Table of Contents

JIANGSU YITONG HIGH-TECH CO., LTD

TABLE OF CONTENTS

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Jiangsu Yitong High-tech Co., Ltd

We have audited the accompanying consolidated balance sheets of Jiangsu Yitong High-tech Co., Ltd. and its subsidiaries (the “Company”) as of December 31, 2024 and 2025, the related consolidated statements of operations, changes in equity, and cash flows for the years ended December 31, 2023, 2024 and 2025, and the related notes.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Convenience translation

Our audit also comprehended the translation of Renminbi amounts into United States dollar amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note 2 to the financial statements. Such United States dollar amounts are presented solely for the convenience of readers outside the People’s Republic of China.

Auditor’ Responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in consolidated financial statements. The procedures selected depend on our judgement, including the assessment of the risk of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2025, and the results of its operations and its cash flows for the years ended December 31, 2023, 2024 and 2025, in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

/s/ BROOK & PARTNERS CPAs

We have served as the Company’s auditor since 2023.

Beijing, the People’s Republic of China

April 24, 2026

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JIANGSU YITONG HIGH-TECH CO., LTD

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

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

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JIANGSU YITONG HIGH-TECH CO., LTD

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

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

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JIANGSU YITONG HIGH-TECH CO., LTD

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

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

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JIANGSU YITONG HIGH-TECH CO., LTD

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

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JIANGSU YITONG HIGH-TECH CO., LTD

CONSOLIDATED STATEMENTS OF CASH FLOWS – CONTINUED

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

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

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION

Jiangsu Yitong High-tech Co., Ltd (“the Company”, formerly known as Jiangsu Yitong Electronics Co., Ltd) is a company with limited liability incorporated under the laws of the People’s Republic of China (the “PRC” or the “China”) in November 1999.

The Company’s shares have been listed in Shenzhen Stock Exchange since May 2011 (“the Listing”).

On January 5, 2021, the controlling shareholder entered the agreement with Anhui Shunyuan Xinke Management Consulting Partnership (Limited Partnership) (“Anhui Shunyuan”) to transfer 29.99% equity interest of the Company with an aggregate cash consideration of RMB959.7 million. Anhui Shunyuan is a subsidiary of Zepp Health Corporation (“Zepp”). In May 2022, Anhui Shunyuan acquired another 0.01% equity interest of the Company through Stock Exchange Trading System. After the transaction, Anhui Shunyuan accounted for 30.0% equity interest of the Company. As of December 31, 2024 and 2025, Anhui Shunyuan accounted for 29.88% equity interest of the Company, respectively.

The Company and its subsidiaries (together “the Group”) are primarily engaged in the business of developing, manufacturing and sells of cable television network equipment, providing services to intelligent video monitoring engineering and developing, designing and sells of chips and sensors, and sells of medical devices.

Zepp accounted for its investment in the Group using the equity method. As the Group is considered to be a significant equity method investee of Zepp for the fiscal year of 2024 and 2025, its financial statements are included as an exhibit to the Annual Report of Zepp on Form 20-F in accordance with Securities and Exchange Commission (“SEC”) Rule 3-09 of Regulation S-X.

As of December 31, 2025, details of the Group’s major subsidiaries were as follows:

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

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

Principles of consolidation

The consolidated financial statements include the financial statements of the Group and its wholly-owned subsidiaries. All transactions and balances between the Group and its subsidiaries have been eliminated upon consolidation.

Use of estimates

In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but are not limited to, the assessment of the allowance for doubtful accounts, inventory valuation, useful lives of property and equipment and intangible assets, impairment of long-lived assets, purchase price allocations for business combination, uncertain tax position and valuation allowance for deferred tax assets. Actual results could differ from those estimates.

Fair value

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Fair value - continued

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Group’s financial instruments consist primarily of cash and cash equivalents, restricted cash, accounts receivable, amounts due from a related party, installment payment receivables, notes payable, accounts payable, and amounts due to related parties. The carrying amounts of current portion of these financial instruments approximates their fair values due to the short-term maturities of these instruments.

The non-financial assets, such as property and equipment would be measured at FV as they were determined to be impaired.

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and demand deposits placed with commercial banks with an original maturity of three months or less, which are unrestricted from withdrawal or use, or which have original maturities of three months or less when purchases. The Group maintains all of the bank accounts in mainland China.

Restricted cash

Restricted cash consists of guarantee and deposits made to the bank for bank acceptance notes (or notes payable) issued by the Group. When the Group issues the bank acceptance notes, the banks require the Group to make a deposit for 30% of the face value of the bank acceptance notes issued as collateral. The deposits for unsettled bank acceptance notes were recorded as restricted cash in the consolidated balance sheets as of December 31, 2024 and 2025.

Accounts receivable

Accounts receivables represent those receivables derived in the ordinary course of business, net of allowance for doubtful accounts.

Allowance for doubtful accounts

The Group maintains an allowance for doubtful accounts for estimated losses on uncollected accounts receivable. Management considers the following factors when determining the collectability of specific accounts: creditworthiness of customers, aging of the receivables, past transaction history with customers and their current condition, changes in customer payment terms, specific facts and circumstances, and the overall economic climate in the industries the Group serves. The Group evaluates its receivable for expected credit losses on a regular basis. The Group maintains an estimated allowance for credit loss to reduce its receivables to the amount that it believes will be collected. The Group uses the creditworthiness of customers, aging of the receivables, past transaction history with customers and their current condition, changes in customer payment terms, specific facts and circumstances, and the overall economic climate in the industries the Group serves to monitor the Group’s receivables within the scope of expected credit losses model and use these as a basis to develop the Group’s expected loss estimates. As of December 31, 2024 and 2025, the Group had RMB8,945 and RMB7,998 allowance for doubtful account recorded in accounts receivable.

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

Inventories, net

Inventories of the Group consist of raw materials, finished goods, work in process and inventoried costs relating to long-term contracts. Inventories are stated at the lower of cost or net realizable value on a weighted average basis. Inventory costs include expenses that are directly or indirectly incurred in the purchase, including shipping and handling costs charged to the Group by suppliers, and production of manufactured product for sale, such as include the cost of materials and supplies used in production, direct labor costs and allocated overhead costs such as depreciation, insurance, employee benefits, and indirect labor. Cost is determined using the weighted average method. The Group assesses the valuation of inventory and periodically writes down and writes off the value for estimated excess and obsolete inventory based upon the product life cycle.

Installment payment receivables, net

Installment receivables consist of receivables in relation to installment receivables resulting from engineering services provided by the Group. Installment receivables is recorded upon the revenue recognized and consists net of the unearned interest income and allowance for doubtful accounts. It is recognized as current or non-current assets in the balance sheets based on the remaining collection terms.

Property, plant and equipment, net

Property and equipment are carried at cost, net of accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance, which do not materially extend the useful lives of the assets, are expensed as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation and amortization are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition.

Estimated useful lives are as follows:

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Intangible assets, net

Intangible assets purchased from third parties and related parties are initially recorded at cost and amortized on a straight-line basis over their estimated economic useful lives. Estimated useful lives are as follows:

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Business combination

Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed, any non-controlling interests of the acquiree as well as the contingent consideration at the acquisition date, if any, are measured at their fair values as of the acquisition date. Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any non-controlling interest of the acquiree and fair value of previously held equity interest in the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. The determination and allocation of fair values to the identifiable net assets acquired and liabilities assumed is based on various assumptions and valuation methodologies requiring considerable judgment from management. Although the Group believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from forecasted amounts and the differences could be material.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combination. The Group’s goodwill at December 31, 2024 and 2025 was related to its acquisition of Hefei Yunxi in December 2024. In accordance with ASC 350, Goodwill and Other Intangible Assets, recorded goodwill amount is not amortized but is tested for impairment annually or more frequently if events on changes in circumstance indicate that it might be impaired.

Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the stock prices, business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The estimation of fair value of each reporting unit using a discounted cash flow methodology also requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the Group’s business, estimation of the useful life over which cash flows will occur and determination of the Group’s weighted average cost of capital. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results and market conditions. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for the reporting unit.

Revenue recognition

The Group’s revenues are derived principally from developing, manufacturing and sells of broadcasting and television equipment, providing services to intelligent video monitoring engineer, developing and sells of chips and sensors and sells of medical devices. Value added taxes (“VAT”) are presented as a reduction of revenues.

Revenue recognition on product sales

For all products sales, the Group requires a contract or purchase order which quantifies pricing, quantity and product specifications. The Group’s sales arrangements generally do not contain variable considerations and are short-term in nature. The Group recognizes revenue at a point in time when the customer obtains control of the products. Revenue is recognized as performance obligation under the terms of a contract with the customer are satisfied and control of the product has been transferred to the customer. Sales of goods do not include multiple products and/or service elements.

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Revenue recognition – Continued

Revenue from engineering services and others

The Group provides intelligent video monitoring engineering services to customers and revenue of engineering services is recognized over time by measuring the progress towards complete satisfaction of that performance obligation. The progress towards complete satisfaction of the performance obligation is measured based on the Group’s efforts or inputs to the satisfaction of the performance obligation, by reference to the contracts cost incurred up to the end of reporting period as a percentage of total estimated costs for each contract. The Group also generates other revenue from repairment and rental services, which are immaterial.

Cost of revenue

Cost of revenues consists primarily of material costs, salaries and benefits for staff engaged in production and engineering activities, depreciation and amortization, outsourced services and related expenses which are directly attributable to the production of products. The shipping and handling fees billed to the customers are presented as part of cost of revenues as well.

Selling and marketing expenses

Selling and marketing expenses consist primarily of promotion and advertising expenses, staff costs and other daily expenses which are related to the selling and marketing departments. These expenses are charged to the consolidated statement of operations as incurred.

General and administrative expenses

General and administrative expenses consist primarily of salaries and welfare expenses and related expenses for employees involved in general corporate functions, including accounting, legal and human resources; and costs associated with use by these functions of facilities and equipment, such as traveling and general expenses, professional service fees and other related expenses. These expenses are charged to the consolidated statement of operations as incurred.

Research and development expenses

Research and development expenses consist primarily of salaries and benefits for research and development personnel, materials, office expenses, amortization and depreciation expenses associated with research and development activities.

Income taxes

Income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred tax assets and liabilities are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized.

The Group accounts for uncertain tax positions by reporting a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. Tax benefits are recognized from uncertain tax positions when the Group believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The Group recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expenses.

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Value added tax (“VAT”)

The Group’s PRC subsidiaries are subject to value added tax (“VAT”) and related surcharges based on gross sales or service price depending on the type of services provided in the PRC (“output VAT”), and the VAT may be offset by VAT paid by the Group on service purchases (“input VAT”). The applicable rate of output VAT or input VAT for the Group is 2%, 5%, 6%, 9% and 13%. Gross sales or service price charged to customers is subject to output VAT at the rate and subsequently paid to PRC tax authorities after netting input VAT on purchases incurred during the period. The Group’s revenues are presented net of VAT collected on behalf of PRC tax authorities and its related surcharges; the VAT is not included in the consolidated statements of operations. All of the VAT returns filed by the Group’s subsidiaries in the PRC, have been and remain subject to examination by the tax authorities for five years from the date of filing.

Share-based payment

Share-based payment transactions with employees are measured based on the grant date value of the equity instrument. The Group that grants awards with graded, that is with multiple, vesting dates elect to recognize the awards on a straight-line basis as if it were several separate awards. The requisite service period is generally the vesting period of the award. The Group elects to recognize forfeitures then they occur.

Foreign currencies

The reporting currency of the Group is RMB. The Group’s principal country of operations is the PRC. The financial position and results of its operations are determined using the RMB, the local currency, as the functional currency.

Convenience translation

Translations of balances in the consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows from RMB into US$ as of and during the year ended December 31, 2025 is solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.9931, representing the rate as certified by the statistical release of the Federal Reserve Board of United States on December 31, 2025. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into U.S. dollar at that rate on December 31, 2025, or at any other rate.

Net loss per share

Basic net loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted income per ordinary share reflects the potential dilution that would occur if securities were exercised or converted into ordinary shares. The Group had restricted shares which could potentially dilute basic income per ordinary share in the future. To calculate the number of shares for diluted income per ordinary shares, the effect of the restricted shares is computed using the treasury stock method.

Concentration of credit risk

Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable. The Group places its cash and cash equivalents with financial institutions with high credit ratings and quality.

The Group conducts credit evaluations of third-party customers and related parties, and generally does not require collateral or other security from its third-party customers and related parties. The Group establishes an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific third-party customers and related parties.

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Concentration of credit risk – Continued

Major Customers

Accounts receivable concentration of credit risk is as below:

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Amounts due from related parties’ concentration of credit risk is as below:

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Revenue concentration of credit risk is as below:

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Major Suppliers

Accounts payable concentration of credit risk is as below:

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Concentration of credit risk – Continued

Major Suppliers – continued

Amounts due to related parties, current and non-current concentration of credit risk is as below:

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Purchase concentration of credit risk is as below:

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Recent accounting pronouncements

In November 2024, the FASB issued ASU No. 2024-03, which requires disaggregated disclosure of income statement expenses for public business entities (PBEs). The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this guidance should be applied retrospectively to all prior periods presented. Early adoption is permitted. The Group is currently in the process of evaluating the disclosure impact of adopting ASU 2024-03.

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NOTE 3 — INVENTORIES, NET

Inventories, net consisted of the following:

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During the years ended December 31, 2023, 2024 and 2025, the Group recorded a provision for the excess and obsolete inventories amounting to RMB803, RMB1,201 and RMB2,058, respectively.

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 4 — INSTALLMENT RECEIVABLES, NET

Installment receivables relating to the installment for engineering services consisted of the following:

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As of December 31, 2025, the due date of installment receivables is as follows:

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NOTE 5 — PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following:

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The Group has recorded depreciation expenses of RMB11,223, RMB9,362 and RMB6,393 during the years ended December 31, 2023, 2024 and 2025, respectively. Impairment of nil, RMB608 and nil was recorded during the years ended December 31, 2023, 2024 and 2025.

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 6 — INTANGIBLE ASSETS, NET

Intangible assets, net consisted of the following:

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Amortization expenses for the intangible assets for the years ended December 31, 2023, 2024 and 2025, were RMB6,219, RMB10,952 and RMB15,488, respectively. Future amortization expenses relating to the existing intangible assets amounted to RMB14,705 for the next year, RMB8,849 for the second year, RMB5,924 for the third year, RMB1,372 for the fourth year, RMB748 for the fifth year and RMB7,965 thereafter.

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NOTE 7 – GOODWILL

The changes in the carrying amount of goodwill are as follows:

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In addition, based on impairment assessment adopted as of December 31, 2025, no impairment has been noted.

NOTE 8 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

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NOTE 9 — BANK BORROWING

In July 2023, Hefei Yunxi entered into a RMB10,000 three-year revolving facility agreement with Bank of China Hefei Branch. The facility is guaranteed by Hefei Yunxi’s non-controlling shareholders and collateralized by property owned by them. As of December 31, 2024, the total outstanding borrowing was RMB10,000, during which RMB1,103 are repayable within one year and are included in “Short-term bank borrowing” on the consolidated balance sheets. The borrowing was fully repaid as of December 31, 2025.

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 10 — RELATED PARTY TRANSACTIONS AND BALANCES

Nature of relationships with related parties:

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Transactions with related parties

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Balances with related parties

As of December 31, 2024 and 2025, the balances with related parties were as follows:

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JIANGSU YITONG HIGH-TECH CO., LTD

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”)

except for number of shares and per share data, or otherwise noted)

NOTE 11 — REVENUE

Disaggregation of revenue

The following table summarized disaggregated revenue for the years ended December 31, 2023, 2024 and 2025:

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Contract balances

The following table provides information about receivables, contract assets, installment payment receivables and advance from customers from contracts with customers:

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The Group recognizes accounts receivable, contracts assets, amounts due from a related party, installment receivables in its consolidated balance sheets when it performs a service in advance of receiving consideration and it has the unconditional right to receive consideration. Contract assets is unbilled amount related to the progress towards complete satisfaction under engineering services agreements. Payments received from customers are based on the payment terms established in its contracts. Such payments are initially recorded to advance from customers and are recognized into revenue as the Group satisfies its performance obligations. Substantially all of advance from customers will be recognized as revenue during the Group’s following fiscal year.

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NOTE 12 — INCOME TAXES

The Group are subject to the 25% standard enterprise income tax rate except for the Group and Whale Microelectronics that qualify as a high and new technology enterprise (“HNTE”), which are subject to a tax rate of 15%. The Group began to qualify as HNTE in 2020 and renewed the HNTE certificate in November 2023. Accordingly, the Group was subject to a tax rate of 15% during the years ended December 31, 2023, 2024 and 2025. Whale Microelectronics qualified as a HNTE in November 2023 and is subject to a tax rate of 15% during the years ended December 31, 2023, 2024 and 2025.

The provision for income tax consisted of the following: