LONG-TERM INVESTMENTS

12 Months Ended

Dec. 31, 2025

NOTE 7 – LONG-TERM INVESTMENTS

(a)	Equity method investments, net

Equity method investments consisted of the following:

	December 31, 2025			December 31, 2024

Hangzhou Entropy Yu Equity Investment Partnership (Limited Partnership) (“Entropy Yu”) ⁽¹⁾	$	2,159,481		$	2,068,951
Able 2rent GmbH (DEU) ⁽²⁾		108,332			89,533
Less: impairment⁽²⁾		(108,332	)		-
Total equity method investment, net		2,159,481			2,158,484
Less: equity method investment, net, held for discontinued operations		-			(89,533	)
Equity method investment, net, held for continuing operations	$	2,159,481		$	2,068,951

(1)

On September 25, 2022, the Company invested RMB15,400,000 (approximately $2,202,171) in Entropy Yu to acquire 99.355% of the partnership entity’s equity interest. The Company accounts for the investment under the equity method because the Company controls 50% of voting interests in partnership matters and material matters must be agreed upon by all partners. The Company has the ability to exercise significant influence over Entropy Yu.

(2)

On March 22, 2022, CAE invested EUR100,000 (approximately $117,360) in Able 2rent GmbH (DEU) to acquire 50% of its equity interest. For the year ended December 31, 2025, the Company recognized full impairment of Able 2rent GmbH (DEU). The impairment was primarily due to a sustained decline in the investee’s operating performance and the lack of sufficient, reliable financial and operational information to support the recoverability of the carrying amount.

(b)	Equity investment without readily determinable fair values, net

Equity investments without readily determinable fair values, net consisted of the following:

	December 31, 2025		December 31, 2024

HW Electro Co., Ltd. ⁽¹⁾	$	1,000,000	$	1,000,000
EEE Truck Solutions Group Inc. ⁽²⁾		693,780		-
Total equity investment without readily determinable fair values, net		1,693,780		1,000,000
Less: equity investment without readily determinable fair values, net, held for discontinued operations		-		-
Equity investment without readily determinable fair values, net, held for continuing operations	$	1,693,780	$	1,000,000

(1)	The Company owned approximately 3% of equity interest in HW Electro Co., Ltd. (“HWE”) at initial investment cost of $1,000,000.

(2)

In 2025, the Company acquired certain investment in a private company through a nonmonetary transaction by transferring the ownership of eight vehicles produced by the Company in the normal business with an aggregate market value of $693,780. Upon the completion of the transaction, the Company obtained 12% of equity interest in EEE Truck Solutions Group Inc. (the “EEE”), with no significant influence which leads the transaction to be in the scope of ASC 321 and the investment was recorded as an equity investment without readily determinable fair value, with initial cost based on the fair value of the vehicles transferred which is in accordance with ASC 606-10-32-21 through 24 based on the selling price of the goods promised to the customer due to the lack of fair value of the equity interests in EEE acquired.

(c)	Debt security investments

On July 24, 2023, the Company purchased a $1,000,000 convertible note (the “Convertible Note”) from third party Acton, Inc. (the “Issuer”), with the interest rate of 5% per annum and due in June 2024. At any time on or after the maturity date, the convertible loan will convert into shares equal to the quotient obtained by dividing the outstanding principal balance and unpaid accrued interest of the convertible loan as of the date of such conversion by the applicable conversion price. In July and August 2023, the Company paid a total amount of $600,000 to the Issuer. On August 30, 2024, the two parties made amendments to the purchase agreement to reduce the total purchase amount from $1,000,000 to $600,000 and extend the maturity date to July 24, 2025. On August 7, 2025, the two parties made amendments to extend the maturity date to July 24, 2026. Before the Maturity Date, the Issuer is entitled to calling for immediate conversion of the Convertible Note (for amount of full principal and accrued interest as of the date of conversion) provided that any of the following three conditions is satisfied: i) The Issuer closes a financing transaction of not less than $3,000,000 with pre-money valuation not lower than $38,250,000; ii) A person or entity, or a group acquires more than fifty percent (50%) of the outstanding voting power of the Issuer or all or substantially all of the assets of the Issuer; iii) The Issuer completes an initial public offering at a major US stock exchange with total market cap not lower than $38,250,000. Given Acton’s limited operating scale, declining revenue, weak liquidity and the uncertain recoverability of its assets, management concluded that the recoverability of future cash flows associated with this financial asset is highly uncertain. Accordingly, for the year ended December 31, 2025, the Company recognized full credit loss of this investment. The balance of debt investments, held for continuing operations was nil and $641,712, respectively, as of December 31, 2025 and 2024.