the current half-year, versus $1,592,453 in the prior period, while net cash used in investing activities declined sharply to $23,078 due to reduced upfront equity investments. Financing activities generated cash inflows of $2,370,844 in the current period, a notable decrease compared with the prior period’s $9,467,338. The year-over-year drop was primarily attributable to the prior period’s inclusion of net proceeds raised through our initial public offering.

We incurred a net loss of $7,135,474 in the current period and have taken targeted operational and financing measures to restore profitability and cash generation. Management is of the view that existing cash reserves plus expected operating cash inflows will be adequate to meet all payment obligations over the next 12 months, subject to successful execution of our PV business development plans.

As of March 31, 2026, total outstanding borrowings were $2,036,592, with all repayments due domestically in the PRC. We have outstanding capital contribution commitments to joint ventures required to be fully funded before September 30, 2026, which we plan to settle with onshore cash.

Current foreign exchange and other regulations in the PRC may restrict our PRC entities in their ability to transfer their net assets to us and our subsidiaries. However, we have no present plans to declare dividend and we plan to retain our retained earnings to continue to grow our business. In addition, these restrictions had no impact on our ability to meet our cash obligations as all of our current cash obligations are due within the PRC.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

Operating Activities

Net cash used in operating activities was $6,458,168 for the six months ended March 31, 2026, primarily consisted of an increase of $1,103,233 in inventories, an increase of $4,583,163 in prepaid expenses and other current assets, a decrease of $1,608,035 in advance from customer, an increase of $1,023,987 in accounts payable.

Net cash used in operating activities was $1,592,453 for the six months ended March 31, 2025, primarily consisted of an increase of $1,244,674 in inventories, an increase of $4,740,203 in prepaid expenses and other current assets, an increase of $1,855,273 in accounts payable, an increase of $632,697 in advance from customer, an increase of $676,066 in notes payable.

Net cash used in operating activities amounted to $6,458,168 for the six months ended March 31, 2026, compared with $1,592,453 for the six months ended March 31, 2025, representing a decrease in operating cash flows of $4.87 million. This change was primarily driven by the operating loss incurred during the current period, coupled with a reduction in contract liabilities upon completion of certain export projects. The Company incurred operating losses for the six months ended March 31,2026, primarily due to the combined impacts of declining prosperity in the photovoltaic industry, persistently high prices of copper (the core raw material) resulting in rigid cost pressures, intensified industry competition and adverse policy changes. The photovoltaic industry entered a profound adjustment period during the year, with a significant decline in newly installed domestic photovoltaic capacity and shrinking market demand at the terminal end. The oversupply across the entire photovoltaic industrial chain intensified, strengthening the bargaining power of downstream customers and driving down the selling prices of the Company’s products significantly. Meanwhile, copper prices, a key raw material for photovoltaic cables, hit a record high, and the sustained high raw material costs substantially eroded the Company’s profit margins. In addition, overcapacity in the photovoltaic cable sector triggered cut-throat price competition, further compressing the profitability of orders. Furthermore, the cancellation of export tax rebate policies for photovoltaic-related products starting in 2026 and rising overseas trade barriers increased the operational costs for export businesses. The above factors jointly led to a substantial decline in the Company’s profits and resulted in operating losses for the six months ended March 31, 2026.

Investing Activities

For the six months ended March 31, 2026, net cash used in investing activities was $23,078, which primarily consisted of purchase of property, plant and equipment of $78,362, advances made to related parties of $688,559 and collection from related parties of $733,580.

For the six months ended March 31, 2025, net cash used in investing activities was $3,120,083, which primarily consisted of down-payment for investment of $1,452,121, purchase of property and equipment of $221,024, and purchase of investments of $1,446,938.

Financing Activities

For the six months ended March 31, 2026, net cash provided by financing activities was $2,370,844, which was mainly contributed by proceeds from borrowings of $1,964,772, borrowings from related parties of $1,184,143, proceeds from exercise of stock options of 1,530,000, and repayment of borrowings of $2,028,701. 

For the six months ended March 31, 2025, net cash provided by financing activities was $9,467,338, which was mainly contributed by proceeds from borrowings of $1,713,503,proceeds from related parties of $2,120,858, and net proceeds from initial public offering of $6,964,500 after deducting expenses primarily consisting of underwriting compensation, legal fees, and audit fees by issuing 2,000,000 ordinary shares at $4.00 per share for total gross proceeds of $8,000,000 in its Initial Public Offering (IPO), and repayment of borrowings of $843,419.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Tabular Disclosure of Contractual Obligations

Commitments and Contingencies

From time to time, we may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, we do not believe these actions, in the aggregate, will have a material adverse impact on our financial position, results of operations or liquidity, except for the following disclosure.

Capital Commitment

On May 11, 2023, the Company committed to invest $71,249 (RMB 500,000) to Ningbo Yiqiying New Energy Co., Ltd.. As of March 31, 2026, the Company had outstanding balances of $71,249 (RMB 500,000). The Company expected to pay off the outstanding capital fund before September 30, 2026.

On October 25, 2023, the Company committed to invest $6,000,000 (RMB 43,321,800) to establish a new company, Nanjing Cesun Power Co., Ltd., with other parties. As of March 31, 2026, the Company paid 5,464,618 (RMB 38,828,840) and had $535,382 (RMB 4,492,960) outstanding. The Company expected to pay off the outstanding capital fund before September 30, 2026.

On October 23, 2023, the Company committed to invest $142,499 (RMB 1,000,000) to establish a new company, Hubei Nanzhuo New Energy Co., Ltd., with other party. As of March 31, 2026, the Company had $142,499 (RMB 1,000,000) outstanding. The Company expected to pay off the outstanding capital fund before September 30, 2026.

On October 24, 2024, the Company committed to invest $35,625 (RMB 250,000) to Taizhou Shuyong New Energy Co., Ltd. As of March 31, 2026, the Company had outstanding balances of $35,625 (RMB 250,000). The Company expected to pay off the outstanding capital fund before September 30, 2026.

EXHIBIT 99.2

PN SMART ENERGY LTD.

INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

PN SMART ENERGY LTD.

UNAUDITED CONSOLIDATED BALANCE SHEETS

EXPRESS IN U.S. DOLLARS, EXCEPT FOR SHARE AND PER SHARE DATA,

OR OTHERWISE NOTED

* These financial statements are as of March 31, 2026. The Company effected a reverse share split with an exchange ratio of one new share for every twenty old shares on April 13, 2026. All share quantities and per-share data presented in the financial statements have been retroactively restated to reflect the impact of the reverse split.

The accompanying notes are an integral part of these consolidated financial statements.

PN SMART ENERGY LTD.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

FOR THE SIX MONTHS ENDED MARCH 31, 2026, AND 2025

EXPRESS IN U.S. DOLLARS, EXCEPT FOR SHARE AND PER SHARE DATA,

OR OTHERWISE NOTED 

The accompanying notes are an integral part of these consolidated financial statements

PN SMART ENERGY LTD. UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED MARCH 31, 2026

EXPRESS IN U.S. DOLLARS, EXCEPT FOR SHARE AND PER SHARE DATA,

OR OTHERWISE NOTED

The accompanying notes are an integral part of these consolidated financial statements.

PN SMART ENERGY LTD. UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED MARCH 31, 2025

EXPRESS IN U.S. DOLLARS, EXCEPT FOR SHARE AND PER SHARE DATA,

OR OTHERWISE NOTED

The accompanying notes are an integral part of these consolidated financial statements.

PN SMART ENERGY LTD.

 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED MARCH 31, 2026, AND 2025

EXPRESS IN U.S. DOLLARS, EXCEPT FOR SHARE AND PER SHARE DATA,

OR OTHERWISE NOTED

The accompanying notes are an integral part of these consolidated financial statements.

PN SMART ENERGY LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Nature of Operations

PN SMART ENERGY LTD. (Formerly “SKYCORP SOLAR GROUP LTD.”) （the “Company” or “PN Smart Energy”) was incorporated as an exempted holding company under the laws of the Cayman Islands on January 19, 2022. PN Smart Energy does not conduct any substantive operations on its own, but instead conducts its business operations through its wholly-owned subsidiary in the People’s Republic of China (the “PRC”) and the subsidiaries of such entity. PN Smart Energy and its subsidiaries are hereinafter collectively referred to as “the Company.” PN Smart Energy designs, develops, manufactures and sells solar PV products and solar power system solutions service, through its indirectly wholly-owned subsidiary, Ningbo Skycorp, and subsidiaries, Zhejiang Pntech and Ningbo Pntech. PN Smart Energy also provides High-Performance Computing (“HPC”) products, through its indirectly wholly-owned subsidiaries, Ningbo Dcloud Information and Zhejiang Skycorp.

Corporate Structure

PN Smart Energy Ltd. is a limited liability company incorporated under the laws of the Cayman Islands on January 19, 2022.

Skycorp Digital Limited is a limited liability company incorporated on February 16, 2022 under the laws of the BVI and a wholly owned subsidiary of PN Smart Energy Ltd.

PN Skycorp Solar Limited is a limited liability company incorporated on April 24, 2025 under the laws of the USA and a wholly owned subsidiary of Skycorp Digital Limited.

PN Solar Solutions Limited is a limited liability company incorporated on May 15, 2025 under the laws of the USA and a wholly owned subsidiary of PN Skycorp Solar Limited.

GreenHash Limited is a limited liability company incorporated on March 30, 2022 under the laws of the Hong Kong and a wholly owned subsidiary of Skycorp Digital Limited.

Ningbo eZsolar Co., Ltd. (“WFOE”) is a limited liability company incorporated on June 29, 2023 under the laws of the PRC and a wholly owned subsidiary of GreenHash Limited.

Nanjing Skycorp Consulting Co., Ltd. (“WFOE”, former name is Guangzhou Skycorp Consulting Co., Ltd) is a limited liability company incorporated on July 14, 2020 under the laws of the PRC and a wholly owned subsidiary of GreenHash Limited.

Ningbo Skycorp Solar Co., Ltd. is a limited liability company incorporated on April 26, 2011 under the laws of the PRC with 49% equity interest owned by Ningbo eZsolar Co., Ltd. and 51% equity interest owned by Nanjing Skycorp Consulting Co., Ltd.

Nanjing Skycorp Solar Co., Ltd. is a limited liability company incorporated on July 21, 2025 under the laws of the PRC with 49% equity interest owned by Ningbo eZsolar Co., Ltd. and 51% equity interest owned by Nanjing Skycorp Consulting Co., Ltd.

Ningbo Skycorp Electric Power Development Co., Ltd is a limited liability company incorporated on September 3, 2025 under the laws of the PRC and a wholly owned subsidiary of Ningbo eZsolar Co., Ltd.

Ningbo Dcloud Information Technology Co., Ltd. is a limited liability company incorporated on July 27, 2015 under the laws of the PRC and a wholly owned subsidiary of Ningbo Skycorp Solar Co., Ltd.

Zhejiang Skycorp New Energy Co., Ltd. is a limited liability company incorporated on April 23, 2015 under the laws of the PRC and a wholly owned subsidiary of Ningbo Skycorp Solar Co., Ltd.

Zhejiang Pntech Technology Co., Ltd. is a limited liability company incorporated on April 26, 2021 under the laws of the PRC and with 65% equity interest owned by Ningbo Skycorp Solar Co., Ltd.

Ningbo Pntech New Energy Co., Ltd. is a limited liability company incorporated on April 22, 2011 under the laws of the PRC and with 75% equity interest owned by Ningbo Skycorp Solar Co., Ltd.

Pntech (Shaoxing) New Energy Co., Ltd is a limited liability company incorporated on June 27, 2024 under the laws of the PRC with 49% equity interest owned by Zhejiang Skycorp New Energy Co., Ltd. and 51% equity interest owned by Zhejiang Pntech Technology Co., Ltd.

Ningbo Zhuoxing Logistics Co., Ltd. is a limited liability company incorporated on April 16, 2025 under the laws of the PRC and with 60% equity interest owned by Ningbo Skycorp Solar Co., Ltd.

Ningbo Yijiaren New Energy Co., Ltd. is a limited liability company incorporated on April 26, 2021 under the laws of the PRC and wholly owned subsidiary of Ningbo Skycorp Solar Co., Ltd.

Nanjing Skycorp Trading Co., Ltd is a limited liability company incorporated on May 23, 2025 under the laws of the PRC and 90% equity interest owned by Nanjing Skycorp Solar Co., Ltd.

Hangzhou Yunwei Energy Technology Co., Ltd is a limited liability company incorporated on August 15, 2025 under the laws of the PRC and wholly owned subsidiary of Ningbo Skycorp Electric Power Development Co., Ltd.

Hangzhou Lin' an Xisheng New Energy Co., Ltd is a limited liability company incorporated on September 24, 2025 under the laws of the PRC and wholly owned subsidiary of Ningbo Skycorp Electric Power Development Co., Ltd.

Jiaxing Lvxi Energy Development Co., Ltd is a limited liability company incorporated on September 26, 2025 under the laws of the PRC and wholly owned subsidiary of Ningbo Skycorp Electric Power Development Co., Ltd.

Nanjing Skycorp Metal Technology Co., Ltd is a limited liability company incorporated on August 7, 2025 under the laws of the PRC and 60% equity interest owned by Nanjing Skycorp Trading Co., Ltd.

Details of the Company and its subsidiaries (together the “Company”) are set out in the table as follows:

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

As reported in the accompanying consolidated financial statements, the Company had negative cash flows from operating activities of US$ 6.46 and recorded a net loss of US$ 7.14 million during the six months ended March 31, 2026.

The Company has a plan of operations and acknowledges that its plan of operations may not result in generating positive working capital in the near future. To meet the cash requirements for the next 12 months from the issuance date of this report, the Company is undertaking a combination of the remediation plans:

Management has taken certain steps to address these concerns, including: (i) In response to an approximate 12.5% price hike in copper, the Company intends to conduct targeted product research and development and diversify its supplier base to mitigate raw material price volatility and reduce overall operating costs, (ii) Management is actively exploring alternative financing solutions, including new credit facilities, debt maturity extensions and potential equity offerings to maintain sufficient liquidity for daily operations and scheduled debt repayments, and (iii) The Company plans to expand its solar power station development and operation business to generate recurring stable revenue streams and improve consolidated profitability.

The Company will be able to support its continuous operations and to meet its payment obligations as and when liabilities fall due within the next twelve months from the unaudited consolidated balance sheet date and the date of consolidated financial statements for the financial year ended March 31, 2026. Accordingly, the Company’s consolidated financial statements are prepared on a going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations as they fall due. In the event the Company will not be able to continue as a going concern, adjustments will have to be made to reflect the situation that assets will need to be realized other than in the amounts at which they are currently recorded in the unaudited consolidated balance sheet. In addition, the Company may have to provide for further liabilities that might arise and to reclassify non-current assets and liabilities as current assets and liabilities.

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period and accompanying notes, including allowance for doubtful accounts, lower of cost and net realizable value of inventory, the useful lives of property and equipment, and long-lived assets, valuation allowance for deferred tax assets and uncertain tax opinions. Actual results could differ from those estimates. 

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities Exchange Commission (“SEC”).

The consolidated financial statements include the financial statements of the Company and its subsidiaries. A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meetings of the board of directors or to govern the financial and operating activities. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date on that control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealized gains on transactions between Company entities are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company. The consolidation of all entities has been accounted for in accordance with ASC 810.

The reporting currency of the Company is the U.S. dollar (“$”). The functional currency of subsidiaries located in China is the Chinese Renminbi (“RMB”), the functional currency of subsidiaries located in Hong Kong is the Hong Kong dollars (“HK$”). For the entities whose functional currency is the RMB, and HK$, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments are reported as foreign currency translation adjustment and are shown as a separate component of other comprehensive loss in the Consolidated Statements of Operations and Comprehensive Income.

Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

The Company’s assets and liabilities are translated into United States dollars from RMB at year-end exchange rates, and its revenues and expenses are translated at the average exchange rate during the year. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

The RMB is not freely convertible into foreign currencies and all foreign exchange transactions must be conducted through authorized financial institutions.

The Company applies Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures which defines fair value, establishes a framework for measuring fair value and expands financial statement disclosure requirements for fair value measurements.

ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability.

ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:

The carrying amounts of the Company’s financial instruments approximate their fair values because of their short-term nature. The Company’s financial instruments include cash and cash equivalents, accounts receivable, due from related parties, Prepaid expenses and other current assets, due to related parties, accounts payable and other payables, and tax payables.

Cash and cash equivalents consist of cash on hand, bank deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and have insignificant risk of changes in value related to changes in interest rates and have original maturities of three months or less when purchased.

Banker’s acceptances and time deposits that are restricted as to withdrawal for use or pledged as security are reported as restricted cash. Restricted cash is classified into current and non-current based on the length of restricted period. The Company’s restricted cash primarily represents banker’s acceptances.

Accounts receivables are stated at the original amount less an allowance for doubtful receivables, if any, based on a review of all outstanding amounts at period end. An allowance is also made when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. The Company analyzes the aging of the customer accounts, coverage of credit insurance, customer concentrations, customer credit-worthiness, historical and current economic trends and changes in its customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts.

Notes receivable, net represent short-term notes receivable issued by reputable financial institutions entitle the Company to receive the full-face amount from the financial institutions at maturity, which generally range from one to twelve months from the date of issuance.

The Company adopted ASU 2016-13 Financial Instruments — Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under CECL is applicable to financial assets measured at amortized cost, including accounts receivable. After the Company’s assessment of CECL, no material difference was found comparing to the amount recorded in accordance with the previous method.

The Company accounts for its digital assets, which are comprised solely of ETH, as indefinite-lived intangible assets in accordance with ASC 350-60, Intangibles—Goodwill and Other-Crypto Assets. The Company’s digital assets are initially recorded at cost. ETH assets are measured at fair value as of each reporting period. The Company determines the fair value of its ETH in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices, the active exchange that the Company has determined is its principal market for ETH (Level 1 inputs). Changes in fair value are recognized as incurred in the Company’s Consolidated Statements of Operations, within “Unrealized loss on digital assets”, within operating expenses in the Company’s Consolidated Statement of Operations.

Inventories, primarily consisting of (1) assembly items, such as PV cable, PV connectors and accessories, etc.; (2) trading goods for sales, including servers and PV cables, etc.; and (3) parts, mainly refers to raw materials for solar PV products. They are stated at the lower of cost or net realizable value. The Company applies the weighted average cost method to its inventory. Where there is evidence that the utility of inventories, in their disposal in the ordinary course of business, will be less than cost, whether due to physical deterioration, obsolescence, changes in price levels, or other causes, the inventories are written down to net realizable value.

Prepaid expenses and other current assets primarily consist of prepayments made to vendors and services providers for future services that have not been provided, employee advances, other receivables from third parties. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. As of March 31, 2026, and September 30, 2025, management believes that the Company’s other current assets are not impaired.

The equity method of accounting for investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions, operational decision-making authority, and material intercompany transactions. Under this method of accounting, our proportionate share of the net income (loss) resulting from these investments is reported in “Loss on equity investments” in the consolidated statements of operations since the activities of the investees are closely aligned with, and a critical part of, our operations. The carrying value of our equity method investments is reported as “Equity method investments” in our consolidated balance sheets. For all equity method investments, we record our share of an investee’s income or loss on every year. We evaluate material events occurring during the year to determine whether the effects of such events should be disclosed in our financial statements. We classify distributions received from equity method investments using the cumulative earnings approach on our consolidated statements of cash flows. A change in our proportionate share of an investee’s equity resulting from issuance of common shares or in-substance common shares by the investee to third parties is recorded as a gain or loss in our consolidated statements of operations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 323, “Investments-Equity Method and Joint Ventures” (Subtopic 10-40-1). We assess investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. If the decline in value is considered to be other than temporary, the investment is written down to its estimated fair value, which establishes a new cost basis in the investment. We did not record any such impairment charges for any periods presented.

Property and equipment are stated at cost less accumulated depreciation and depreciated on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition. The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

The depreciation of property and equipment is calculated using the straight-line method over their estimated useful lives, as follows:

The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Intangible assets are carried at cost less accumulated amortization and impairment, if any, Intangible assets are amortized using straight-line method over the estimated economic useful lives of the assets. The useful lives are based on the Company’s historical experience with similar assets and take into account the anticipated technological changes. The amortization expenses are recorded in general and administrative expenses depending upon the nature of activities.

The Company reviews the estimated useful lives of assets annually to determine the amount of amortization expense to be recorded during any financial year. The amortization expense for future periods is adjusted if there are significant changes from previous estimates. Estimated useful lives of intangible assets are as follows:

The Company’s intangible assets with definite useful lives primarily consist of patent rights. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives of ten years or twenty years. In accordance with Article 42 of the Patent Law of the people’s Republic of China, management clearly confirm that the term of patent right for utility model and design patent is 10 years.

Impairment of Long-Lived Assets

Long-lived assets including property and equipment, right of use assets, intangible assets and other non-current assets other than goodwill are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for long-lived assets that management expects to hold or use is based on the amount by which the carrying value exceeds the fair value of the asset. Judgment is used in estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of the long-lived assets’ fair value. There were no impairment losses on long-lived for the years ended March 31, 2026, and September 30, 2025.

The Company adopted ASC 842, “Leases” (“ASC 842”) on January 1, 2019, using the modified retrospective transition method through a cumulative-effect adjustment in the period of adoption rather than retrospectively adjusting prior periods and the package of practical expedient. The Company categorized leases with contractual terms longer than twelve months as either operating or finance lease.

Right-of-use (“ROU”) assets represent the Company’s rights to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term, reduced by lease incentives received, plus any initial direct costs, using the discount rate for the lease at the commencement date. If the implicit rate in lease is not readily determinable for the Company’s operating leases, the Company generally uses the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company elected not to separate non-lease components from lease components; therefore, it will account for lease components and the non-lease components as a single lease component when there is only one vendor in the lease contract for the office leases. Lease payments may be fixed or variable; however, only fixed payments or in-substance fixed payments are included in the lease liability calculation. Variable lease payments mainly include costs related to certain IDC facilities leases which are determined based on actual number of usages. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred.

For operating leases, lease expense is recognized on a straight-line basis over the lease term. For finance leases, lease expense is recognized as depreciation on a straight-line basis over the lease term and interest using the effective interest method.

Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU assets and lease liabilities on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term. There was no impairment for operating right-of-use lease assets as of March 31, 2026, and September 30, 2025.

Borrowings are initially recognized at fair value, net of upfront fees incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.

The Company’s subsidiaries established in the PRC are required to make appropriations to certain non-distributable reserve funds.

In accordance with the laws applicable to the foreign invested enterprises established in the PRC, the Company’s subsidiaries registered as wholly foreign owned enterprises have to make appropriations from their after-tax profits (as determined under generally accepted accounting principles in the PRC (“PRC GAAP”) to non-distributable reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the Company.

In addition, in accordance with the PRC Company Law, the Company’s subsidiaries, registered as Chinese domestic companies, must make appropriations from their after-tax profits as determined under the PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be 10% of the after-tax profits as determined under PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the Company. Appropriation to the discretionary surplus fund is made at the discretion of the Company.

As of March 31, 2026, and September 30, 2025, appropriation of $212,009 and $138,408 were made to the statutory surplus fund by the Company.

The Company follows the rules and guidance set out under ASC 606, Revenue from Contracts with Customers (“ASC 606”) for revenue recognition. The core principle of ASC 606 requires an entity to recognize revenues to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. In according with ASC 606, revenues are recognized when the Company satisfies the performance obligations by delivering the promised services to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The following five steps are applied to achieve that core principle:

Step 1: Identify the contract with the customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when the Company satisfies a performance obligation.

Revenue is measured at the fair value of the consideration received or receivable for the sales of products and services in the ordinary course of the Company’s activities.

When another party is involved in providing goods or services to a customer, the Company determines whether the nature of its promise is a performance obligation to provide the specified services itself (i.e. the Company is a principal) or to arrange for those services to be provided by the other party (i.e. the Company is an agent).

The Company is a principal if it controls the specified services before those services are transferred to a customer. The Company is an agent if its performance obligation is to arrange for the provision of the specified services by another party. In this case, the Company does not control the specified services provided by another party before those services are transferred to the customer. When the Company acts as an agent, it recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the specified services to be provided by the other party. This evaluation is performed separately for each performance obligation identified. For the year ended March 31, 2026 and 2025, there was no revenue recognized on a net basis where the Company is acting as an agent.

Revenue is recognized when or as the control of the services is transferred to a customer. Depending on the terms of the contract and the laws that apply to the contract, control of the goods and services may be transferred over time or at a point in time.

Control of the services is transferred over time if the Company’s performance: 

(a) provides all of the benefits received and consumed simultaneously by the customer;

(b) creates and enhances an asset that the customer controls as the Company performs;

(c) does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.

If control of the services transfers over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the goods and services. This evaluation is performed separately for each performance obligation identified.

Revenue from sales of solar PV products and the comparative HPC revenue

The Company sells solar PV products, the comparative HPC revenue and their accessories to customers. The transaction price in the contract is fixed and reflected in the sales order and invoice. The performance obligation is to transfer promised products to a customer upon acceptance by customers, and the Company is primarily responsible for fulfilling the promise to deliver the products to the customers. There is only one performance obligation in the contract and there is no need for allocation. The Company presents the revenue generated from its sales of products on a gross basis as the Company is a principal. The revenue is recognized at a point in time when the Company satisfies the performance obligation.

Revenue from other services

Revenue from other services mainly includes international freight and logistics services and PV power station operation services.

The revenue of PV power station operation services mainly from the sale of electricity to customers. Each contract contains a single performance obligation, which is the promise to deliver electricity to the customer. As the electricity is supplied continuously over the contract term, this single performance obligation is satisfied over time in accordance with ASC 606-10-25-27. The Company recognizes revenue for each period based on the volume of energy delivered to the customers. The electricity consumed by customers is determined for the period from the date of their last meter reading to the current reading. The Company's performance obligation is satisfied over time because the customer simultaneously receives and consumes the benefits provided by the Company as the electricity is delivered. The Company measures progress towards complete satisfaction of the performance obligation using the output method, specifically based on the actual electricity delivered, as evidenced by the monthly settlement statement issued by the state grid operator according to ASC 606-10-25-31~37.Accordingly, revenue is recognized at the end of each month based on the consideration confirmed in the settlement statement. No allocation of the transaction price is required, as only one performance obligation exists in the contract. Pursuant to ASC 606-10-55-36~40 the Company acts as principal as the Company (1) operates the power generation facilities and is directly responsible for generating, transmitting, and delivering electricity to the grid or end customers;(2) bears the primary obligation to deliver electricity in accordance with the contract terms; (3) is responsible for resolving any service failures, outages, or quality issues, and bears the associated costs of remediation; (4) may have the ability to set or influence the selling price of electricity to customers, subject to applicable regulatory frameworks. 

Freight and logistics services

The Company recognizes revenue from international freight and logistics services including customs clearance handling in accordance with ASC 606. Each contract contains a single combined performance obligation covering end-to-end cross-border transportation arrangement, customs clearance processing and auxiliary logistics services performed through third-party service providers, the Company bears primary service risks throughout the entire logistics delivery process, has independent pricing discretion and controls the underlying services before they are transferred to customers, thereby acting as the principal for such international logistics arrangements, and revenue is recognized at a point in time based on the bill of lading date upon full satisfaction of the performance obligation.

Cost of revenue consists primarily of material cost, labor cost, irradiation fee and other related expenses that are directly attributable to the Company’s principal operations.

General and administrative expenses consist primarily of salaries, professional consulting fees, rental and other general corporate-related expenses.

Selling and marketing expenses consist primarily of salaries, packaging fees, other expenses related to sales activities.

Research and development (“R&D”) expenses are expensed as incurred. R&D expenses are related to certain software research and development for internal use.

R&D expenses primarily consist of raw materials, employee salary and benefit costs.

Income tax

The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company’s operating subsidiaries in PRC are subject to examination by the relevant tax authorities. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB100,000 ($14,452). In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

The Company did not accrue any liability, interest or penalties related to uncertain tax positions in its provision for income taxes line of its consolidated statements of operations and comprehensive income for the six months ended March 31, 2026, and the years ended September 30, 2025. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.

Value added taxes

PN Smart Energy Group’s China subsidiaries are subject to value-added tax (“VAT”) for providing services and sales of products.

Revenue from providing services and sales of products is generally subject to VAT at applicable tax rates, and subsequently paid to PRC tax authorities after netting input VAT on purchases. The excess of output VAT over input VAT is reflected in tax payable. The Company reports revenue net of PRC’s VAT for all the periods presented in the Consolidated Statements of Operations and Comprehensive Income.

Earnings per share is computed by dividing net income attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding for the period. Diluted earnings per share is calculated by dividing net income attributable to ordinary shareholders of the Company as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary shares and dilutive ordinary equivalent shares outstanding during the period. Potentially dilutive shares are excluded from the computation if their effect is anti-dilutive.

A non-controlling interest in subsidiaries of the Company represents the portion of the equity (net assets) in the subsidiaries not directly or indirectly attributable to the Company. Non-controlling interests are presented as a separate component of equity on the Consolidated Balance Sheets, and net income and other comprehensive income attributable to non-controlling shareholders are presented as a separate component on the Consolidated Statements of Operations and Comprehensive (Loss) Income.

The Company has organized its operations into two operating segments. The segments reflect the way the Company evaluates its business performance and manages its operations by the Company’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Company’s CODM has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company.

The Company has determined that it operates in two operating segments, i.e. the business to manufacture and sell solar PV products and solar power system solutions service, and other services.

Although the Company’s long-lived assets are substantially all located in the PRC, for the six months ended March 31, 2026, revenue from domestic sales within the PRC accounted for 58% of total revenue, export sales to other countries accounted for 42%. So the Company presented geographical segments as requested.

Comprehensive (loss) income is defined to include all changes in equity of the Company during a period arising from transactions and other event and circumstances except those resulting from investments by shareholders and distributions to shareholders. For the six months ended March 31, 2026, and the year ended September 30, 2025 presented, the Company’s comprehensive (loss) income includes net (loss) income and other comprehensive income, which consists of the foreign currency translation adjustments.