Contingent Liability

6 Months Ended

Jun. 30, 2024

Contingent Liability

Contingent Liability

Note 18. Contingent Liability

The Company has committed to issuing bonus and restricted shares of the Company’s common stock to its employees, contingent upon the achievement of specified sales and profit goals. These shares will be granted as part of the Company’s employee incentive program.

As of the reporting date, the issuance of these shares is contingent upon the Company meeting its sales and profit targets. The potential obligation to issue these shares represents a contingent liability, as the issuance is dependent on future events that are not wholly within the control of the Company.

The fair value of the contingent shares will be measured and recognized as an expense in the period in which the performance conditions are satisfied. Until such time, no liability is recognized in the financial statements.

Number of Shares and Locations:

o Ningbo Office: 303,441 bonus shares and 303,441 restricted shares.

o Beijing Office: 1,061,691 bonus and restricted shares.