🧾 What This Document Is

This is a Form 6-K, which is a report foreign companies like Dogness (based in the British Virgin Islands) file with the SEC to share important events with U.S. investors. This specific report contains the company's unaudited consolidated financial statements for the six months ended December 31, 2025 (the second half of its fiscal year). It's essentially a mid-year check-up on the business.

👉 In simple terms: This filing gives us a detailed, but unaudited, look at how Dogness performed financially from July 1 to December 31, 2025, compared to the same period a year ago.

🏢 What The Company Does

Dogness (International) Corp designs, manufactures, and sells pet products. Think of everything from traditional leashes, collars, and harnesses to "intelligent" pet tech like automatic feeders or water fountains. They sell these products worldwide, mainly through large retailers.

👉 In simple terms: They make and sell stuff for pets, both the basic kind and the high-tech, smart gadget kind.

💰 Financial Highlights

This was a tough six months for Dogness, with performance declining sharply from the prior year.

Revenue & Profit:

Revenue dropped to $7.7 million from $12.1 million (-36%).
Gross Profit fell to $0.87 million from $3.4 million (-75%).
Net Loss ballooned to ($5.18 million) from ($1.82 million).

Key Expenses:

Selling expenses doubled to $1.23 million.
A major one-time hit: an $1.12 million impairment loss on a long-term investment.

Per Share:

Loss per share was ($0.29), up from ($0.14) in the prior year period.
This is based on more shares outstanding (17.8 million vs 12.8 million).

👉 Why it matters: The big story here is a significant contraction in sales and profitability. Revenue fell much faster than costs could be cut, leading to a much larger loss.

🚀 Key Moves & Events

Two significant events shaped this period:

Investment Write-Down: The company took a $1.12 million impairment loss on its investment in Dogness Network Technology Co., Ltd. This investee entered liquidation in January 2026 due to continuous losses, so Dogness had to mark its investment down to zero.
New Strategic Investment: In May 2025, Dogness acquired a 19.5% stake in a company called Dogness Intelligent Technology Co., Ltd. (DITC). They paid for it by issuing shares and warrants valued at $19 million. This signals a push into new intelligent pet product technology.

👉 Why it matters: One smart-tech bet went sour (Dogness Network), while they made a new, major bet on another (DITC). This shows a high-risk, high-reward strategy in the competitive pet tech space.

📦 Financial Position

Looking at the balance sheet snapshot:

Total Assets slightly decreased to $114.5 million from $116.8 million.
The biggest change on the asset side was a sharp drop in Cash to $6.6 million from $12.8 million. This was used for operations and buying property/equipment.
Property, Plant & Equipment increased to $63.4 million, indicating continued investment in facilities.
Total Liabilities stayed relatively flat at $19.3 million.
Shareholders' Equity decreased to $95.1 million due to the accumulated losses.

👉 Why it matters: The company is burning through its cash reserves to fund operations and capital investments while it's unprofitable. The equity cushion is eroding.

💸 Cash Flow Story

The cash flow statement tells a clear story of strain:

Operating Activities: Used $1.6 million in cash. Even after adjusting for non-cash items like the impairment, the core business is consuming cash.
Investing Activities: Used $4.4 million, primarily for purchasing property, plant, and equipment.
Financing Activities: Used $0.38 million, mainly repaying loans.

Net Result: Cash decreased by $6.2 million during the period. Starting with $12.8 million, they ended with $6.6 million.

👉 Why it matters: The negative operating cash flow is a red flag. The company is relying on its cash balance to stay afloat and fund growth, which isn't sustainable long-term without a turnaround in profitability.

🔮 What's Next & Risks

Based on the filings, here's what to watch:

Turnaround Challenge: The company must reverse the steep revenue decline and return to profitability. The new investment in DITC is a key part of this strategy.
Liquidity: With only $6.6 million in cash and ongoing losses, securing additional financing or quickly improving cash generation will be critical.
Related Party Reliance: The CEO, Mr. Silong Chen, is crucial. He personally guarantees company loans and provides advances. His control through Class B shares (3 votes each) is absolute.
Geographic & Customer Concentration: Sales are heavily reliant on international markets and a few large customers, creating risk.

👉 Why it matters: The company is at a crossroads. It's investing for the future (DITC) while facing immediate financial pressure. Its survival and success are heavily tied to execution and the support of its controlling shareholder.

⚖️ Big Picture

Strengths (👍):

Established player in the growing pet products market.
Diversified product line from traditional to intelligent products.
Strategic investment in new technology (DITC).

Risks (⚠️):

Deteriorating financials: Sharp sales decline and growing losses.
Cash burn: Rapid decrease in cash reserves.
High customer concentration: Revenue depends on a few large retailers.
Related party dependency: Heavy reliance on CEO for guarantees and support.
Investment risk: New $19M bet on DITC is unproven.

🧠 The Analogy

Dogness is like a pet store owner who saw a new high-tech dog toy (DITC) and invested heavily in it, while their traditional leash-and-collar sales suddenly dropped off a cliff. They're now using their savings to pay the rent and keep the lights on, betting that the new toy will become a bestseller before the money runs out.

📇 Key Contacts & People

The filing identifies these key individuals and entities:

Mr. Silong Chen: Chief Executive Officer, Chairman of the Board (Controlling Shareholder)
Mr. Junqiang Chen: Relative of Mr. Silong Chen
Linsun Smart Technology Co., Ltd (“Linsun”): Equity investee (10% ownership)
Dogness Network Technology Co., Ltd (“Dogness Network”): Equity investee (13% ownership, in liquidation)
Dongguan Rural Commercial Bank: Primary lender
Zhangzhou Meijia Metal Product Co., Ltd (“Meijia”): Wholly-owned manufacturing subsidiary

🧩 Final Takeaway

Dogness is in a precarious financial position with shrinking revenue, significant losses, and dwindling cash. Its future hinges on successfully integrating its major new investment in intelligent pet tech (DITC) to reignite growth before its current resources are exhausted.

Dogness (International) Corp — 6-K Filing