Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Document Information Line Items | |
Entity Registrant Name | Zhongchao Inc. |
Trading Symbol | ZCMD |
Document Type | 20-F |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
Entity Central Index Key | 0001785566 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Non-accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Entity Emerging Growth Company | true |
Entity Shell Company | false |
Entity Ex Transition Period | false |
ICFR Auditor Attestation Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-39229 |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | Nanxi Creative Center |
Entity Address, Address Line Two | Suite 218 |
Entity Address, Address Line Three | 841 Yan’an Middle Road |
Entity Address, City or Town | Jing’An District |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 200040 |
Title of 12(b) Security | Class A Ordinary shares, par value $0.0001 |
Security Exchange Name | NASDAQ |
Entity Interactive Data Current | Yes |
Document Accounting Standard | U.S. GAAP |
Auditor Firm ID | 5395 |
Auditor Name | Marcum Asia CPAs LLP |
Auditor Location | New York, NY |
Business Contact | |
Document Information Line Items | |
Entity Address, Address Line One | Nanxi Creative Center |
Entity Address, Address Line Two | Suite 218 |
Entity Address, Address Line Three | 841 Yan’an Middle Road |
Entity Address, City or Town | Jing’An District |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 200040 |
Contact Personnel Name | Weiguang Yang |
City Area Code | 021 |
Local Phone Number | 32205987 |
Class A Ordinary Share | |
Document Information Line Items | |
Entity Common Stock, Shares Outstanding | 20,531,423 |
Class B Ordinary Share | |
Document Information Line Items | |
Entity Common Stock, Shares Outstanding | 5,497,715 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 11,520,453 | $ 13,914,982 |
Short-term investments | 518,416 | 296,158 |
Accounts receivable | 6,772,988 | 9,218,883 |
Inventories | 189,106 | |
Prepayments | 1,027,989 | 394,971 |
Prepayments – related party | 115,989 | |
Loans receivable | 1,840,000 | 2,660,668 |
Due from a related party | 226,179 | 392,305 |
Other current assets | 493,040 | 375,709 |
Total Current Assets | 22,704,160 | 27,253,676 |
Investment in equity method investees | 1,179,300 | 1,993,285 |
Investment in an equity security | 84,606 | 150,000 |
Goodwill | 5,767,504 | |
Property and equipment, net | 3,890,947 | 3,923,086 |
Deposit for property | 239,481 | 181,233 |
Prepayments for lease of land | 304,787 | 353,347 |
Intangible assets, net | 912,054 | 30,259 |
Right of use assets | 1,666,777 | 205,824 |
Deferred tax assets | 1,864,729 | 2,176,710 |
Total Assets | 38,614,345 | 36,267,420 |
Current Liabilities | ||
Accounts payable | 140,834 | 38,933 |
Advances from customers | 395,263 | 7,432 |
Income tax payable | 2,292,765 | 2,478,273 |
Operating lease liabilities, current portion | 480,633 | 88,968 |
Accrued expenses and other liabilities | 855,540 | 974,801 |
Total Current Liabilities | 4,165,035 | 3,588,407 |
Operating lease liabilities, noncurrent portion | 1,221,845 | 112,591 |
Deferred tax liabilities | 208,200 | |
Total Liabilities | 5,595,080 | 3,700,998 |
Commitments and Contingencies | ||
Equity | ||
Class A Ordinary Share (par value $0.0001 per share, 450,000,000 shares authorized; 20,531,423 and 19,453,423 shares issued and outstanding at December 31, 2022 and 2021, respectively) | 2,054 | 1,946 |
Class B Ordinary Share (par value $0.0001 per share, 50,000,000 shares authorized; 5,497,715 and 5,497,715 shares issued and outstanding at December 31, 2022 and 2021, respectively) | 550 | 550 |
Additional paid-in capital | 24,998,388 | 22,986,975 |
Statutory reserve | 1,315,017 | 1,199,054 |
Retained earnings | 4,124,037 | 7,180,891 |
Accumulated other comprehensive (loss) income | (511,824) | 1,197,006 |
Total Zhongchao Inc. Shareholders’ Equity | 29,928,222 | 32,566,422 |
Non-controlling interests | 3,091,043 | |
Total Equity | 33,019,265 | 32,566,422 |
Total Liabilities and Equity | $ 38,614,345 | $ 36,267,420 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class A Ordinary Share | ||
Ordinary Share par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary Share authorized | 450,000,000 | 450,000,000 |
Ordinary Share issued | 20,531,423 | 19,453,423 |
Ordinary Share outstanding | 20,531,423 | 19,453,423 |
Class B Ordinary Share | ||
Ordinary Share par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary Share authorized | 50,000,000 | 50,000,000 |
Ordinary Share issued | 5,497,715 | 5,497,715 |
Ordinary Share outstanding | 5,497,715 | 5,497,715 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenues | $ 14,151,516 | $ 16,296,770 | $ 17,989,788 |
Cost of revenues | (7,794,852) | (6,857,944) | (6,117,640) |
Gross Profit | 6,356,664 | 9,438,826 | 11,872,148 |
Operating Expenses | |||
Selling and marketing expenses | (2,099,968) | (3,137,316) | (3,441,941) |
General and administrative expenses | (6,799,634) | (5,863,373) | (3,124,301) |
Research and development expenses | (411,524) | (758,878) | (816,553) |
Total Operating Expenses | (9,311,126) | (9,759,567) | (7,382,795) |
(Loss) Income from Operations | (2,954,462) | (320,741) | 4,489,353 |
Interest income, net | 142,014 | 175,987 | 146,965 |
Other income, net | 262,442 | 34,001 | 305,566 |
(Loss) Income Before Income Taxes | (2,550,006) | (110,753) | 4,941,884 |
Income tax (expenses) benefits | (272,313) | 349,418 | (484,787) |
Net (Loss) Income | (2,822,319) | 238,665 | 4,457,097 |
Net (income) loss attributable to noncontrolling interests | (118,572) | 1,283 | |
Net (Loss) Income Attributable to Zhongchao Inc.’s shareholders | (2,940,891) | 238,665 | 4,458,380 |
Other Comprehensive (Loss) Income | |||
Foreign currency translation adjustment | (1,715,262) | 281,793 | 1,259,984 |
Comprehensive (Loss) Income | (4,537,581) | 520,458 | 5,717,081 |
Total comprehensive (income) loss attributable to noncontrolling interests | (112,139) | 1,283 | |
Total Comprehensive (Loss) Income Attributable to Zhongchao Inc.’s Shareholders | $ (4,649,722) | $ 520,458 | $ 5,718,364 |
Weighted Average Number of Ordinary Share Outstanding | |||
Basic (in Shares) | 25,997,757 | 24,938,513 | 24,425,637 |
(Loss) Earnings per Share | |||
Basic (in Dollars per share) | $ (0.113) | $ 0.01 | $ 0.183 |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive (Loss) Income (Parentheticals) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Diluted | 25,997,757 | 24,938,513 | 24,425,637 |
Diluted | $ (0.113) | $ 0.010 | $ 0.183 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) | Class A Ordinary Share | Class B Ordinary Share | Additional paid-in capital | Statutory Reserve | Retained earning | Accumulated other comprehensive (loss) income | Non-controlling interest | Total |
Balance at Dec. 31, 2019 | $ 1,610 | $ 550 | $ 12,044,855 | $ 415,813 | $ 3,267,087 | $ (344,771) | $ (46,617) | $ 15,338,527 |
Balance (in Shares) at Dec. 31, 2019 | 16,102,420 | 5,497,715 | ||||||
Share-based compensation expenses | 168,350 | 168,350 | ||||||
Issuance of Class A Ordinary Shares pursuant to initial public offering, net of issuance costs | $ 332 | 10,609,851 | 10,610,183 | |||||
Issuance of Class A Ordinary Shares pursuant to initial public offering, net of issuance costs (in Shares) | 3,315,003 | |||||||
Issuance of restricted Class A Ordinary Shares to non-executive directors | $ 2 | (2) | ||||||
Issuance of restricted Class A Ordinary Shares to non-executive directors (in Shares) | 18,000 | |||||||
Net (loss) income | 4,458,380 | (1,283) | 4,457,097 | |||||
Appropriation of statutory reserve | 385,689 | (385,689) | ||||||
Buy out of a non-controlling interests | (47,900) | 47,900 | ||||||
Foreign currency translation adjustments | 1,259,984 | 1,259,984 | ||||||
Balance at Dec. 31, 2020 | $ 1,944 | $ 550 | 22,775,154 | 801,502 | 7,339,778 | 915,213 | 31,834,141 | |
Balance (in Shares) at Dec. 31, 2020 | 19,435,423 | 5,497,715 | ||||||
Share-based compensation expenses | 211,823 | 211,823 | ||||||
Issuance of restricted Class A Ordinary Shares to non-executive directors | $ 2 | (2) | ||||||
Issuance of restricted Class A Ordinary Shares to non-executive directors (in Shares) | 18,000 | |||||||
Net (loss) income | 238,665 | 238,665 | ||||||
Appropriation of statutory reserve | 397,552 | (397,552) | ||||||
Foreign currency translation adjustments | 281,793 | 281,793 | ||||||
Balance at Dec. 31, 2021 | $ 1,946 | $ 550 | 22,986,975 | 1,199,054 | 7,180,891 | 1,197,006 | 32,566,422 | |
Balance (in Shares) at Dec. 31, 2021 | 19,453,423 | 5,497,715 | ||||||
Issuance of Class A Ordinary Shares in connection with public offering | $ 106 | 1,850,638 | 1,850,744 | |||||
Issuance of Class A Ordinary Shares in connection with public offering (in Shares) | 1,060,000 | |||||||
Share-based compensation expenses | $ 2 | 160,775 | 160,777 | |||||
Share-based compensation expenses (in Shares) | 18,000 | |||||||
Acquisition of subsidiaries | 2,978,903 | 2,978,903 | ||||||
Net (loss) income | (2,940,891) | 118,572 | (2,822,319) | |||||
Appropriation of statutory reserve | 115,963 | (115,963) | ||||||
Foreign currency translation adjustments | (1,708,830) | (6,432) | (1,715,262) | |||||
Balance at Dec. 31, 2022 | $ 2,054 | $ 550 | $ 24,998,388 | $ 1,315,017 | $ 4,124,037 | $ (511,824) | $ 3,091,043 | $ 33,019,265 |
Balance (in Shares) at Dec. 31, 2022 | 20,531,423 | 5,497,715 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities: | |||
Net (loss) income | $ (2,822,319) | $ 238,665 | $ 4,457,097 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||
Provision of doubtful accounts receivable | 753,447 | 1,449,827 | 336,367 |
Depreciation and amortization expenses | 383,286 | 341,608 | 202,325 |
Gain from disposal of property and equipment | (96,921) | ||
Amortization of right of use assets | 347,025 | 361,369 | 222,353 |
Share-based compensation expenses | 160,777 | 211,823 | 168,350 |
Deferred tax expenses (benefits) | 134,125 | (1,346,616) | (58,424) |
Changes in fair value of short-term investments | 240,489 | 58,403 | 10,331 |
Downward adjustments in investments in an equity security | 65,394 | ||
Equity investment loss | 80 | 13,758 | 25,622 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 1,076,292 | (104,230) | (5,486,914) |
Prepayments | (659,496) | 171,144 | (197,402) |
Prepayments – related party | (118,888) | ||
Inventories | (193,833) | ||
Other current assets | 66,148 | 1,302,009 | (1,143,200) |
Accounts payable | 103,825 | (375,144) | 260,350 |
Advances from customers | 369,249 | 496 | 6,398 |
Income tax payable | 3,557 | 905,733 | 535,981 |
Accrued expenses and other liabilities | (167,585) | (4,430) | 179,738 |
Lease liabilities | (306,392) | (362,567) | (230,819) |
Deferred government grants | (325,992) | ||
Net Cash (Used in) Provided by Operating Activities | (661,740) | 2,861,848 | (1,037,839) |
Cash Flows from Investing Activities: | |||
Purchases of property and equipment | (1,615,905) | (1,799,860) | (160,602) |
Proceeds from disposal of property and equipment | 1,112,440 | ||
Payments of deposits for property purchase | (245,467) | (688,267) | |
Investments in short-term investments | (996,638) | (2,043,259) | |
Release from short-term investments | 533,891 | 1,678,367 | |
Investment in a limited partnership | (1,217,039) | ||
Investment in equity method investees | (708,129) | ||
Investment in an equity security | (150,000) | ||
Acquisition of a subsidiary | (3,055,432) | ||
Loan (provided to) repayment from related parties | 139,694 | (387,549) | 14,489 |
Loans provided to third parties | (1,032,219) | (3,725,211) | |
Loans repayment from third parties | 1,806,772 | 1,075,098 | |
Increase of cash in connection with acquisition of subsidiary | 6,206 | ||
Net Cash Used in Investing Activities | (3,346,658) | (4,017,284) | (4,094,678) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of ordinary shares in connection with initial public offering, net of offering cost | 11,886,363 | ||
Payment of expenses relating to initial public offerings | (388,709) | ||
Proceeds from issuance of ordinary shares in connection with direct offering | 1,850,744 | ||
Net Cash Provided by Financing Activities | 1,850,744 | 11,497,654 | |
Effect of exchange rate changes on cash and cash equivalents | (236,875) | (2,529) | 875,258 |
Net (decrease) increase in cash and cash equivalents | (2,394,529) | (1,157,965) | 7,240,395 |
Cash and cash equivalents at beginning of year | 13,914,982 | 15,072,947 | 7,832,552 |
Cash and cash equivalents at end of year | 11,520,453 | 13,914,982 | 15,072,947 |
Supplemental Cash Flow Information | |||
Cash paid for interest expense | |||
Cash paid for income tax | 134,232 | 91,464 | 2,642 |
Noncash investing activities | |||
Right of use assets obtained in exchange for operating lease obligations | 1,774,723 | 555,639 | 37,919 |
Due from a third party for disposal of property and equipment | 210,868 | ||
Acquisition of property and equipment by settlement of deposits for property and equipment | $ 160,940 |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Zhongchao Inc. (“Zhongchao Cayman”, or the “Company”) is a holding company incorporated on April 16, 2019, under the laws of the Cayman Islands. The Company commenced operations on August 17, 2012, through its variable interest entity (“VIE”), Zhongchao Medical Technology (Shanghai) Limited (“Zhongchao Shanghai”), a limited liability company established under the laws of the PRC. The Company provides customized medical courses and customized medical training services to pharmaceutical enterprises, and not-for-profit organizations (“NFPs”) including medical associations, medical institutions, medical journals, medical foundations, hospitals and etc. in the PRC. The consolidated financial statements reflect the activities of Zhongchao Shanghai and each of the following entities: Name Background Ownership Zhongchao Group Inc. (“Zhongchao BVI”) ● A BVI company 100% owned by Zhongchao Cayman ● Incorporated on April 23, 2019 ● A holding company Zhongchao USA LLC (“Zhongchao USA”) ● A United States company 100% owned by Zhongchao Cayman ● Incorporated on 3 September, 2020 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology (no medical diagnosis and treatment activities allowed). Zhongchao Japan (“Zhongchao Japan”) ● A Japan company 100% owned by Zhongchao USA since December 2021. Before December 2021, 10% owned by Zhongchao USA and 90% owned by Mr. Weiguang Yang ● Incorporated on 1 October, 2020 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology (no medical diagnosis and treatment activities allowed). Zhongchao Group Limited (“Zhongchao HK”) ● A Hong Kong company 100% owned by Zhongchao BVI ● Incorporated on May 14, 2019 ● A holding company Beijing Zhongchao Zhongxing Technology Limited (“Zhongchao WFOE”) ● A PRC company and deemed a wholly foreign owned enterprise 100% owned by Zhongchao HK ● Incorporated on May 29, 2019 ● A holding company Zhongchao Shanghai ● A PRC limited liability company VIE of Beijing Zhongchao Zhongxing Technology Limited ● Incorporated on August 17, 2012 ● Engaged in technology development, technology transfer, and technical services in the field of medical technology, technical consulting in the field of network technology, and medical information consulting Shanghai Maidemu Cultural Communication Corp. (“Shanghai Maidemu”) ● A PRC limited liability company 100% owned by Zhongchao Shanghai ● Incorporated on March 12, 2015 ● Planning for cultural and artistic exchanges, designing, producing, acting for and publishing various kinds of advertisements, and medical consultation (no medical diagnosis and treatment activities allowed). Shanghai Huijing Information Technology Co., Ltd., (“Shanghai Huijing”) ● A PRC limited liability company 100% owned by Shanghai Maidemu ● Incorporated on September 28, 2016 ● Engaged in technology development, transfer, service and consulting in the fields of computer technology, graphic designing, website page designing, planning cultural and artistic exchanges. Shanghai Zhongxun Medical Technology Co., Ltd. (“Shanghai Zhongxun”) ● A PRC limited liability company 100% owned by Zhongchao Shanghai ● Incorporated on May 27, 2017 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology (no medical diagnosis and treatment activities allowed). Shanghai Zhongxin Medical Technology Co., Ltd (“Shanghai Zhongxin”) ● A PRC limited liability company 93.33% owned by Shanghai Zhongxun* ● Incorporated on October 10, 2018 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. Beijing Zhongchao Boya Medical Technology Co., Ltd. (“Beijing Boya”) ● A PRC limited liability company 70% owned by Zhongchao Shanghai, and 30% owned by Mr. Zhengbo Ma on behalf of Zhongchao Shangha before December 8, 2021, and 30% owned by Shanghai Lingzhong Enterprise Management LLP on behalf of Zhongchao Shanghai after December 8, 2021 ● Incorporated on April 27, 2020 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. Hainan Zhongteng Medical Technology Co., Ltd. (“Hainan Zhongteng”) ● A PRC limited liability company 100% owned by Beijing Boya ● Incorporated on July 16, 2021 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. Zhixun Internet Hospital (Liaoning) Co., Ltd. (“Liaoning Zhixun”) ● A PRC limited liability company 100% owned by Beijing Boya ● Incorporated on July 6, 2020 ● Engaged in online hospital services, medical services, elderly nursing services, remote healthcare management services, healthcare consulting services, sales of medical appliances and other medical products. Shanghai Xinyuan Human Resources Co., Ltd. (“Shanghai Xinyuan”) ● A PRC limited liability company 100% owned by Shanghai Zhongxin ● Incorporated on January 13, 2021 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. Hainan Muxin Medical Technology Co., Ltd. (“Hainan Muxin”) ● A PRC limited liability company 100% owned by Shanghai Zhongxin ● Incorporated on July 21, 2021 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. Ningxia Zhongxin Internet Hospital Co., Ltd. (“Ningxia Zhongxin”) ● A PRC limited liability company 100% owned by Shanghai Zhongxin ● Incorporated on May 18, 2021 and cancelled on September 1, 2022 ● Engaged in online hospital operation, provide online medical service, online consultation, prescription information services, and medication retails. Chongqing Xinjiang Pharmaceutical Co., Ltd. (“Chongqing Xinjiang”) ● A PRC limited liability company 100% owned by Shanghai Zhongxun ● Incorporated on January 18, 2022 ● Engaged in trading of patented drugs Beijing Yisuizhen Technology Co., Ltd. (“Beijing Yisuizhen”) ● A PRC limited liability company 100% owned by Hainan Muxin ● Incorporated on November 8, 2021 ● Acquired by the Company on August 31, 2022 ● Provision of online platform for communication between hospitals and patients West Angel (Beijing) Health Technology Co., Ltd. (“West Angel”) ● A PRC limited liability company 60% owned by Beijing Yisuizhen ● Incorporated on July 1, 2003 ● Acquired by the Company on August 31, 2022 ● Provision of online platform for communication between hospitals and patients * 51% of the equity interest owned by Shanghai Zhongxun before November 2020. Through certain entrustment agreements signed in November 2020, Mr. Weiguang Yang, Beijing Zhongchao Yixin Management Consulting Partnership, LLP (“Zhongchao Yixin”), and Beijing Zhongren Yixin Management Consulting Partnership, LLP (“Zhongren Yixin”), hold 19%, 20% and 10% of the equity interest of Shanghai Zhongxin on behalf of Shanghai Zhongxun, respectively. As a result, Shanghai Zhongxun owned 100% of Shanghai Zhongxin’s equity interest as of December 31, 2021. In the year of 2022, Mr. Weiguang Yang transferred 6.67% to four shareholders of West Angel, as a part of consideration to acquire 60% equity interest in West Angel. Shanghai Zhongxun owns 93.33% of Shanghai Zhongxin’s equity interest as of December 31, 2022. On August 14, 2019, Zhongchao WFOE entered into a series of agreements (the “VIE Agreements”) with Zhongchao Shanghai and the shareholders of Zhongchao Shanghai. The VIE Agreements allows Zhongchao Cayman to consolidate the financial statements and received the economic benefits of the operation results of Zhongchao Shanghai through the VIE Agreements. Under U.S. GAAP, for accounting purposes, Zhongchao Cayman was deemed to have a controlling financial interest in, and be the primary beneficiary of Zhongchao Shanghai, because pursuant to the VIE Agreements, the operations of Zhongchao Shanghai were solely for the benefit of Zhongchao WFOE and ultimately, Zhongchao Cayman. On August 14, 2019, Zhongchao Cayman completed a reorganization of entities under common control of Weiguang Yang, who owned a majority of the voting power of Zhongchao Cayman prior to the reorganization. Zhongchao Cayman, Zhongchao Group Inc. (“Zhongchao BVI”), and Zhongchao Group Limited (“Zhongchao HK”) were established as the holding companies of Zhongchao WFOE. Zhongchao WFOE is the primary beneficiary of Zhongchao Shanghai and its subsidiaries, and all of these entities are under common control which results in the consolidation of Zhongchao Shanghai and subsidiaries which have been accounted for as a reorganization of entities under common control at carrying value. The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the consolidated financial statements. Total assets and liabilities presented on the Company’s consolidated balance sheets and revenues, expenses, net incomes presented on consolidated statements of operations as well as the cash flows from operating, investing and financing activities presented on the consolidated statements of cash flows are substantially the financial positions, operations and cash flows of Zhongchao Shanghai and its subsidiaries. On August 15, 2019, Yantai Hanfujingfei Investment Centre (LP) (“Yantai HF”), a 6.25 % shareholder of Zhongchao Shanghai, planned to withdraw its equity interest in Zhongchao Shanghai (which is representative of 1,350,068 shares in Zhongchao Shanghai, among which 675,068 shares were issued by Zhongchao Shanghai and the remaining 675,000 shares were purchased from two existing shareholders), and to contribute the same amount of capital to Zhongchao Cayman directly. The Company and HF Capital Management Delta, Inc. (“HF Capital”), the sole member of which was the managing partner of Yantai HF , entered into a certain warrant agreement to purchase ordinary shares of the Company, pursuant to which the Company granted a warrant to HF Capital, who expects to exercise the warrant and receive the ordinary shares of the Company before the effective date and closing of the offering because these conditions are considered to be administrative procedures and there are no uncertainties of going through them. The warrant entitled HF Capital to purchase 1,350,068 Class A Ordinary Shares, representing 5.19% economic beneficial interest, or 1.31% of the voting ownership interest of the Company as of December 31, 2022, from the Company, if the following conditions are met: 1) All PRC governmental consent and approval required for HF Capital to exercise the warrant and payment of the capital contribution have been obtained, including without limitation, any approval or filing with respect to HF Capital’s investment into the Company, and payment by HF Capital of the capital contribution to the Company, and reasonable evidence thereof shall have been provided to the Company; 2) HF Capital has fully paid the capital contribution to Zhongchao Cayman; and 3) The Company released the paid-in capital of HF Capital from Zhongchao Shanghai The practice is solely a result of tax planning from HF Capital. As the warrant does not cause the Company to transfer or receive any assets, or exchange any other financial instruments on potentially favorable or unfavorable terms with shareholder. The warrant does not meet the definition of a financial instrument as defined in ASC 480 Distinguishing Liabilities from Equity On December 2, 2019, the registration of HF Capital’s withdrawal of its capital contribution in Zhongchao Shanghai was completed with local State Administration for Industry and Commerce. The paid-in capital of HF Capital in an amount of RMB20 million (approximately US$2.9 million) is currently being held in the corporate bank account of Zhongchao Shanghai and is to be deposited in a designated bank account mutually controlled by Zhongchao Shanghai and HF Capital after the completion of HF Capital’s ODI procedures and to be released as HF Capital’s capital contribution in Zhongchao Cayman. Class A Ordinary Shares issued and outstanding presented on the financial statements is reconciled with the number of shares legally as follows: December 31, December 31, Number of Class A Ordinary Shares legally issued and outstanding 19,181,355 18,103,355 Class A Ordinary Shares committed to be issued to HF Capital 1,350,068 1,350,068 Number of Class A Ordinary Shares outstanding and issued presented on the financial statements 20,531,423 19,453,423 VIE Agreements with Zhongchao Shanghai Due to the restrictions imposed by PRC laws and regulations on foreign ownership of companies engaged in value-added telecommunication services and certain other businesses, the Company operates its businesses in which foreign investment is restricted or prohibited in the PRC through certain PRC domestic companies. As such, Zhongchao Cayman consolidated Zhongchao Shanghai’s financial statements and received the economic benefits of the operation results of Zhongchao Shanghai through VIE Arrangements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such VIE Arrangements consist of a series of six agreements (collectively, the “VIE Arrangements”), which were signed on August 14, 2019. On August 1, 2020, all shareholders of Zhongchao Shanghai, except Mr. Yang and Shanghai Xingzhong Investment Management LP (“Shanghai Xingzhong,”) decided to withdraw their capital contribution from Zhongchao Shanghai (the “Capital Reduction”). Given the effect of the Capital Reduction, Mr. Yang became the 76.4% shareholder of Zhongchao Shanghai with the remaining equity interests held by Shanghai Xingzhong. On September 10, 2020, Zhongchao WFOE, and Zhongchao Shanghai, and its shareholders signed a confirmation agreement to confirm that the VIE Agreements entered on August 14, 2019 have been terminated because of the Capital Reduction. Accordingly, on September 10, 2020, to clarify the legal effect of the Capital Reduction and to sustain the effective control over Zhongchao Shanghai by the Company, Mr. Yang and Shanghai Xingzhong, as the shareholders of Zhongchao Shanghai, signed a series of VIE agreements with Zhongchao WFOE, the terms of which are substantially the same as those of the VIE Agreements except the number of shareholders of Zhongchao Shanghai reduced to two (the “2020 VIE Agreements”). Upon entry into the 2020 VIE Agreements, the VIE Agreements, except for the Master Exclusive Service Agreement dated August 14, 2020, were expired. On September 9, 2021, Shanghai Xingzhong transferred its equity interest in Zhongchao Shanghai to Shanghai Xingban Enterprises Management Partnership (Limited Partnership) (“Shanghai Xingban”). On September 10, 2021, to clarify the legal effect of such share transfer and to sustain the Company’s ability to consolidate the financial results of Zhongchao Shanghai, Mr. Yang and Shanghai Xingban, as the shareholders collectively holding 100% equity interest in Zhongchao Shanghai, signed a series of VIE agreements with Zhongchao WFOE (the “2021 VIE Agreements”). Upon entry into the 2021 VIE Agreements, the 2020 VIE Agreements dated August 14, 2020, except for the Master Exclusive Service Agreement, were expired. The significant terms of the VIE Arrangements, 2020 VIE Arrangements and 2021 VIE Agreements by and among the Company’s wholly-owned subsidiary, Zhongchao WFOE, its consolidated variable interest entity, Zhongchao Shanghai, and the shareholders of Zhongchao Shanghai are as follows: Agreements that Provide Us Effective Control over Zhongchao Shanghai The Company’s wholly foreign owned entity, Zhongchao WFOE, has entered into the following agreements with Zhongchao Shanghai and its shareholders. Equity Interest Pledge Agreement Pursuant to the equity interest pledge agreement dated August 14, 2019, each shareholder of Zhongchao Shanghai (collectively “Shareholder”) has pledged all of its equity interest in Zhongchao Shanghai to guarantee the shareholder’s and Zhongchao Shanghai’s performance of their obligations under the master exclusive service agreement, business cooperation agreement, exclusive option agreement and proxy agreement and power of attorney. If Zhongchao Shanghai or any of its shareholders breaches their contractual obligations under these agreements, Zhongchao WFOE, as pledgee, will be entitled to dispose the pledged equity interest entirely or partially. Each of the shareholders of Zhongchao Shanghai agrees that, during the term of the equity interest pledge agreement, it will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent of Zhongchao WFOE. In addition, Zhongchao WFOE has the right to collect dividends generated by the pledged equity interest during the term of the pledge. The term of the initial equity interest pledge agreement is 20 years. After the expiration of the term of initial pledge registration, Zhongchao WFOE may at its sole discretion require the Shareholders to extend the term of the equity interest registration. Proxy Agreement and Power of Attorney Pursuant to the proxy agreement and power of attorney dated August 14, 2019, each shareholder of Zhongchao Shanghai has irrevocably appointed Zhongchao WFOE to act as such shareholder’s exclusive attorney-in-fact to exercise all shareholder rights, including, but not limited to, voting on all matters of Zhongchao Shanghai requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in Zhongchao Shanghai, oversee and review Zhongchao Shanghai’s operation and financial information. Zhongchao WFOE is entitled to designate any person to act as such shareholder’s exclusive attorney-in-fact without notifying or the approval of such shareholder, and if required by PRC law, Zhongchao WFOE shall designate a PRC citizen to exercise such right. Each proxy agreement power of attorney will remain in force for so long as the Zhongchao Shanghai exists. The shareholders of Zhongchao Shanghai do not have the right to terminate this agreement or revoke the appointment of the attorney-in-fact without the prior written consent of Zhongchao WFOE Spouse Consent Letters Pursuant to the Spouse Consent Letters dated August 14, 2019, the spouse of each married shareholder of Zhongchao Shanghai, unconditionally and irrevocably agreed not to assert any rights over the equity interest in Zhongchao Shanghai held by and registered in the name of their spouse. In addition, each of them agreed to be bound by the VIE Arrangements described here if the spouse obtains any equity interest in Zhongchao Shanghai for any reason. Master Exclusive Service Agreement Under the master exclusive service agreement between Zhongchao WFOE and Zhongchao Shanghai dated August 14, 2019, Zhongchao WFOE has the exclusive right to provide Zhongchao Shanghai with technical support, consulting services and other services. Zhongchao WFOE has the right to designate and appoint, at its sole discretion, any entities affiliated with the Zhongchao WFOE to provide any and all services. The service fees are calculated and paid on a yearly basis and at the amount that equals to 100% of the consolidated net profits of Zhongchao Shanghai. Zhongchao WFOE may adjust the service fee at its discretion after taking into account multiple factors, such as the difficulty of the services provided, the time consumed, the content and commercial value of services provided and the market price of comparable services. Zhongchao WFOE owns the intellectual property rights arising out of the performance of this agreements. Zhongchao Shanghai shall seek approval from Zhongchao WFOE prior to entering into any contracts obtaining the same or similar services as provided under the Master Exclusive Service Agreement. This agreement will remain effective as long as Zhongchao Shanghai exists, unless Zhongchao WFOE advance written notice to Zhongchao Shanghai and its shareholders or upon the transfer of all the equity interest held by Zhongchao Shanghai’s shareholders to Zhongchao WFOE and/or a third party designated by Zhongchao WFOE. Agreements that Provide Us with the Option to Purchase the Equity Interest in Zhongchao Shanghai Business Cooperation Agreement Under the business cooperation agreement dated August 14, 2019, without Zhongchao WFOE’s prior written consent, Zhongchao Shanghai agrees not to engage in any transaction which may materially affect its asset, obligation, right or operation, including but not limited to: any activities not within its normal business scope, merger and acquisition, offering any loan to any third party and incurring any debt from any third party. Zhongchao Shanghai shall seek approval from Zhongchao WFOE prior to entering into any material contract, except the contracts executed in the ordinary course of business. Zhongchao Shanghai shall cause the persons designated by Zhongchao WFOE to be the directors and executive officers of Zhongchao Shanghai. This agreement will remain effective as long as Zhongchao Shanghai exists, unless Zhongchao WFOE advance written notice to Zhongchao Shanghai and its shareholders or upon the transfer of all the equity interest held by Zhongchao Shanghai’s shareholders to Zhongchao WFOE and/or a third party designated by Zhongchao WFOE. Exclusive Option Agreement Pursuant to the exclusive option agreement dated August 14, 2019, each shareholder of Zhongchao Shanghai has irrevocably granted Zhongchao WFOE an exclusive option to purchase, or have its designated person or persons to purchase, at its discretion, to the extent permitted under PRC law, all or part of the shareholder’s equity interests in Zhongchao Shanghai. The purchase price is equal to the lowest price allowable under PRC laws and regulations at the time of the transfer. Zhongchao Shanghai has agreed that without Zhongchao WFOE’s prior written consent, Zhongchao Shanghai shall cause the persons designated by Zhongchao WFOE to be the directors and executive officers of Zhongchao Shanghai, not amend its articles of association, increase or decrease the registered capital, sell or otherwise dispose of its assets or beneficial interest, create or allow any encumbrance on its assets or other beneficial interests, provide any loans to any third parties, enter into any material contract, merge with or acquire any other persons or make any investments, or distribute dividends to the shareholders. The shareholders of Zhongchao Shanghai have agreed that, without Zhongchao WFOE’s prior written consent, they will not dispose of their equity interests in Zhongchao Shanghai or create or allow any encumbrance on their equity interests. Moreover, without Zhongchao WFOE’s prior written consent, no dividend will be distributed to Zhongchao Shanghai’s shareholders, and if any of the shareholders receives any profit, interest, dividend or proceeds of share transfer or liquidation, the shareholder must give such profit, interest, dividend and proceeds to Zhongchao WFOE. These agreements will remain effective as long as Zhongchao Shanghai exists unless Zhongchao WFOE advance written notice to Zhongchao Shanghai and the shareholders or upon the transfer of all the equity interest held by the shareholders to Zhongchao WFOE and/or its designee. The Company has concluded that the Company is the primary beneficiary of Zhongchao Shanghai and its subsidiaries, and should consolidate their financial statements. The Company is the primary beneficiary based on the Proxy Agreement and Power of Attorney entered into as part of the VIE Agreements that each equity holder of Zhongchao Shanghai assigned their rights as a shareholder of Zhongchao Shanghai to Zhongchao WOFE. These rights include, but are not limited to, voting on all matters of Zhongchao Shanghai requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in Zhongchao Shanghai, oversee and review Zhongchao Shanghai’s operation and financial information. As such, the Company, through Zhongchao WOFE, is deemed to hold all of the voting equity interest in Zhongchao Shanghai and its subsidiaries. For the periods presented, the Company has not provided any financial or other support to either Zhongchao Shanghai or its subsidiaries. However, pursuant to the Master Exclusive Services Agreement, the Company may provide complete technical support, consulting services and other services during the term of the VIE agreements. Though not explicit in the VIE agreements, the Company may provide financial support to Zhongchao Shanghai and its subsidiaries to meet its working capital requirements and capitalization purposes. The terms of the VIE Agreements and the Company’s plan of financial support to the VIE were considered in determining that the Company is the primary beneficiary of the VIE. Accordingly, the financial statements of the VIE are consolidated in the Company’s consolidated financial statements. Based on the foregoing VIE Agreements, Zhongchao WFOE consolidated the financial statements |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Principal of consolidation Affiliates are entities controlled by the Company. Control exists when the Company has the power, directly and indirectly, to govern the financial and operating policies of an entity and be exposed to the variable returns from its activities. The financial statements of affiliates are included in the consolidated financial statements from the date that control commences until the date that control ceases. The consolidated financial statements include the accounts of Zhongchao Cayman, its subsidiaries and VIE and VIE’s subsidiaries, and Zhongchao Japan. These companies are controlled by a common controlling shareholder. Zhongchao Japan was acquired from the Company’s controlling shareholder in December 2021, such acquisition was accounted for as acquisition under common control and the Zhongchao Japan was consolidated from December 2021, and the comparative financial statement were prepared on a consolidated basis retrospectively from the date Zhongchao Japan was incorporated (i.e, October 30, 2020). In the consolidated financial statements, the assets and liabilities of Zhongchao Japan are presented at their carrying amount. The Company recognizes in equity any difference between the consideration paid and the net assets recognized. No goodwill or losses may be recognized on consolidation. The revenues, cost, operating expenses and other expenses are consolidated for the relevant periods to be presented in the financial statements as if the combination occurred on October 1, 2020. Zhongchao Japan’s historical financial statements have immaterial impact to the consolidated financial statements of the Company. All transactions and balances among the Company, its subsidiaries, VIE and Zhongchao Japan have been eliminated upon consolidation. Business combination and non-controlling interests The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 “Business Combinations.” The cost of an acquisition is measured as the aggregate of the acquisition date fair value of the assets transferred to the sellers, liabilities incurred by the Company and equity instruments issued by the Company. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the acquisition date amounts of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the acquisition date amounts of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of operations and comprehensive (loss) income. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Subsequent to the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any further adjustments are recorded in the consolidated statements of operations and comprehensive (loss) income. In a business combination achieved in stages, the Company re-measures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of operations and comprehensive (loss) income. For the Company’s non-wholly owned subsidiaries, a noncontrolling interest is recognized to reflect the portion of equity that is not attributable, directly or indirectly, to the Company. Non-controlling interests represent the equity interests in the subsidiaries of the VIE that are not attributable, either directly or indirectly, to the VIE. For the Company’s consolidated financial statements, non-controlling interests represent minority shareholders’ 6.67% in Zhongxin and a minority shareholder’s 40% in West Angel, respectively, as of December 31, 2022. Non-controlling interests are presented as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated statements of operations and comprehensive (loss) income to distinguish the interests from that of the Company, its wholly-owned subsidiaries, VIE and VIE’s subsidiaries. Foreign currency translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet. The resulting exchange differences are recorded in the consolidated statements of operations and comprehensive (loss) income. The reporting currency of the Company and its subsidiaries is U.S. dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In general, for consolidation purposes, assets and liabilities of the Company and its subsidiaries whose functional currency is not the US$, are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of the Company and its subsidiaries are recorded as a separate component of accumulated other comprehensive (loss) income within the statement of shareholders’ equity. Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods: December 31, December 31, Balance sheet items, except for equity accounts 6.8972 6.3726 For the Years Ended 2022 2021 2020 Items in the statements of operations and comprehensive (loss) income, and statements of cash flows 6.7290 6.4508 6.9020 No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, fair value of the Company’s ordinary shares, fair value of the Company’s subsidiaries, determinations of the useful lives and valuation of long-lived assets, valuation of goodwill, estimates of allowances for doubtful accounts, valuation of deferred tax assets, and other provisions and contingencies. Fair value of financial instruments The Company’s financial instruments are accounted for at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of the fair value hierarchy are described below: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value. As of December 31, 2022 and 2021, financial instruments of the Company comprised primarily current assets and current liabilities including cash and cash equivalents, accounts receivable, due from a related party, other receivables, loans receivable, accounts payable and other payables, which approximate their fair values because of the short-term nature of these instruments. Short-term investments are trading securities with observable market price in active market. They are classified as level 1 investment and are measured at fair value as of December 31, 2022 and 2021. Cash and cash equivalents Cash and cash equivalents primarily consist of bank deposits, as well as highly liquid investments, with original maturities of three months or less, which are unrestricted as to withdrawal and use. Short-term investments Short-term investments comprised of certain listed equity securities purchased through various open market transactions. Equity securities not measured by the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated statements of operations and comprehensive (loss) income, according to ASC 321 “Investments — Equity Securities”. During the years ended December 31, 2022 and 2021, the Company purchased certain listed equity securities and accounted for such investments as “short-term investments” and subsequently measure the investments at fair value in the account of “other income, net”. Accounts receivable Accounts receivable are recorded at the gross amount less an allowance for any uncollectible accounts and do not bear interest. The Company provides customers with credit term ranging between one to six months, depending on credit assessment of customers. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. During the years ended December 31, 2022, 2021 and 2020, the Company accrued provisions against doubtful accounts of $753,447, $1,449,827 and $336,367, respectively, among which $543,315, $1,449,827 and $336,367 were written off as the Company evaluated it is remote to collect the balance. As of December 31, 2022 and 2021, allowances for doubtful accounts against accounts receivable were $207,269 and $ nil Inventories Inventories of the Company consist of patented drugs. Inventories are stated at the lower of cost or net realizable value. Inventory costs include expenses that are directly or indirectly incurred in the purchase of patented drugs. Cost of inventories is determined using the weighted average cost method. Inventories are written down to estimated net realizable value, which could be impacted by certain factors including historical usage, expiration date, expected demand, anticipated sales price, new product development schedules, product obsolescence, customer concentrations and other factors. The Company continually evaluate the recoverability, and inventory provisions are recorded in the consolidated statements of operations and comprehensive (loss) income. For the years ended December 31, 2022, 2021 and 2020, the Company did not provide inventory provisions against patented drugs. Prepayments Prepayments represent amounts advanced to suppliers for providing services to the Company. The suppliers usually require advance payments when the Company orders service and the prepayments will be utilized to offset the Company’s future payments. These amounts are unsecured, non-interest bearing and generally short-term in nature. Investments in equity method investees In addition to the investment of investees over which the Company exercised significant influences, the Company also accounts for the investment in a limited partnership in which the Company holds more than minor equity interest (3% - 5%) in accordance with ASC 970-323-25-6 under the equity method of accounting. The Company applies the equity method to account for investment in a limited partnership and other investees, according to ASC 323 “Investments — Equity Method and Joint Ventures”, over which it has significant influence but does not own a controlling financial interest. Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of operations and comprehensive (loss) income. The Company records its share of the results of the equity investees on a one quarter in arrears basis. When the Company’s share of losses of the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee. The Company continually reviews its investments in equity investees to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates, including consideration of the impact of the COVID-19 pandemic; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value. No impairment of was recognized for the years ended December 31, 2022, 2021 and 2020. Investments in an equity security Equity securities not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated statements of operations and comprehensive (loss) income, according to ASC 321 “Investments — Equity Securities”, which the Company adopted beginning January 1, 2021. As of December 31, 2022, the Company had investment in one equity security. The Company elected to record an equity investment in privately held companies using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. NAV is primarily determined based on information provided by financial institution. The equity investment in privately held companies accounted for using the measurement alternative are subject to periodic impairment reviews. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security, including consideration of the impact of the COVID-19 pandemic. Property and equipment Property and equipment primarily consist of buildings, office equipment, and vehicle. Properties and equipment are stated at cost less accumulated depreciation less any provision required for impairment in value. Depreciation is computed using the straight-line method with residual value rate of 5% based on the estimated useful lives as follows: Land and buildings 7 - 21 years Office equipment 3 years Vehicle 4 years Leasehold improvements 5 years Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is recorded in other income, net in the consolidated statements of operations and comprehensive (loss) income. Prepayments for lease of land Prepayments for lease of land represent prepayments to the lessee for sub-lease of two land use rights. Prepayments for lease of land are carried at cost less accumulated amortization and any impairment loss. Amortization is provided against the cost of lease prepayments on a straight-line basis over the period of the rights, which are 16 years and 32 years, respectively. Intangible assets, net The Company acquired intangible assets through either purchase or acquisition in the business combination. Intangible assets acquired through business combinations are recognized as assets separate from goodwill if they satisfy either the “contractual-legal” or “separability” criterion. Intangible assets arising from business combinations are measured at fair value upon acquisition using valuation techniques such as discounted cash flow analysis. Major assumptions used in determining the fair value of these intangible assets include future growth rates and weighted average cost of capital. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method as follows: Purchased intangible assets are recognized and measured at fair value upon acquisition. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method based on their estimated useful lives as follows: Trademarks 10 years License 10 years Software 3 - 10 years Impairment of long-lived assets other than goodwill The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment of long-lived assets was recognized for the years ended December 31, 2022, 2021 and 2020. Goodwill Goodwill represents the excess of the purchase consideration over the acquisition date amounts of the identifiable tangible and intangible assets acquired and liabilities assumed from the acquired entity as a result of the Company’s acquisitions of interests in its subsidiaries. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In the qualitative assessment, the Company considers factors such as macroeconomic conditions, industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations, business plans and strategies of the reporting unit, including consideration of the impact of the COVID-19 pandemic. Based on the qualitative assessment, if it is more likely than not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is performed. No impairment of goodwill was recognized for the years ended December 31, 2022. Revenue recognition ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue 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 accordance with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company identified each distinct service, or each series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, as a performance obligation. Transaction price is allocated among different performance obligations identified in one contract. Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable consisted of amounts invoiced and amounts for which revenue recognized prior to invoicing when the Company has satisfied its performance obligation and has the unconditional right to payment. Advances from customers consists of payments received related to unsatisfied performance obligations at the end of the period. The Company applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Company has no material incremental costs for obtaining contracts with customers that the Company expects the benefit of those costs to be longer than one year. Medical training and education services The Company designs and provides medical training and education courses in both online and offline formats to physicians and allied healthcare professionals (the “training and education services”). The Company identifies a single performance obligation from contracts. The Company recognizes revenue at the point when the service was rendered. Payments received in advance from customers are recorded as “advance from customers” in the consolidated balance sheets. Advance from customers is recognized as revenue when the Company delivers the courses to its customers. Such advance payment received are non-refundable. In cases where fees are collected after the sales, revenue and accounts receivable are recognized upon delivery of medical training and education courses to the customers. The fees are fixed and determinable at the inception of the services. Offline medical training and education services courses – though customers can benefit from each service commitment, including design, production and presentation of medical courses, together with other readily available resources. The promises in the contracts with customers is integration of all of these service commitments. The Company concludes that these service commitments are highly dependent with each other, in the context of the contract term. Thus, these service commitments are not distinct from each other, and the Company combines all service commitments performed as a single performance obligation. In cases where the Company engages third party experts to provide presentation in medical courses, as the Company determines the contents and the participants, it has the ability to direct these experts to provide medical training services for the Company. Therefore, the Company is primarily responsible for fulfilling the promise to provide the medial courses and has the discretion in establishing the transaction price. The Company is a principal in the provision of services and recognizes revenues on a gross basis. Online medical training and education services courses – the promises in the contracts with customers consist of provision of online courses and presentation of the courses online for users to access for a period of time. The performance obligation of presentation of the courses online for users for a period of time is immaterial in the context of the contract because presentation of each course incurred no significant additional cost, nor will it occupy any significant resources of the Company, except for little digital space on the Company’s server, which is inconsequential. Therefore, the Company combines all service commitments performed as a single performance obligation. Patient management services in patient-aid projects The Company is engaged by NFPs and pharmaceutical enterprises to assist in the operation of patient-aid projects with a purpose to facilitate qualified patients to obtain free drug treatment from NFPs. The Company is responsible to provide doctors with access to training courses or training materials in connection with the drug treatment, review the completeness of application documents from patients, and other ad-hoc works (such programs with these plug-in features are hereinafter referred as the “patient-aid projects”). The arrangements are structured as fixed price contracts. The price is determined as stated in contracts and does not include any variable consideration. The Company identifies a single performance obligation from contracts and recognizes revenue over a period of time during which the Company provides the assistance to the NFPs till the earlier of the expiration of contract period or the free drugs are completely delivered. The Company uses an input-based method to measure the progress, by reference to the cost incurred in performing the obligation. The fees are fixed at the inception of the services and are collected either in advance or after the services are provided. Sales of patented drugs Starting from the year of 2022, the Company commenced sales of patented drugs to customers. The Company identified one performance obligation in the contracts with customers, and the transaction price is fixed. No sales incentives or return of goods is allowed only if there are quality issues. The Company recognized revenues upon sales of patented drugs upon acceptance of goods by customers. Other revenues The Company also provides consulting services to its customers, including drafting research papers and providing other academic supports, and facilitation services for hospitals and patients through online platform. The consulting services are accounted for as a single performance obligation and was recognized as revenue when the Company delivers services to the customers. Fees are generally collected after provision of services. The facilitation services are accounted for as a single performance obligation and was recognized as revenue when the Company completed facilitation services to the customers. For the years ended December 31, 2022, 2021, and 2020, other revenues accounted for 0.3%, 1.2% and 0% of consolidated revenues, respectively. The following table identifies the disaggregation of our revenue for the years ended December 31, 2022, 2021 and 2020, respectively. For the Years Ended 2022 2021 2020 Medical training and education services $ 6,604,487 $ 8,754,120 $ 10,543,852 Patient management services in patient-aid projects 6,288,602 7,343,343 7,445,936 Sales of patented drugs 1,216,096 - - Other revenues 42,331 199,307 - Total $ 14,151,516 $ 16,296,770 $ 17,989,788 Cost of revenues Cost of revenues was comprised of direct related costs incurred for preparation of online medical training courses and offline education seminars and patient-aid projects and cost of patented drugs. The cost of preparation of online medical training courses and offline education seminars and patient management services in patient-aid projects includes expenses of travelling and accommodation, seminar site-rental, video production and backdrop production, professional service fees charged by experts who provide online and offline seminars, salary and welfare expenses incurred by the key members of the editorial, design and production team, and labor cost for patient-aid projects. The travelling and accommodation expenses, including but not limited to the air-ticket expenses and hotel accommodation expenses, represented the costs arising from lecturers’ attendance and participation of the offline seminars. Other media expenses were incurred by the Company’s medical department for videos production, live streaming of the offline seminars, and materials collection to create online courses. These travelling, accommodation and media expenses are well budgeted before any agreements entered into by the Company and the customers. Therefore, such expenses are well covered by the customers under those agreements. The Company is not reimbursed by the customers separately. Employee benefits The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $817,345, $804,730, and $310,637 for the years ended December 31, 2022, 2021 and 2020, respectively. Research and development costs Research and development costs are mainly comprised of salary and welfare expenses for the Company’s IT department employees who work for the development of the Company’s platform and database, and software and related intellectual property expenses which were used to develop an extensive library of licensed content and medical database. For the years ended December 31, 2022, 2021, and 2020, the Company incurred research and development expenses of $411,524, $758,878, and $816,553, respectively. Advertising expenses Advertising expenses primarily include advertisement for the Company’s platform for online medical courses. Advertising costs are expensed as incurred and the total amounts charged to “selling and marketing expenses” in the consolidated statements of operations and comprehensive (loss) income were $989,900, $2,204,233, and $2,851,648 for the years ended December 31, 2022, 2021 and 2020, respectively. Share-based compensation Share-based awards granted to the Company’s employees and one non-employee are measured at fair value on grant date and measurement date, respectively, and share-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the accelerated attribution method, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares. At each date of measurement, the Company reviews internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by the Company, including but not limited to the fair value of the Company ordinary shares, expected life, expected volatility and expected forfeiture rates. The Company is required to consider many factors and make certain assumptions during this assessment. If any of the assumptions used to determine the fair value of the share-based awards changes significantly, share-based compensation expense may differ materially in the future from that recorded in the current reporting period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company for accounting purposes. Value added tax The Company is subject to value added tax (“VAT”) and related surcharges on the revenues earned for both sales of products and rendering of services in the PRC. The applicable rate of value added tax is 6% on services and 13% on sales of products. The related surcharges for revenues derived from provision medical co |
Variable Interest Entities and
Variable Interest Entities and Other Consolidation Matters | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entities and Other Consolidation Matters [Member] | |
VARIABLE INTEREST ENTITIES AND OTHER CONSOLIDATION MATTERS | 3. VARIABLE INTEREST ENTITIES AND OTHER CONSOLIDATION MATTERS On August 14, 2019, Zhongchao WFOE entered into VIE Agreements with Zhongchao Shanghai and its shareholders. The key terms of these VIE Agreements are summarized in “Note 1 - Organization and Principal Activities” above. VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Zhongchao WFOE is deemed to have a controlling financial interest and be the primary beneficiary of Zhongchao Shanghai, because it has both of the following characteristics: 1. power to direct activities of Zhongchao Shanghai that most significantly impact its economic performance, and 2. obligation to absorb losses of the entity that could potentially be significant to Zhongchao Shanghai or right to receive benefits from the entity that could potentially be significant to Zhongchao Shanghai. In addition, as all of these VIE agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company’s ability to enforce these VIE agreements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these VIE Agreements, it may not be able to consolidate the financial statements of Zhongchao Shanghai and its ability to conduct its business may be materially and adversely affected. The Company had no operations but to consolidate the financial statements of Zhongchao Shanghai and its subsidiaries. Current regulations in China permit Zhongchao Shanghai to pay dividends to the Company only out of its accumulated distributable profits, if any, determined in accordance with their articles of association and PRC accounting standards and regulations. The ability of Zhongchao Shanghai to make dividends and other payments to the Company may be restricted by factors including changes in applicable foreign exchange and other laws and regulations. Risks of variable interest entity structure In the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the VIE Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of WFOE and the VIE are in compliance with existing PRC laws and regulations in all material respects, except as disclosed in this Annual Report. However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its management. If the current corporate structure of the Company or the VIE Arrangements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s current corporate structure or the VIE Arrangements is remote based on current facts and circumstances. The following significant amounts of Zhongchao Shanghai and its subsidiaries are included in the accompanying consolidated financial statements as of December 31, 2022 and 2021, and for the years ended December 31, 2022, 2021 and 2020: December 31, December 31, ASSETS Cash and cash equivalents $ 4,500,379 $ 7,117,728 Accounts receivable 6,772,988 9,218,883 Inventories 189,106 - Other current assets 1,840,182 2,029,794 Investment in a limited partnership and an equity investee 1,179,300 1,993,285 Property and equipment, net 3,111,717 3,168,441 Goodwill 5,767,504 - Right of use assets 1,666,777 205,824 Deferred tax assets 1,800,493 2,025,043 Other noncurrent assets 1,456,322 414,105 Total Assets $ 28,284,768 $ 26,173,103 LIABILITIES Advances from customers $ 395,263 $ 7,432 Income tax payable 2,292,765 2,478,273 Operating lease liabilities, current and non-current 1,702,478 201,559 Due to Zhongchao Inc.* 762,962 599,347 Other current liabilities 992,558 1,011,371 Deferred tax liabilities 208,200 - Total Liabilities $ 6,354,226 $ 4,297,982 For the years ended December 31, 2022 2021 2020 Revenues $ 14,151,516 $ 16,096,769 $ 17,989,788 (Loss) Income from Operations $ (1,716,154 ) $ 418,235 $ 4,525,855 Net (Loss) Income $ (1,427,296 ) $ 838,838 $ 4,484,029 * The balances due from/to Zhongchao Inc., are eliminated on consolidation. As of December 31, 2022 and 2021, the VIE and its subsidiaries did not collateralize their assets for the obligation. Moreover the beneficial interest holders of the VIE and its subsidiaries had no recourse to the general credit of the Company or its subsidiaries. |
Acquisition of Beijing Yisuizhe
Acquisition of Beijing Yisuizhen and its Subsidiary | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
ACQUISITION OF BEIJING YISUIZHEN AND ITS SUBSIDIARY | 4. ACQUISITION OF BEIJING YISUIZHEN AND ITS SUBSIDIARY In November 2021, Beijing Yisuizhen was set up, over which the Company owned 47% effective equity interest with capital contribution of $708,129 (RMB 4,568,000),and accounted for the investment under equity method. In February 2022, Beijing Yisuizhen acquired 60% equity interest in West Angel and exercised control over West Angel, at cash consideration of RMB 25 million and a 6.67% share consideration in Shanghai Zhongxin at discounted price. Both Beijing Yisuizhen and West Angel are primarily engaged in technology development, consulting, communication, transfer, and promotion, software services, and health consulting services. In August 2022, the Company acquired additional equity interest in Beijing Yisuizhen and its subsidiary for a cash consideration of $3.1 million (RMB20.6 million) and a 6.67% share consideration in Shanghai Zhongxin at discounted price. Upon the completion of the transaction, the Company owns 100% equity interest in Beijing Yisuizhen and Beijing Yisuizhen became a consolidated subsidiary of the Company. The allocation of the purchase price as of the date of acquisition is summarized as follows: Net assets deficit assumed (i) $ (60,092 ) Software acquired in business combination (ii) 1,000,406 Goodwill 5,767,504 Deferred tax liabilities (234,225 ) Non-controlling interest (iii) (2,585,087 ) Foreign currency adjustments 120,261 $ 4,008,767 Total purchase price is comprised of Cash consideration $ 3,055,432 Fair value of previously held equity interests (iv) 708,129 Fair value of 6.67% equity interest in Zhongxin (v) 393,816 Less: cash from transfer of fair value of 6.67% equity interest in Zhongxin (v) (148,610 ) $ 4,008,767 (i) Net asset deficit assumed primarily included other current liabilities for operating expenses. (ii) Software acquired in the business combination had estimated useful life of 3 years. (iii) Fair value of the noncontrolling interests was estimated with reference to the market price per share as of the acquisition date. (iv) A gain of $850 in relation to the revaluation of the previously held equity interests was recorded in other income, net in the consolidated statements of operations and comprehensive (loss) income for the year ended December 31, 2022. The fair value of the previously held equity interests approximated the cost of investments as Beijing Yisuizhen has not commenced operations since its setup. (v) In exchange for the equity interest in Beijing Yisuizhen and West Angel, the Company also granted 6.67% equity interest in Shanghai Zhongxin, with fair value of $393,816 (RMB 2,713,000), to four shareholders of West Angel at cash consideration of $148,610 (RMB 1,000,000). The Company engaged a third party valuation team to estimate the fair value of equity interest of Shanghai Zhongxin. As of December 31, 2022, the four shareholders paid the cash consideration to Mr. Yang, the Chief Executive Officer of the Company. The Company recorded the outstanding balance in the account of due from related parties (Note 16). |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2022 | |
Short-term Investments [Abstract] | |
SHORT-TERM INVESTMENTS | 5. SHORT-TERM INVESTMENTS As of December 31, 2022 and 2021, the balance of short-term investments represented certain listed equity securities purchased through various open market transactions. The short-term investments are trading securities. They are initially recorded at cost, and subsequently measured at fair value with the changes in fair value recorded in other income, net in the consolidated statements of operations and comprehensive (loss) income. Loss from such short-term investment amounted to $240,489, $58,403 and $10,331 for the years ended December 31, 2022, 2021 and 2020, respectively. |
Other Current Assets
Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Other Current Assets [Abstract] | |
OTHER CURRENT ASSETS | 6. OTHER CURRENT ASSETS Other current assets consist of the following: December 31, December 31, Due from a third party (i) $ 205,726 $ - Office rental deposit 128,194 203,896 Interest receivable 88,720 78,950 Prepaid rental fees 803 45,607 Others 69,597 47,256 $ 493,040 $ 375,709 (i) During the year ended December 31, 2022, the Company sold one of its properties to a third party at cash consideration of $1,323,308 (Note 8), among which the third party paid $1,112,440. The Company recorded the remaining balance as “due from a third party” in the account of other current assets. |
Loans Receivable
Loans Receivable | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
LOANS RECEIVABLE | 7. LOANS RECEIVABLE Loans receivable consist of the following: December 31, December 31, Borrower A $ - $ 266,767 Borrower B - 199,893 Borrower C - 404,008 Borrower D 1,590,000 1,590,000 Borrower E 250,000 200,000 $ 1,840,000 $ 2,660,668 Borrower A, B and C During the year ended December 31, 2021, the Company made loans of RMB6,700,000 (approximately $1,038,631), RMB1,273,840 (approximately $197,470), RMB2,574,580 (approximately $399,110) to Borrowers A, B, and C, respectively. During the year ended December 31, 2021, the Company collected RMB 5,000,000 (approximately $775,098) from Borrower A. These loans were interest free. During the year ended December 31, 2022, the Company fully collected the loans receivables from Borrower A, B and C. Borrower D and E During the year ended December 31, 2021, the Company made loans of $1,890,000 and $200,000 to Borrower D and E, respectively. During the year ended December 31, 2021, the Company collected $300,000 from Borrower D. During the year ended December 31, 2022, the Company made loans of $200,000 to Borrower E. During the year ended December 31, 2022, the Company also collected $150,000 from Borrower E. These loans were interest free. In April 2022, Mr. Yang, the Chief Executive Officer of the Company, provided a guarantee on the borrowings to Borrower A, D and E, respectively, providing that Mr. Yang will repay the loans on behalf of the Borrower A, D and E if any of them failed to repay the loan. In December 2022, the Company extended borrowings for another six months and Mr. Yang provided an extended guarantee on the borrowings. As of the date of this report, the Company collected $1,590,000 from Borrower D, and settled the balance of $250,000 due from Borrower E with payables due to the borrower. As of the date of this report, the balance of loan receivable was zero. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 8. PROPERTY AND EQUIPMENT, NET Property and equipment, net consist of the following: December 31, December 31, Land and buildings $ 4,105,956 $ 4,063,587 Office equipment 79,082 460,525 Vehicle 32,535 35,213 Leasehold improvements 53,253 - Less: accumulated depreciation (379,879 ) (636,239 ) $ 3,890,947 $ 3,923,086 Depreciation expenses totaled $241,842, $312,898, and $176,111 for the years ended December 31, 2022, 2021 and 2020, respectively. In May 2021, the Company, through Ms. Lirong Yang, sister of the Company’s CEO, purchased a property for a total purchase price of approximately $1,397,317 in a public judicial auction in May 2021 to be used as office for Shanghai Maidemu, one of subsidiaries of the VIE of the Company. Pursuant to a real estate entrust agreement between Shanghai Maidemu and Ms. Yang, Shanghai Maidemu is considered ultimate ownership/beneficiary of this property. As of December 31, 2021, the Company obtained the property ownership certificate, but the property was illegally encroached by an outsider. Till March 2022, Jinan Intermediate People’s court has sent a letter to Beijing Higher People’s court, hoping that the eviction order of this case would be implemented by the Tongzhou District People’s court, where the property is located. During the year ended December 31, 2022, the Company sold the property to a third party for $1,323,308. The difference between the cash consideration and the net book value was recorded as “gain from disposal of property and equipment” in the account of “other income, net” in the consolidated statements of operations and comprehensive (loss) income. |
Prepayments for Lease of Land
Prepayments for Lease of Land | 12 Months Ended |
Dec. 31, 2022 | |
Prepayments for Lease of Land [Abstract] | |
PREPAYMENTS FOR LEASE OF LAND | 9. PREPAYMENTS FOR LEASE OF LAND Prepayments for lease of land consist of the followings: December 31, December 31, Prepayments for lease of land $ 401,031 $ 434,045 Less: accumulated amortization (96,244 ) (80,698 ) $ 304,787 $ 353,347 Amortization expenses totaled $22,226, $23,185, and $21,670 for the years ended December 31, 2022, 2021, and 2020, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | 10. INTANGIBLE ASSETS, NET Intangible assets, net consist of the following: December 31, December 31, Software $ 1,041,872 $ 44,880 Trademark and license 11,133 12,050 Less: accumulated amortization (140,951 ) (26,671 ) $ 912,054 $ 30,259 For the years ended December 31, 2022, 2021 and 2020, amortization expense totaled $119,218, $5,525, and $4,544, respectively. The following is a schedule, by years, of amortization of intangible assets as of December 31, 2022: December 31, For the year ended December 31, 2023 $ 338,636 For the year ended December 31, 2024 338,636 For the year ended December 31, 2025 227,492 For the year ended December 31, 2026 5,105 For the year ended December 31, 2027 2,185 $ 912,054 |
Investments in Equity Method In
Investments in Equity Method Investees | 12 Months Ended |
Dec. 31, 2022 | |
Investment Company, Financial Highlights [Abstract] | |
INVESTMENTS IN EQUITY METHOD INVESTEES | 11. INVESTMENTS IN EQUITY METHOD INVESTEES As of December 31, 2022 and 2021, the Company’s investments in equity investments were comprised of investment in one limited partnership and one equity investees were as the following: December 31, December 31, Ningbo Meishan Xinaishan Equity Investment Limited Partnership (“limited partnership”) (a) $ 1,179,300 $ 1,276,466 Beijing Yisuizhen (b) - 716,819 $ 1,179,300 $ 1,993,285 (a) On November 5, 2020, the Company entered into a five-year partnership agreement to invest $1,217,039, for 28% partnership interest in the limited partnership. The funds raised by the limited partnership are invested in one PRC private company engaged in immunotherapy. For the years ended December 31, 2022, 2021 and 2020, equity investment loss of $80, $13,758 and $25,622 have been recorded in other income, net for the Company’s share of the operating loss of the limited partnership. As of December 31, 2022 and 2021, no significant impairment indicators have been noted in connection with the investment. (b) On November 8, 2021, the Company newly set up Beijing Yisuizhen with other investors and acquired 47% equity interest at cash consideration of $708,129. In August 2022, the Company, through Hainan Muxin, acquired additional 53% equity interest in Beijing Yisuizhen, which was consolidated in the Company’s consolidated financial statements. Beijing Yisuizhen has not commenced operations. In addition, the Company did not note significant impairment indicators in connection with the investment. |
Investment in an Equity Securit
Investment in an Equity Security | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT IN AN EQUITY SECURITY | 12. INVESTMENT IN AN EQUITY SECURITY During the year ended December 31, 2021, the Company made an investment of $150,000 in Elite Ivy Investment LLC (“Elite Ivy”), accounting for 0.6% of the investee. Elite Ivy was mainly engaged in investments in equities, options, futures, debt securities and commodities, and interim investments in money market or equivalent instruments. The Company can withdraw the investment after six months of the investment. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the Elite Ivy. For the year ended December 31, 2022 and 2021, the Company recorded downward adjustments of $65,394 and $ nil The Company considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security. For the year ended December 31, 2022 and 2021, the Company did not record impairment against the investment. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Other Current Assets [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 13. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: December 31, December 31, Other tax payable $ 379,712 $ 616,356 Accrued payroll 296,866 301,260 Customer deposits payable 83,367 - Other current liabilities 95,595 57,185 $ 855,540 $ 974,801 Other tax payable Other tax payables consist of the following: December 31, December 31, Value added tax payable $ 354,794 $ 579,516 Local taxes payable 24,918 36,840 $ 379,712 $ 616,356 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 14. INCOME TAXES Cayman Islands Under the current tax laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands Under the current tax laws of BVI, the Company’s subsidiary incorporated in the BVI is not subject to tax on income or capital gains. Hong Kong Zhongchao HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. Before that, the applicable tax rate was 16.5% for corporations in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax laws, Zhongchao HK is exempted from income tax on its foreign-derived income and there are no withholding taxed in Hong Kong on remittance of dividends. USA Zhongchao USA is incorporated in the United States and is subject to a federal tax rate of 21%. Japan Under the current tax laws of Japan, Zhongchao Japan is incorporated in Japan and is subject to an income tax rate of 30%. For the year ended December 31, 2022, 2021 and 2020, Zhongchao Japan did not have taxable income. PRC For the year ended December 31, 2022, Zhongchao Shanghai and Beijing Branch of Shanghai Zhongxun is subject to PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws. The EIT rate for companies operating in the PRC is 25%. The Company’s other subsidiary and the VIE’s subsidiaries that are located in the PRC were qualified as Small and Micro-sized Enterprises (“SMEs”). For the year ended December 31, 2021 and 2020, Zhongchao Shanghai, Shanghai Maidemu, Shanghai Zhongxun, Shanghai Zhongxin, Huijing are subject to EIT rate of 25%. Hainan Zhongteng, located in Hainan Province, is subject to 15%. Beijing Boya, Shanghai Xinyuan and Hainan Muxin qualify as SMEs. Liaoning Zhixun was not qualified as a SMEs until fiscal year 2021. Qualified as a Software Development Enterprise and a High and New Technology Enterprise, Zhongchao Shanghai applied a preferential income tax rate of 12.5% for the year ended December 31, 2020. From January 1, 2021, Zhongchao Shanghai was subject to an EIT of 25%. SMEs are entitled to a reduced EIT rate of a reduced EIT rate of 20%, 87.5% reduction of taxable income for the first RMB1,000,000 taxable income and 75% reduction of taxable income between RMB 1,000,000 and RMB 3,000,000, and no reduction for the remaining taxable income for the year ended December 31, 2022; 87.5% reduction of taxable income for the first RMB1,000,000 taxable income and 50% reduction of taxable income between RMB 1,000,000 and RMB 3,000,000, and no reduction for the remaining taxable income for the year ended December 31, 2021; and 75% reduction of taxable income for the first RMB1,000,000 taxable income and 50% reduction of taxable income between RMB 1,000,000 and RMB 3,000,000, and no reduction for the remaining taxable income for the years ended before December 31, 2020. In September 2018, the State Taxation Administration of the PRC announced a preferential tax treatment for research and development expenses. Qualified entities are entitled to deduct 175% research and development expenses against income to reach a net operating income. The components of (loss) profit before income tax benefits (expenses) are summarized as follows: For the Years Ended 2022 2021 2020 PRC $ (1,243,361 ) $ 631,917 $ 4,976,484 Non-PRC (1,306,645 ) (742,670 ) (34,600 ) Total $ (2,550,006 ) $ (110,753 ) $ 4,941,884 Income tax benefits (expenses) consist of the following: For the Years Ended 2022 2021 2020 Current income tax expenses $ (138,188 ) $ (997,198 ) $ (543,211 ) Deferred income tax benefits (134,125 ) 1,346,616 58,424 Income tax benefits (expenses) $ (272,313 ) $ 349,418 $ (484,787 ) Below is a reconciliation of the statutory tax rate to the effective tax rate: For the Years Ended 2022 2021 2020 PRC statutory income tax rate 25 % 25 % 25 % Effect of different income tax rates in other jurisdictions (2.11 )% (34.11 )% 0 % Effect of preferential tax benefits 12.72 % 167.36 % (13.96 )% Effect of non-deductible expenses (1.22 )% (54.84 )% 0.35 % Effect of research and development credits 3.06 % 104.55 % (1.47 )% Effect of deferred tax rate change (34.22 )% 107.53 % 0 % Effect of changes in valuation allowance (13.91 )% 0 % 0 % Effective tax rate (10.68 )% 315.49 % 9.81 % Deferred tax assets as of December 31, 2022 and 2021 consist of the following: December 31, December 31, Deferred tax assets: Excess advertising expense $ 842,295 $ 911,799 Deferred Intangible assets amortization 25,790 33,590 Net operating loss carrying forward 1,052,209 1,079,962 Share-based compensation 178,764 156,928 Doubtful allowance against accounts receivable 51,817 - Changes in fair value of short-term investments 50,502 - Downward adjustments in investments in an equity security 13,733 - Lease liabilities 71,024 31,615 Less: Deferred tax liability - Right of use assets (81,910 ) (37,184 ) Less: Valuation allowance on deferred tax assets (339,495 ) - Deferred tax assets, net $ 1,864,729 $ 2,176,710 Deferred tax liability Software acquired in business combination 208,200 - $ 208,200 $ - As of December 31, 2022 and 2021, the Company had net operating loss carryforwards of $7,166,560 and $4,435,381, respectively. The net operating loss carryforwards $1,512,756 from Unite States and Hong Kong at December 31, 2022 could be carried forward indefinitely and shall not expire. The Company also has net operating loss carryforwards from PRC of $5,653,804 which expire starting in 2025 through 2027. The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. As of December 31, 2022 and 2021, the Company recorded valuation allowance of $339,495 and $ nil The Company evaluates its valuation allowance requirements at end of each reporting period by reviewing all available evidence, both positive and negative, and considering whether, based on the weight of that evidence, a valuation allowance is needed. When circumstances cause a change in management’s judgement about the recoverability of deferred tax assets, the impact of the change on the valuation allowance is generally reflected in income from operations. The future realization of the tax benefit of an existing deductible temporary difference ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryforward period available under applicable tax law. As a result of the Tax Act, the Company has evaluated whether it has an additional tax liability from the Global Intangible Low Taxed Income (“GILTI”) inclusion on current earnings and profits of its foreign controlled corporations. The law also provides that corporate taxpayers may benefit from a 50% reduction in the GILTI inclusion, which effectively reduces the tax rate on the foreign income to 10.5%. The GILTI inclusion further provides for a foreign tax credit in connection with the foreign taxes paid. As of December 31, 2022 and 2021 the Company does not have any aggregated positive tested income; and as such, did not record a liability for GILTI tax. With the effective date of January 1, 2018, the Tax Act introduced a provision to tax global intangible low-taxed income (“GILTI”). The Company will account for future tax liability arising from Global Intangible Low-Taxed Income, if any, as a period cost. |
(Loss) Earnings Per Share
(Loss) Earnings Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
(LOSS) EARNINGS PER SHARE | 15. (LOSS) EARNINGS PER SHARE The following table sets forth the computation of basic and diluted (loss) earnings per ordinary share for the years ended December 31, 2022, 2021 and 2020, respectively: For the Years Ended 2022 2021 2020 Net (Loss) Income Attributable to Zhongchao Inc.’s shareholders $ (2,940,891 ) $ 238,665 $ 4,458,380 Weighted average number of ordinary share outstanding Basic and Diluted 25,997,757 24,938,513 24,425,637 (Loss) Earnings per share Basic and Diluted $ (0.113 ) $ 0.010 $ 0.183 On August 14, 2019, Zhongchao Cayman completed a reorganization of entities under common control of its then existing shareholders, who collectively owned a majority of the equity interests of Zhongchao Cayman prior to the reorganization. All references to numbers of common shares and per-share data in the consolidated financial statements have been adjusted to reflect such issuance of shares on a retrospective basis. In addition, the contingently issuable ordinary shares of 1,350,068 shares of Class A ordinary share underlying the warrant (Note 1) issued to one existing shareholder of Zhongchao Shanghai is included in calculation of basic and diluted weighted average number of ordinary share outstanding, as the Company does not expect any circumstances under which those shares would not be issued. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted (loss) earnings per share. For the years ended December 31, 2022, 2021 and 2020, the Company had no dilutive shares. |
Related Party Transactions and
Related Party Transactions and Balances | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | 16. RELATED PARTY TRANSACTIONS AND BALANCES 1) Nature of relationships with related parties Name Relationship with the Company Yang Weiguang Chairman of the Board, Chief Executive Officer Beijing Ougaini Trading Co., Ltd (“Beijing Ougaini”) Controlled by an immediate family member of Mr. Yang Weiguang Beijing Yisuizhen The Company owned 47% and 100% equity interest before and after August 17, 2022, respectively 2) Transactions with related parties Purchase from a related party For the Years Ended 2022 2021 2020 Beijing Ougaini $ 19,696 $ - $ - During the year ended December 31, 2022, the Company also prepaid $118,888 to Beijing Ougaini for purchase of products for employee welfare and marketing promotion. 3) Balances with related parties As of December 31, 2022 and 2021, the balances with related parties were as follows: December 31, December 31, Prepayments Beijing Ougaini $ 115,989 $ - Due from related parties Yang Weiguang (i) 226,178 - Beijing Yisuizhen (ii) - 392,305 $ 226,178 $ 392,305 (i) As of December 31, 2022, the Company had a balance of $226,178 due from Mr. Yang Weiguang. The balance was comprised of the following: - A balance of $144,986 arising from transfer of 6.67% equity interest of Shanghai Zhongxin to four former shareholders of West Angel, who paid consideration to Mr. Yang. (Note 4) - A balance of $81,192 as tuition paid on behalf of to Mr. Yang. As of the date of this report, Mr. Yang has repaid the above outstanding balances to the Company. (ii) As of December 31, 2021, the Company had a balance of $392,305 due from Beijing Yisuizhen, over which the Company owned 47% equity interest before August 17, 2022. The balance was a loan to the newly set up equity investee to support its working capital. The outstanding balance was repaid by Beijing Yisuizhen before business combination with the Company. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | 17. EQUITY Ordinary share The Company’s authorized share capital is 500,000,000 ordinary shares consisting of 450,000,000 Class A Ordinary Shares and 50,000,000 Class B ordinary shares, par value $0.0001 per share (each, a “Class B Ordinary Share”; collectively, “Class B Ordinary Shares”). On April 16, 2019, the Company issued 10,000 Class B Ordinary Shares. On August 14, 2019, the Company issued 14,752,352 Class A Ordinary Shares and 5,497,715 Class B Ordinary Shares. Holders of Class A Ordinary Shares and Class B Class A Ordinary Shares have the same rights except for voting and conversion rights. In respect of matters requiring a shareholder vote, each Class A Ordinary Share will be entitled to 1 vote and each Class B Ordinary Share will be entitled to 15 votes. The Class A Ordinary Shares are not convertible into shares of any other class. The Class B Ordinary Shares are convertible into Class A Ordinary Shares at any time after issuance at the option of the holder on a one to one basis. In addition, the Company was committed to issue 1,350,068 Class A Ordinary Shares to a 6.25 % shareholder of Zhongchao Shanghai, who is now in the progress of changing from a shareholder of Zhongchao Shanghai to a direct investor of Zhongchao Cayman (Note 1). The 1,350,068 Class A Ordinary Shares, representing 5.19% economic beneficial interest, or 1.31% of the voting ownership interest of the Company as of December 31, 2022, will be issued to the shareholder upon its capital contribution in Zhongchao Cayman and the Company released its paid-in capital in Zhongchao Shanghai. Such ordinary shares are included in the shares issued and outstanding as of December 31, 2022 and 2021 and in the calculation of earnings per share as such commitment to issue the shares is considered to be part the reorganization, and the shares are considered to be in existence from the time this shareholder made the investment. On February 26, 2020, the Company closed its initial public offering (IPO) on the Nasdaq Global Market. The Company offered 3,000,000 Class A Ordinary Shares in the IPO, par value $0.0001 per share, at $4.00 per share. In addition, the underwriters of the Company’s IPO have exercised in full their over-allotment option to purchase additional 315,000 Class A Ordinary Shares, at $4.00 per share. Gross proceeds of the Company’s IPO, including the proceeds from the sale of the over-allotment shares, totaled $13.26 million, before deducting underwriting discounts and other related expenses. On December 17, 2021, the Company, entered into a Sales Agreement with U.S. Tiger Securities, acting as Sales Agent, pursuant to which the Company may offer and sell, from time to time, through the Sales Agent, its Class A Ordinary Shares. Class A Ordinary Shares will be offered and sold pursuant to the prospectus supplement, dated December 17, 2021, to the Registration Statement on Form F-3 (File No. 333-256190) that forms a part of such Form F-3, for an aggregate offering price of up to $10,400,000. On January 6, 2022, the Sales Agent sold an aggregate of 1,060,000 Class A Ordinary Shares at an offering price of $1.8 per share for gross proceeds of $1,908,000. On October 10, 2022, September 13, 2021, and July 13, 2020, the Company granted an aggregation of 18,000 Class A Ordinary Shares to three non-executive directors as compensations for one year from March 1, 2022, 2021 and 2020, respectively. Restricted net assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiary or VIE. Relevant PRC statutory laws and regulations permit payments of dividends by Zhongchao WFOE and its subsidiaries only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations and after it has met the PRC requirements for appropriation to statutory reserves. Paid in capital of the PRC subsidiary and VIE and VIE’s subsidiaries included in the Company’s consolidated net assets are also non-distributable for dividend purposes. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Zhongchao WFOE, Zhongchao Shanghai and its subsidiaries. The Company is required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, the Company may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. During the year ended December 31, 2022, 2021 and 2020 the Company accrued statutory reserve funds of $115,963, $397,552, and $385,689, respectively, which is 10% of the retained earnings of profit-making PRC subsidiaries, VIE or VIE’s subsidiaries as of December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022 and 2021, the Company had statutory reserve of $1,315,017 and $1,199,054, respectively. As of December 31, 2022 and 2021, the Company had net assets restricted in the aggregate, which include paid-in capital and statutory reserve of the Company’s PRC subsidiary and VIE and VIE’s subsidiaries that are included in the Company’s consolidated net assets, were approximately $13,314,132 and $13,198,169, respectively. The current PRC Enterprise Income Tax (“EIT”) Law also imposed a 10% withholding income tax for dividends distributed by a foreign invested enterprise to its immediate holding company outside China. A lower withholding tax rate will be applied if there is a tax treaty arrangement between mainland China and the jurisdiction of the foreign holding company. Holding companies in Hong Kong, for example, will be subject to a 5% withholding tax rate, subject to approval from the related PRC tax authorities. The ability of the Company’s PRC subsidiary and VIE and VIE’s subsidiaries to make dividends and other payments to the Company may also be restricted by changes in applicable foreign exchange and other laws and regulations. Foreign currency exchange regulation in China is primarily governed by the following rules: ● Foreign Exchange Administration Rules (1996), as amended in August 2008, or the Exchange Rules; ● Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules. Currently, under the Administration Rules, Renminbi is freely convertible for current account items, including the distribution of dividends, interest payments, trade and service related foreign exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities outside of China, unless the prior approval of the State Administration of Foreign Exchange (the “SAFE”) is obtained and prior registration with the SAFE is made. Foreign-invested enterprises like Rise King WFOE that need foreign exchange for the distribution of profits to its shareholders may affect payment from their foreign exchange accounts or purchase and pay foreign exchange rates at the designated foreign exchange banks to their foreign shareholders by producing board resolutions for such profit distribution. Based on their needs, foreign-invested enterprises are permitted to open foreign exchange settlement accounts for current account receipts and payments of foreign exchange along with specialized accounts for capital account receipts and payments of foreign exchange at certain designated foreign exchange banks. Although the current Exchange Rules allow the convertibility of Chinese Renminbi into foreign currency for current account items, conversion of Chinese Renminbi into foreign exchange for capital items, such as foreign direct investment, loans or securities, requires the approval of SAFE, which is under the authority of the People’s Bank of China. These approvals, however, do not guarantee the availability of foreign currency conversion. The Company cannot be sure that it will be able to obtain all required conversion approvals for its operations or the Chinese regulatory authorities will not impose greater restrictions on the convertibility of Chinese Renminbi in the future. Currently, most of the Company’s retained earnings are generated in Renminbi. Any future restrictions on currency exchanges may limit the Company’s ability to use its retained earnings generated in Renminbi to make dividends or other payments in U.S. dollars or fund possible business activities outside China. As of December 31, 2022 and 2021, there was $ nil |
Concentration Risk
Concentration Risk | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION RISK | 18. CONCENTRATION RISK The Company has a concentration of its account receivables with specific customers. As of December 31, 2022, two customers accounted for 16.6% and11.6% of net accounts receivable, respectively. As of December 31, 2021, four customers accounted for 20.3%, 12.0%, 11.2% and 10.8% of net accounts receivable, respectively. For the year ended December 31, 2022, one customer accounted for approximately 15.9% of the total revenue, respectively. For the year ended December 31, 2021, three customers accounted for approximately 23.4%, 21.9% and 10.7% of the total revenue, respectively. For the year ended December 31, 2020, two customers accounted for approximately 26.9% and 19.7% of the total revenue, respectively. As of December 31, 2022 and 2021, the Company had insignificant balance of accounts payable and did not further assess the concentration risk of accounts payable. For the year ended December 31, 2022, one supplier accounted for approximately 22.9% of the total cost of revenue. For the year ended December 31, 2021, two suppliers accounted for approximately 16.4% and 10.2% of the total cost of revenue, respectively. For the year ended December 31, 2020, no supplier accounted for more than 10% of the total cost of revenue. |
Share Based Compensation
Share Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE BASED COMPENSATION | 19. SHARE BASED COMPENSATION The following table summarizes our unvested restricted share units: Number of Weighted- Unvested at December 31, 2020 427,076 $ 2.54 Granted 18,000 $ 1.64 Vested (18,000 ) $ 1.77 Unvested at December 31, 2021 427,076 $ 2.53 Granted 18,000 $ 1.16 Vested (137,880 ) $ 2.37 Unvested at December 31, 2022 307,196 $ 2.52 Among the outstanding restricted share units brought forward from December 31, 2020, 119,880 restricted shares were vest in May 2022. The remaining restricted share units will vest in January 2024 through February 2029, upon fulfilment of requisite service period by the employees. On September 13, 2021, the Company granted and issued 18,000 shares of restricted Class A Ordinary Shares to three non-executive directors as their compensation for the year from March 1, 2021. The restricted shares were vested in a straight line method over the service period, and will be transferable after a lock-up period of six months. As of December 31, 2021, 15,000 share were vested. The grant-date value of each restricted share units was $1.64 by reference to the closing price on September 13, 2021, and the total fair value of these restricted Class A Ordinary Share units aggregated $29,520. On October 10, 2022, the Company granted and issued 18,000 shares of restricted Class A Ordinary Shares to three non-executive directors as their compensation for the year from March 1, 2022. The restricted shares were vested in a straight line method over the service period, and will be transferable after a lock-up period of six months. As of December 31, 2022, 15,000 share were vested. The grant-date value of each restricted share units was $1.16 by reference to the closing price on October 10, 2022, and the total fair value of these restricted Class A Ordinary Share units aggregated $20,880. For the years ended December 31, 2022, 2021 and 2020, the Company had share-based compensation expenses of $160,777, $211,832, $168,350, respectively. As of December 31, 2022, the Company expected to incur share-based compensation expenses of $363,670 over a weighted average period of 3.9 years. The following table summarizes share-based compensation expenses charged to operating expenses: For the Years Ended 2022 2021 2020 Selling and marketing expenses $ 61,607 $ 111,997 $ 93,439 General and administrative expenses 99,170 99,826 74,911 Total share-based compensation expenses $ 160,777 $ 211,823 $ 168,350 |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 20. SEGMENT REPORTING The Company’s organizational structure is based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but not limited to, customer base, homogeneity of service and technology. The Company’s operating segments are based on such organizational structure and information reviewed by the CODM to evaluate the operating segment results. Based on management’s assessment, the Company has determined that it has two operating segments for the year ended December 31, 2022: (i) MDMOOC services, and (ii) sales of patented drugs. For the years ended December 31, 2021 and 2020, the Company determined that it had one reporting segment which is MDMOOC services. The following table presents major accounts of statements of operations by segments for the year ended December 31, 2022. MDMOOC Services Sales of patented drugs Total Revenues $ 12,935,420 $ 1,216,096 $ 14,151,516 Cost of revenues $ (7,166,871 ) $ (627,981 ) $ (7,794,852 ) Total operating expenses $ (9,153,373 ) $ (157,753 ) $ (9,311,126 ) Net Loss $ (2,409,212 ) $ (413,107 ) $ (2,822,319 ) December 31, December 31, Total assets MDMOOC services $ 37,183,491 $ 36,267,420 Sales of patented drugs 1,430,854 - $ 38,614,345 $ 36,267,420 Substantially all of the Company’s revenues are derived from China based on the geographical locations where services are provided to customers. In addition, the Company’s long-lived assets are substantially all located in and derived from China, and the amount of long-lived assets attributable to any individual other country is not material. Therefore, no geographical segments are presented. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 21. COMMITMENTS AND CONTINGENCIES Contingencies From time to time, the Company 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, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. Lease commitment As of December 31, 2022, the Company leases offices space under 12 non-cancelable operating lease arrangements, 9 of which had a term over 12 months. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term. The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company discounted lease payments based on an estimate of its incremental borrowing rate to present value. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The table below presents the operating lease related assets and liabilities recorded on the balance sheet. December 31, December 31, Rights of use lease assets $ 1,666,777 $ 205,824 Operating lease liabilities, current 480,633 88,968 Operating lease liabilities, noncurrent 1,221,845 112,591 Total operating lease liabilities $ 1,702,478 $ 201,559 As of December 31, 2022 and 2021, the weighted average remaining lease term was 1.82 and 1.38 years, respectively, and discount rates were 4.75% for all of the operating leases. Rental expense for the years ended December 31, 2022, 2021, and 2020 were $498,166, $426,152, and $312,675, respectively. For the years ended December 31, 2022, 2021 and 2020, the cash payment for amounts included in the measurement of lease liabilities was $409,595, $480,636, and $350,934, respectively. The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2022: 2023 $ 550,915 2024 324,647 2025 317,927 2026 317,980 2027 and thereafter 397,475 Total lease payments 1,908,944 Less: imputed interest (206,466 ) Present value of lease liabilities $ 1,702,478 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 22. SUBSEQUENT EVENTS The Company has evaluated subsequent events through the issuance of the consolidated financial statements and no other subsequent event is identified that would have required adjustment or disclosure in the consolidated financial statements. |
Condensed financial information
Condensed financial information of the parent company | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 23. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY The subsidiary did not pay any dividend to the parent company for the periods presented. For the purpose of presenting parent only financial information, the parent company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the parent company as “Investment in subsidiaries and the income of the subsidiary is presented as “share of income of subsidiary”. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. The parent company did not have significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2022 and 2021. PARENT COMPANY BALANCE SHEETS December 31, December 31, ASSETS Cash and cash equivalents $ 4,110,216 $ 3,758,618 Due from subsidiaries 9,423,617 7,785,162 Investment in subsidiaries, VIE and VIE’s subsidiaries 16,906,213 21,022,642 Total Assets $ 30,440,046 $ 32,566,422 LIABILITIES AND EQUITY Total Liabilities $ - $ - Commitments and Contingencies Shareholders’ Equity Class A Ordinary Share (par value $0.0001 per share, 450,000,000 shares authorized; 20,531,423 and 19,453,423 shares issued and outstanding at December 31, 2022 and 2021, respectively) 2,054 1,946 Class B Ordinary Share (par value $0.0001 per share, 50,000,000 shares authorized; 5,497,715 and 5,497,715 shares issued and outstanding at December 31, 2022 and 2021, respectively) 550 550 Additional paid-in capital 24,998,388 22,986,975 Retained earnings 5,439,054 8,379,945 Accumulated comprehensive income - 1,197,006 Total Shareholders’ Equity 30,440,046 32,566,422 Total Liabilities and Shareholders’ Equity $ 30,440,046 $ 32,566,422 PARENT COMPANY STATEMENTS OF OPERATIONS For the Years Ended 2022 2021 2020 Equity in (loss) gain of subsidiaries $ (2,919,423 ) $ 266,775 $ 4,470,613 General and administrative expenses (23,193 ) (32,273 ) (12,233 ) Interest income 1,725 4,163 - Net (Loss) Income $ (2,940,891 ) 238,665 4,458,380 PARENT COMPANY STATEMENTS OF CASH FLOWS For the Years Ended 2022 2021 2020 Cash Flows from Operating Activities: Net Cash Provided by (Used in) Operating Activities $ 139,309 $ 3,737 $ (700,873 ) Cash Flows from Investing Activities: Loans repaid from (made to) VIE and its subsidiaries (1,638,455 ) (3,400,000 ) (3,690,000 ) Net Cash Used in Investing Activities (1,638,455 ) (3,400,000 ) (3,690,000 ) Cash Flows from Financing Activities: Proceeds from issuance of common stocks in connection with initial public offering, net off issuance cost - - 11,497,654 Proceeds from issuance of common stocks in connection with direct offering, net off issuance cost 1,850,744 - - Net Cash Provided by Financing Activities 1,850,744 - 11,497,654 Net increase (decrease) in cash and cash equivalents 351,598 (3,396,263 ) 7,106,781 Cash and cash equivalents at beginning of year 3,758,618 7,154,881 48,100 Cash and cash equivalents at end of year $ 4,110,216 $ 3,758,618 $ 7,154,881 |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principal of consolidation | Principal of consolidation Affiliates are entities controlled by the Company. Control exists when the Company has the power, directly and indirectly, to govern the financial and operating policies of an entity and be exposed to the variable returns from its activities. The financial statements of affiliates are included in the consolidated financial statements from the date that control commences until the date that control ceases. The consolidated financial statements include the accounts of Zhongchao Cayman, its subsidiaries and VIE and VIE’s subsidiaries, and Zhongchao Japan. These companies are controlled by a common controlling shareholder. Zhongchao Japan was acquired from the Company’s controlling shareholder in December 2021, such acquisition was accounted for as acquisition under common control and the Zhongchao Japan was consolidated from December 2021, and the comparative financial statement were prepared on a consolidated basis retrospectively from the date Zhongchao Japan was incorporated (i.e, October 30, 2020). In the consolidated financial statements, the assets and liabilities of Zhongchao Japan are presented at their carrying amount. The Company recognizes in equity any difference between the consideration paid and the net assets recognized. No goodwill or losses may be recognized on consolidation. The revenues, cost, operating expenses and other expenses are consolidated for the relevant periods to be presented in the financial statements as if the combination occurred on October 1, 2020. Zhongchao Japan’s historical financial statements have immaterial impact to the consolidated financial statements of the Company. All transactions and balances among the Company, its subsidiaries, VIE and Zhongchao Japan have been eliminated upon consolidation. |
Business combination and non-controlling interests | Business combination and non-controlling interests The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 “Business Combinations.” The cost of an acquisition is measured as the aggregate of the acquisition date fair value of the assets transferred to the sellers, liabilities incurred by the Company and equity instruments issued by the Company. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total costs of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the acquisition date amounts of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the acquisition date amounts of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of operations and comprehensive (loss) income. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Subsequent to the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any further adjustments are recorded in the consolidated statements of operations and comprehensive (loss) income. In a business combination achieved in stages, the Company re-measures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated statements of operations and comprehensive (loss) income. For the Company’s non-wholly owned subsidiaries, a noncontrolling interest is recognized to reflect the portion of equity that is not attributable, directly or indirectly, to the Company. Non-controlling interests represent the equity interests in the subsidiaries of the VIE that are not attributable, either directly or indirectly, to the VIE. For the Company’s consolidated financial statements, non-controlling interests represent minority shareholders’ 6.67% in Zhongxin and a minority shareholder’s 40% in West Angel, respectively, as of December 31, 2022. Non-controlling interests are presented as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated statements of operations and comprehensive (loss) income to distinguish the interests from that of the Company, its wholly-owned subsidiaries, VIE and VIE’s subsidiaries. |
Foreign currency translation | Foreign currency translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet. The resulting exchange differences are recorded in the consolidated statements of operations and comprehensive (loss) income. The reporting currency of the Company and its subsidiaries is U.S. dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In general, for consolidation purposes, assets and liabilities of the Company and its subsidiaries whose functional currency is not the US$, are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of the Company and its subsidiaries are recorded as a separate component of accumulated other comprehensive (loss) income within the statement of shareholders’ equity. Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods: December 31, December 31, Balance sheet items, except for equity accounts 6.8972 6.3726 For the Years Ended 2022 2021 2020 Items in the statements of operations and comprehensive (loss) income, and statements of cash flows 6.7290 6.4508 6.9020 No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, fair value of the Company’s ordinary shares, fair value of the Company’s subsidiaries, determinations of the useful lives and valuation of long-lived assets, valuation of goodwill, estimates of allowances for doubtful accounts, valuation of deferred tax assets, and other provisions and contingencies. |
Fair value of financial instruments | Fair value of financial instruments The Company’s financial instruments are accounted for at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of the fair value hierarchy are described below: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value. As of December 31, 2022 and 2021, financial instruments of the Company comprised primarily current assets and current liabilities including cash and cash equivalents, accounts receivable, due from a related party, other receivables, loans receivable, accounts payable and other payables, which approximate their fair values because of the short-term nature of these instruments. Short-term investments are trading securities with observable market price in active market. They are classified as level 1 investment and are measured at fair value as of December 31, 2022 and 2021. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents primarily consist of bank deposits, as well as highly liquid investments, with original maturities of three months or less, which are unrestricted as to withdrawal and use. |
Short-term investments | Short-term investments Short-term investments comprised of certain listed equity securities purchased through various open market transactions. Equity securities not measured by the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated statements of operations and comprehensive (loss) income, according to ASC 321 “Investments — Equity Securities”. During the years ended December 31, 2022 and 2021, the Company purchased certain listed equity securities and accounted for such investments as “short-term investments” and subsequently measure the investments at fair value in the account of “other income, net”. |
Accounts receivable | Accounts receivable Accounts receivable are recorded at the gross amount less an allowance for any uncollectible accounts and do not bear interest. The Company provides customers with credit term ranging between one to six months, depending on credit assessment of customers. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history and the current economic conditions to make adjustments in the allowance when necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. During the years ended December 31, 2022, 2021 and 2020, the Company accrued provisions against doubtful accounts of $753,447, $1,449,827 and $336,367, respectively, among which $543,315, $1,449,827 and $336,367 were written off as the Company evaluated it is remote to collect the balance. As of December 31, 2022 and 2021, allowances for doubtful accounts against accounts receivable were $207,269 and $ nil |
Inventories | Inventories Inventories of the Company consist of patented drugs. Inventories are stated at the lower of cost or net realizable value. Inventory costs include expenses that are directly or indirectly incurred in the purchase of patented drugs. Cost of inventories is determined using the weighted average cost method. Inventories are written down to estimated net realizable value, which could be impacted by certain factors including historical usage, expiration date, expected demand, anticipated sales price, new product development schedules, product obsolescence, customer concentrations and other factors. The Company continually evaluate the recoverability, and inventory provisions are recorded in the consolidated statements of operations and comprehensive (loss) income. For the years ended December 31, 2022, 2021 and 2020, the Company did not provide inventory provisions against patented drugs. |
Prepayments | Prepayments Prepayments represent amounts advanced to suppliers for providing services to the Company. The suppliers usually require advance payments when the Company orders service and the prepayments will be utilized to offset the Company’s future payments. These amounts are unsecured, non-interest bearing and generally short-term in nature. |
Investments in equity method investees | Investments in equity method investees In addition to the investment of investees over which the Company exercised significant influences, the Company also accounts for the investment in a limited partnership in which the Company holds more than minor equity interest (3% - 5%) in accordance with ASC 970-323-25-6 under the equity method of accounting. The Company applies the equity method to account for investment in a limited partnership and other investees, according to ASC 323 “Investments — Equity Method and Joint Ventures”, over which it has significant influence but does not own a controlling financial interest. Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of operations and comprehensive (loss) income. The Company records its share of the results of the equity investees on a one quarter in arrears basis. When the Company’s share of losses of the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee. The Company continually reviews its investments in equity investees to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee; other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee operates, including consideration of the impact of the COVID-19 pandemic; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value. No impairment of was recognized for the years ended December 31, 2022, 2021 and 2020. |
Investments in an equity security | Investments in an equity security Equity securities not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated statements of operations and comprehensive (loss) income, according to ASC 321 “Investments — Equity Securities”, which the Company adopted beginning January 1, 2021. As of December 31, 2022, the Company had investment in one equity security. The Company elected to record an equity investment in privately held companies using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer. As a practical expedient, the Company uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of the investment in the fund. NAV is primarily determined based on information provided by financial institution. The equity investment in privately held companies accounted for using the measurement alternative are subject to periodic impairment reviews. The Company’s impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of the equity security, including consideration of the impact of the COVID-19 pandemic. |
Property and equipment | Property and equipment Property and equipment primarily consist of buildings, office equipment, and vehicle. Properties and equipment are stated at cost less accumulated depreciation less any provision required for impairment in value. Depreciation is computed using the straight-line method with residual value rate of 5% based on the estimated useful lives as follows: Land and buildings 7 - 21 years Office equipment 3 years Vehicle 4 years Leasehold improvements 5 years Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is recorded in other income, net in the consolidated statements of operations and comprehensive (loss) income. |
Prepayments for lease of land | Prepayments for lease of land Prepayments for lease of land represent prepayments to the lessee for sub-lease of two land use rights. Prepayments for lease of land are carried at cost less accumulated amortization and any impairment loss. Amortization is provided against the cost of lease prepayments on a straight-line basis over the period of the rights, which are 16 years and 32 years, respectively. |
Intangible assets, net | Intangible assets, net The Company acquired intangible assets through either purchase or acquisition in the business combination. Intangible assets acquired through business combinations are recognized as assets separate from goodwill if they satisfy either the “contractual-legal” or “separability” criterion. Intangible assets arising from business combinations are measured at fair value upon acquisition using valuation techniques such as discounted cash flow analysis. Major assumptions used in determining the fair value of these intangible assets include future growth rates and weighted average cost of capital. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method as follows: Purchased intangible assets are recognized and measured at fair value upon acquisition. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method based on their estimated useful lives as follows: Trademarks 10 years License 10 years Software 3 - 10 years |
Impairment of long-lived assets other than goodwill | Impairment of long-lived assets other than goodwill The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment of long-lived assets was recognized for the years ended December 31, 2022, 2021 and 2020. |
Goodwill | Goodwill Goodwill represents the excess of the purchase consideration over the acquisition date amounts of the identifiable tangible and intangible assets acquired and liabilities assumed from the acquired entity as a result of the Company’s acquisitions of interests in its subsidiaries. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. The Company first assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In the qualitative assessment, the Company considers factors such as macroeconomic conditions, industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations, business plans and strategies of the reporting unit, including consideration of the impact of the COVID-19 pandemic. Based on the qualitative assessment, if it is more likely than not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is performed. No impairment of goodwill was recognized for the years ended December 31, 2022. |
Revenue recognition | Revenue recognition ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue 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 accordance with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company identified each distinct service, or each series of distinct services that are substantially the same and that have the same pattern of transfer to the customer, as a performance obligation. Transaction price is allocated among different performance obligations identified in one contract. Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable consisted of amounts invoiced and amounts for which revenue recognized prior to invoicing when the Company has satisfied its performance obligation and has the unconditional right to payment. Advances from customers consists of payments received related to unsatisfied performance obligations at the end of the period. The Company applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Company has no material incremental costs for obtaining contracts with customers that the Company expects the benefit of those costs to be longer than one year. Medical training and education services The Company designs and provides medical training and education courses in both online and offline formats to physicians and allied healthcare professionals (the “training and education services”). The Company identifies a single performance obligation from contracts. The Company recognizes revenue at the point when the service was rendered. Payments received in advance from customers are recorded as “advance from customers” in the consolidated balance sheets. Advance from customers is recognized as revenue when the Company delivers the courses to its customers. Such advance payment received are non-refundable. In cases where fees are collected after the sales, revenue and accounts receivable are recognized upon delivery of medical training and education courses to the customers. The fees are fixed and determinable at the inception of the services. Offline medical training and education services courses – though customers can benefit from each service commitment, including design, production and presentation of medical courses, together with other readily available resources. The promises in the contracts with customers is integration of all of these service commitments. The Company concludes that these service commitments are highly dependent with each other, in the context of the contract term. Thus, these service commitments are not distinct from each other, and the Company combines all service commitments performed as a single performance obligation. In cases where the Company engages third party experts to provide presentation in medical courses, as the Company determines the contents and the participants, it has the ability to direct these experts to provide medical training services for the Company. Therefore, the Company is primarily responsible for fulfilling the promise to provide the medial courses and has the discretion in establishing the transaction price. The Company is a principal in the provision of services and recognizes revenues on a gross basis. Online medical training and education services courses – the promises in the contracts with customers consist of provision of online courses and presentation of the courses online for users to access for a period of time. The performance obligation of presentation of the courses online for users for a period of time is immaterial in the context of the contract because presentation of each course incurred no significant additional cost, nor will it occupy any significant resources of the Company, except for little digital space on the Company’s server, which is inconsequential. Therefore, the Company combines all service commitments performed as a single performance obligation. Patient management services in patient-aid projects The Company is engaged by NFPs and pharmaceutical enterprises to assist in the operation of patient-aid projects with a purpose to facilitate qualified patients to obtain free drug treatment from NFPs. The Company is responsible to provide doctors with access to training courses or training materials in connection with the drug treatment, review the completeness of application documents from patients, and other ad-hoc works (such programs with these plug-in features are hereinafter referred as the “patient-aid projects”). The arrangements are structured as fixed price contracts. The price is determined as stated in contracts and does not include any variable consideration. The Company identifies a single performance obligation from contracts and recognizes revenue over a period of time during which the Company provides the assistance to the NFPs till the earlier of the expiration of contract period or the free drugs are completely delivered. The Company uses an input-based method to measure the progress, by reference to the cost incurred in performing the obligation. The fees are fixed at the inception of the services and are collected either in advance or after the services are provided. Sales of patented drugs Starting from the year of 2022, the Company commenced sales of patented drugs to customers. The Company identified one performance obligation in the contracts with customers, and the transaction price is fixed. No sales incentives or return of goods is allowed only if there are quality issues. The Company recognized revenues upon sales of patented drugs upon acceptance of goods by customers. Other revenues The Company also provides consulting services to its customers, including drafting research papers and providing other academic supports, and facilitation services for hospitals and patients through online platform. The consulting services are accounted for as a single performance obligation and was recognized as revenue when the Company delivers services to the customers. Fees are generally collected after provision of services. The facilitation services are accounted for as a single performance obligation and was recognized as revenue when the Company completed facilitation services to the customers. For the years ended December 31, 2022, 2021, and 2020, other revenues accounted for 0.3%, 1.2% and 0% of consolidated revenues, respectively. The following table identifies the disaggregation of our revenue for the years ended December 31, 2022, 2021 and 2020, respectively. For the Years Ended 2022 2021 2020 Medical training and education services $ 6,604,487 $ 8,754,120 $ 10,543,852 Patient management services in patient-aid projects 6,288,602 7,343,343 7,445,936 Sales of patented drugs 1,216,096 - - Other revenues 42,331 199,307 - Total $ 14,151,516 $ 16,296,770 $ 17,989,788 |
Cost of revenues | Cost of revenues Cost of revenues was comprised of direct related costs incurred for preparation of online medical training courses and offline education seminars and patient-aid projects and cost of patented drugs. The cost of preparation of online medical training courses and offline education seminars and patient management services in patient-aid projects includes expenses of travelling and accommodation, seminar site-rental, video production and backdrop production, professional service fees charged by experts who provide online and offline seminars, salary and welfare expenses incurred by the key members of the editorial, design and production team, and labor cost for patient-aid projects. The travelling and accommodation expenses, including but not limited to the air-ticket expenses and hotel accommodation expenses, represented the costs arising from lecturers’ attendance and participation of the offline seminars. Other media expenses were incurred by the Company’s medical department for videos production, live streaming of the offline seminars, and materials collection to create online courses. These travelling, accommodation and media expenses are well budgeted before any agreements entered into by the Company and the customers. Therefore, such expenses are well covered by the customers under those agreements. The Company is not reimbursed by the customers separately. |
Employee benefits | Employee benefits The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $817,345, $804,730, and $310,637 for the years ended December 31, 2022, 2021 and 2020, respectively. |
Research and development costs | Research and development costs Research and development costs are mainly comprised of salary and welfare expenses for the Company’s IT department employees who work for the development of the Company’s platform and database, and software and related intellectual property expenses which were used to develop an extensive library of licensed content and medical database. For the years ended December 31, 2022, 2021, and 2020, the Company incurred research and development expenses of $411,524, $758,878, and $816,553, respectively. |
Advertising expenses | Advertising expenses Advertising expenses primarily include advertisement for the Company’s platform for online medical courses. Advertising costs are expensed as incurred and the total amounts charged to “selling and marketing expenses” in the consolidated statements of operations and comprehensive (loss) income were $989,900, $2,204,233, and $2,851,648 for the years ended December 31, 2022, 2021 and 2020, respectively. |
Share-based compensation | Share-based compensation Share-based awards granted to the Company’s employees and one non-employee are measured at fair value on grant date and measurement date, respectively, and share-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the accelerated attribution method, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares. At each date of measurement, the Company reviews internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by the Company, including but not limited to the fair value of the Company ordinary shares, expected life, expected volatility and expected forfeiture rates. The Company is required to consider many factors and make certain assumptions during this assessment. If any of the assumptions used to determine the fair value of the share-based awards changes significantly, share-based compensation expense may differ materially in the future from that recorded in the current reporting period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company for accounting purposes. |
Value added tax | Value added tax The Company is subject to value added tax (“VAT”) and related surcharges on the revenues earned for both sales of products and rendering of services in the PRC. The applicable rate of value added tax is 6% on services and 13% on sales of products. The related surcharges for revenues derived from provision medical courses are deducted from gross receipts to arrive at net revenues. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with the U.S. GAAP for income taxes. Under the asset and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes. The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is more likely than not these items will be utilized against taxable income in the future. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. As of December 31, 2022, income tax returns for the tax years ended December 31, 2017 through December 31, 2021 remain open for statutory examination. |
(Loss) earnings per share | (Loss) earnings per share Basic (loss) earnings per ordinary share is computed by dividing net (loss) income attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted (loss) earnings per share is computed by dividing net (loss) income attributable to ordinary shareholders by the sum of the weighted average number of ordinary share outstanding and of potential ordinary share (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share. |
Comprehensive (loss) income | Comprehensive (loss) income A Comprehensive (loss) income includes net (loss) income and other comprehensive (loss) income arising from foreign currency adjustments. Comprehensive (loss) income is reported in the consolidated statements of operations and comprehensive (loss) income. |
Commitments and contingencies | Commitments and contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450-20, “Loss Contingencies”, the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. |
Operating lease | Operating lease The Company leases its offices which are classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. No impairment for right-of-use lease assets as of December 31, 2022 and 2021. |
Segment reporting | Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (the “CODM”), which is comprised of certain members of the Company’s management team. The Company’s organizational structure is based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but not limited to, customer base, homogeneity of service and technology. The Group’s operating segments are based on such organizational structure and information reviewed by the Company’s CODM to evaluate the operating segment results. Based on management’s assessment, the Company has determined that it has two operating segments: (i) provision of training and education services and assistance in patient-aid projects (collectively “MDMOOC services”). (ii) sales of patented drugs. |
Reclassification | Reclassification Certain items in the financial statements of comparative period have been reclassified to conform to the financial statements for the current period. The reclassification has no impact on the total assets and total liabilities as of December 31, 2022 or on the statements of operations for the year ended December 31, 2022. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses Measurement of Credit Losses on Financial Instruments The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material impact on its the consolidated financial position, statements of operations and cash flows. |
Significant risks and uncertainties | Significant risks and uncertainties 1) Credit risk Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of December 31, 2022, the Company held cash and cash equivalents of $11,520,453, among which were $4,700,379 was deposited in financial institutions located in Mainland China, and each bank account is insured by the government authority with the maximum limit of RMB 500,000 (equivalent to approximately $72,500). The Company also held cash of $4,709,310 deposited in the financial institutions in the United States, and each bank account is insured with the maximum limit of $250,000 by Federal Deposit Insurance Corporation (“FDIC”) insurance. In addition, the Company maintains certain bank accounts in Japan with cash balance of $1,538,404, which are not insured by FDIC insurance or other insurance. To limit exposure to credit risk relating to deposits, the Company primarily place cash and cash equivalent deposits with large financial institutions which management believes are of high credit quality and the Company also continually monitors their credit worthiness. The Company’s operations are carried out in China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation among other factors. 2) Foreign currency risk Substantially all of the Company’s operating activities and the Company’s assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. 3) Other risk The Company’s business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, such as the COVID-19 outbreak and spread, management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and results of its operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Organization and Principal Ac_2
Organization and Principal Activities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of financial statements of zhongchao shanghai | Name Background Ownership Zhongchao Group Inc. (“Zhongchao BVI”) ● A BVI company 100% owned by Zhongchao Cayman ● Incorporated on April 23, 2019 ● A holding company Zhongchao USA LLC (“Zhongchao USA”) ● A United States company 100% owned by Zhongchao Cayman ● Incorporated on 3 September, 2020 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology (no medical diagnosis and treatment activities allowed). Zhongchao Japan (“Zhongchao Japan”) ● A Japan company 100% owned by Zhongchao USA since December 2021. Before December 2021, 10% owned by Zhongchao USA and 90% owned by Mr. Weiguang Yang ● Incorporated on 1 October, 2020 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology (no medical diagnosis and treatment activities allowed). Zhongchao Group Limited (“Zhongchao HK”) ● A Hong Kong company 100% owned by Zhongchao BVI ● Incorporated on May 14, 2019 ● A holding company Beijing Zhongchao Zhongxing Technology Limited (“Zhongchao WFOE”) ● A PRC company and deemed a wholly foreign owned enterprise 100% owned by Zhongchao HK ● Incorporated on May 29, 2019 ● A holding company Zhongchao Shanghai ● A PRC limited liability company VIE of Beijing Zhongchao Zhongxing Technology Limited ● Incorporated on August 17, 2012 ● Engaged in technology development, technology transfer, and technical services in the field of medical technology, technical consulting in the field of network technology, and medical information consulting Shanghai Maidemu Cultural Communication Corp. (“Shanghai Maidemu”) ● A PRC limited liability company 100% owned by Zhongchao Shanghai ● Incorporated on March 12, 2015 ● Planning for cultural and artistic exchanges, designing, producing, acting for and publishing various kinds of advertisements, and medical consultation (no medical diagnosis and treatment activities allowed). Shanghai Huijing Information Technology Co., Ltd., (“Shanghai Huijing”) ● A PRC limited liability company 100% owned by Shanghai Maidemu ● Incorporated on September 28, 2016 ● Engaged in technology development, transfer, service and consulting in the fields of computer technology, graphic designing, website page designing, planning cultural and artistic exchanges. Shanghai Zhongxun Medical Technology Co., Ltd. (“Shanghai Zhongxun”) ● A PRC limited liability company 100% owned by Zhongchao Shanghai ● Incorporated on May 27, 2017 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology (no medical diagnosis and treatment activities allowed). Shanghai Zhongxin Medical Technology Co., Ltd (“Shanghai Zhongxin”) ● A PRC limited liability company 93.33% owned by Shanghai Zhongxun* ● Incorporated on October 10, 2018 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. Beijing Zhongchao Boya Medical Technology Co., Ltd. (“Beijing Boya”) ● A PRC limited liability company 70% owned by Zhongchao Shanghai, and 30% owned by Mr. Zhengbo Ma on behalf of Zhongchao Shangha before December 8, 2021, and 30% owned by Shanghai Lingzhong Enterprise Management LLP on behalf of Zhongchao Shanghai after December 8, 2021 ● Incorporated on April 27, 2020 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. Hainan Zhongteng Medical Technology Co., Ltd. (“Hainan Zhongteng”) ● A PRC limited liability company 100% owned by Beijing Boya ● Incorporated on July 16, 2021 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. Zhixun Internet Hospital (Liaoning) Co., Ltd. (“Liaoning Zhixun”) ● A PRC limited liability company 100% owned by Beijing Boya ● Incorporated on July 6, 2020 ● Engaged in online hospital services, medical services, elderly nursing services, remote healthcare management services, healthcare consulting services, sales of medical appliances and other medical products. Shanghai Xinyuan Human Resources Co., Ltd. (“Shanghai Xinyuan”) ● A PRC limited liability company 100% owned by Shanghai Zhongxin ● Incorporated on January 13, 2021 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. Hainan Muxin Medical Technology Co., Ltd. (“Hainan Muxin”) ● A PRC limited liability company 100% owned by Shanghai Zhongxin ● Incorporated on July 21, 2021 ● Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. Ningxia Zhongxin Internet Hospital Co., Ltd. (“Ningxia Zhongxin”) ● A PRC limited liability company 100% owned by Shanghai Zhongxin ● Incorporated on May 18, 2021 and cancelled on September 1, 2022 ● Engaged in online hospital operation, provide online medical service, online consultation, prescription information services, and medication retails. Chongqing Xinjiang Pharmaceutical Co., Ltd. (“Chongqing Xinjiang”) ● A PRC limited liability company 100% owned by Shanghai Zhongxun ● Incorporated on January 18, 2022 ● Engaged in trading of patented drugs Beijing Yisuizhen Technology Co., Ltd. (“Beijing Yisuizhen”) ● A PRC limited liability company 100% owned by Hainan Muxin ● Incorporated on November 8, 2021 ● Acquired by the Company on August 31, 2022 ● Provision of online platform for communication between hospitals and patients West Angel (Beijing) Health Technology Co., Ltd. (“West Angel”) ● A PRC limited liability company 60% owned by Beijing Yisuizhen ● Incorporated on July 1, 2003 ● Acquired by the Company on August 31, 2022 ● Provision of online platform for communication between hospitals and patients |
Schedule of financial statements is reconciled | December 31, December 31, Number of Class A Ordinary Shares legally issued and outstanding 19,181,355 18,103,355 Class A Ordinary Shares committed to be issued to HF Capital 1,350,068 1,350,068 Number of Class A Ordinary Shares outstanding and issued presented on the financial statements 20,531,423 19,453,423 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of exchange rates | December 31, December 31, Balance sheet items, except for equity accounts 6.8972 6.3726 For the Years Ended 2022 2021 2020 Items in the statements of operations and comprehensive (loss) income, and statements of cash flows 6.7290 6.4508 6.9020 |
Schedule of property and equipment | Land and buildings 7 - 21 years Office equipment 3 years Vehicle 4 years Leasehold improvements 5 years |
Schedule of amortized over their estimated useful lives | Trademarks 10 years License 10 years Software 3 - 10 years |
Schedule of disaggregation of our revenue | For the Years Ended 2022 2021 2020 Medical training and education services $ 6,604,487 $ 8,754,120 $ 10,543,852 Patient management services in patient-aid projects 6,288,602 7,343,343 7,445,936 Sales of patented drugs 1,216,096 - - Other revenues 42,331 199,307 - Total $ 14,151,516 $ 16,296,770 $ 17,989,788 |
Variable Interest Entities an_2
Variable Interest Entities and Other Consolidation Matters (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entities and Other Consolidation Matters [Member] | |
Schedule of consolidated financial statements | December 31, December 31, ASSETS Cash and cash equivalents $ 4,500,379 $ 7,117,728 Accounts receivable 6,772,988 9,218,883 Inventories 189,106 - Other current assets 1,840,182 2,029,794 Investment in a limited partnership and an equity investee 1,179,300 1,993,285 Property and equipment, net 3,111,717 3,168,441 Goodwill 5,767,504 - Right of use assets 1,666,777 205,824 Deferred tax assets 1,800,493 2,025,043 Other noncurrent assets 1,456,322 414,105 Total Assets $ 28,284,768 $ 26,173,103 LIABILITIES Advances from customers $ 395,263 $ 7,432 Income tax payable 2,292,765 2,478,273 Operating lease liabilities, current and non-current 1,702,478 201,559 Due to Zhongchao Inc.* 762,962 599,347 Other current liabilities 992,558 1,011,371 Deferred tax liabilities 208,200 - Total Liabilities $ 6,354,226 $ 4,297,982 For the years ended December 31, 2022 2021 2020 Revenues $ 14,151,516 $ 16,096,769 $ 17,989,788 (Loss) Income from Operations $ (1,716,154 ) $ 418,235 $ 4,525,855 Net (Loss) Income $ (1,427,296 ) $ 838,838 $ 4,484,029 * The balances due from/to Zhongchao Inc., are eliminated on consolidation. |
Acquisition of Beijing Yisuiz_2
Acquisition of Beijing Yisuizhen and its Subsidiary (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of allocation of the purchase price as of the date of acquisition | Net assets deficit assumed (i) $ (60,092 ) Software acquired in business combination (ii) 1,000,406 Goodwill 5,767,504 Deferred tax liabilities (234,225 ) Non-controlling interest (iii) (2,585,087 ) Foreign currency adjustments 120,261 $ 4,008,767 Total purchase price is comprised of Cash consideration $ 3,055,432 Fair value of previously held equity interests (iv) 708,129 Fair value of 6.67% equity interest in Zhongxin (v) 393,816 Less: cash from transfer of fair value of 6.67% equity interest in Zhongxin (v) (148,610 ) $ 4,008,767 (i) Net asset deficit assumed primarily included other current liabilities for operating expenses. (ii) Software acquired in the business combination had estimated useful life of 3 years. (iii) Fair value of the noncontrolling interests was estimated with reference to the market price per share as of the acquisition date. (iv) A gain of $850 in relation to the revaluation of the previously held equity interests was recorded in other income, net in the consolidated statements of operations and comprehensive (loss) income for the year ended December 31, 2022. The fair value of the previously held equity interests approximated the cost of investments as Beijing Yisuizhen has not commenced operations since its setup. (v) In exchange for the equity interest in Beijing Yisuizhen and West Angel, the Company also granted 6.67% equity interest in Shanghai Zhongxin, with fair value of $393,816 (RMB 2,713,000), to four shareholders of West Angel at cash consideration of $148,610 (RMB 1,000,000). The Company engaged a third party valuation team to estimate the fair value of equity interest of Shanghai Zhongxin. As of December 31, 2022, the four shareholders paid the cash consideration to Mr. Yang, the Chief Executive Officer of the Company. The Company recorded the outstanding balance in the account of due from related parties (Note 16). |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Current Assets [Abstract] | |
Schedule of Other current assets | December 31, December 31, Due from a third party (i) $ 205,726 $ - Office rental deposit 128,194 203,896 Interest receivable 88,720 78,950 Prepaid rental fees 803 45,607 Others 69,597 47,256 $ 493,040 $ 375,709 (i) During the year ended December 31, 2022, the Company sold one of its properties to a third party at cash consideration of $1,323,308 (Note 8), among which the third party paid $1,112,440. The Company recorded the remaining balance as “due from a third party” in the account of other current assets. |
Loans Receivable (Tables)
Loans Receivable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of loans receivable | December 31, December 31, Borrower A $ - $ 266,767 Borrower B - 199,893 Borrower C - 404,008 Borrower D 1,590,000 1,590,000 Borrower E 250,000 200,000 $ 1,840,000 $ 2,660,668 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | December 31, December 31, Land and buildings $ 4,105,956 $ 4,063,587 Office equipment 79,082 460,525 Vehicle 32,535 35,213 Leasehold improvements 53,253 - Less: accumulated depreciation (379,879 ) (636,239 ) $ 3,890,947 $ 3,923,086 |
Prepayments for Lease of Land (
Prepayments for Lease of Land (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepayments for Lease of Land [Abstract] | |
Schedule of prepayments for lease of land | December 31, December 31, Prepayments for lease of land $ 401,031 $ 434,045 Less: accumulated amortization (96,244 ) (80,698 ) $ 304,787 $ 353,347 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | December 31, December 31, Software $ 1,041,872 $ 44,880 Trademark and license 11,133 12,050 Less: accumulated amortization (140,951 ) (26,671 ) $ 912,054 $ 30,259 |
Schedule of amortization of intangible assets | December 31, For the year ended December 31, 2023 $ 338,636 For the year ended December 31, 2024 338,636 For the year ended December 31, 2025 227,492 For the year ended December 31, 2026 5,105 For the year ended December 31, 2027 2,185 $ 912,054 |
Investments in Equity Method _2
Investments in Equity Method Investees (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investment Company, Financial Highlights [Abstract] | |
Schedule of investments in equity investments | December 31, December 31, Ningbo Meishan Xinaishan Equity Investment Limited Partnership (“limited partnership”) (a) $ 1,179,300 $ 1,276,466 Beijing Yisuizhen (b) - 716,819 $ 1,179,300 $ 1,993,285 (a) On November 5, 2020, the Company entered into a five-year partnership agreement to invest $1,217,039, for 28% partnership interest in the limited partnership. The funds raised by the limited partnership are invested in one PRC private company engaged in immunotherapy. For the years ended December 31, 2022, 2021 and 2020, equity investment loss of $80, $13,758 and $25,622 have been recorded in other income, net for the Company’s share of the operating loss of the limited partnership. As of December 31, 2022 and 2021, no significant impairment indicators have been noted in connection with the investment. (b) On November 8, 2021, the Company newly set up Beijing Yisuizhen with other investors and acquired 47% equity interest at cash consideration of $708,129. In August 2022, the Company, through Hainan Muxin, acquired additional 53% equity interest in Beijing Yisuizhen, which was consolidated in the Company’s consolidated financial statements. Beijing Yisuizhen has not commenced operations. In addition, the Company did not note significant impairment indicators in connection with the investment. |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Current Assets [Abstract] | |
Schedule of accrued expenses and other current liabilities | December 31, December 31, Other tax payable $ 379,712 $ 616,356 Accrued payroll 296,866 301,260 Customer deposits payable 83,367 - Other current liabilities 95,595 57,185 $ 855,540 $ 974,801 |
Schedule of other tax payables | December 31, December 31, Value added tax payable $ 354,794 $ 579,516 Local taxes payable 24,918 36,840 $ 379,712 $ 616,356 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of (loss) profit before income tax benefits (expenses) are summarized | For the Years Ended 2022 2021 2020 PRC $ (1,243,361 ) $ 631,917 $ 4,976,484 Non-PRC (1,306,645 ) (742,670 ) (34,600 ) Total $ (2,550,006 ) $ (110,753 ) $ 4,941,884 |
Schedule of income tax expenses | For the Years Ended 2022 2021 2020 Current income tax expenses $ (138,188 ) $ (997,198 ) $ (543,211 ) Deferred income tax benefits (134,125 ) 1,346,616 58,424 Income tax benefits (expenses) $ (272,313 ) $ 349,418 $ (484,787 ) |
Schedule of reconciliation of statutory tax rate to effective tax rate | For the Years Ended 2022 2021 2020 PRC statutory income tax rate 25 % 25 % 25 % Effect of different income tax rates in other jurisdictions (2.11 )% (34.11 )% 0 % Effect of preferential tax benefits 12.72 % 167.36 % (13.96 )% Effect of non-deductible expenses (1.22 )% (54.84 )% 0.35 % Effect of research and development credits 3.06 % 104.55 % (1.47 )% Effect of deferred tax rate change (34.22 )% 107.53 % 0 % Effect of changes in valuation allowance (13.91 )% 0 % 0 % Effective tax rate (10.68 )% 315.49 % 9.81 % |
Schedule of deferred tax assets | December 31, December 31, Deferred tax assets: Excess advertising expense $ 842,295 $ 911,799 Deferred Intangible assets amortization 25,790 33,590 Net operating loss carrying forward 1,052,209 1,079,962 Share-based compensation 178,764 156,928 Doubtful allowance against accounts receivable 51,817 - Changes in fair value of short-term investments 50,502 - Downward adjustments in investments in an equity security 13,733 - Lease liabilities 71,024 31,615 Less: Deferred tax liability - Right of use assets (81,910 ) (37,184 ) Less: Valuation allowance on deferred tax assets (339,495 ) - Deferred tax assets, net $ 1,864,729 $ 2,176,710 Deferred tax liability Software acquired in business combination 208,200 - $ 208,200 $ - |
(Loss) Earnings Per Share (Tabl
(Loss) Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted loss per ordinary share | For the Years Ended 2022 2021 2020 Net (Loss) Income Attributable to Zhongchao Inc.’s shareholders $ (2,940,891 ) $ 238,665 $ 4,458,380 Weighted average number of ordinary share outstanding Basic and Diluted 25,997,757 24,938,513 24,425,637 (Loss) Earnings per share Basic and Diluted $ (0.113 ) $ 0.010 $ 0.183 |
Related Party Transactions an_2
Related Party Transactions and Balances (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of relationships with related parties | Name Relationship with the Company Yang Weiguang Chairman of the Board, Chief Executive Officer Beijing Ougaini Trading Co., Ltd (“Beijing Ougaini”) Controlled by an immediate family member of Mr. Yang Weiguang Beijing Yisuizhen The Company owned 47% and 100% equity interest before and after August 17, 2022, respectively |
Schedule of relationships with related parties | For the Years Ended 2022 2021 2020 Beijing Ougaini $ 19,696 $ - $ - |
Schedule of the balances with related parties | December 31, December 31, Prepayments Beijing Ougaini $ 115,989 $ - Due from related parties Yang Weiguang (i) 226,178 - Beijing Yisuizhen (ii) - 392,305 $ 226,178 $ 392,305 (i) As of December 31, 2022, the Company had a balance of $226,178 due from Mr. Yang Weiguang. The balance was comprised of the following: - A balance of $144,986 arising from transfer of 6.67% equity interest of Shanghai Zhongxin to four former shareholders of West Angel, who paid consideration to Mr. Yang. (Note 4) - A balance of $81,192 as tuition paid on behalf of to Mr. Yang. As of the date of this report, Mr. Yang has repaid the above outstanding balances to the Company. (ii) As of December 31, 2021, the Company had a balance of $392,305 due from Beijing Yisuizhen, over which the Company owned 47% equity interest before August 17, 2022. The balance was a loan to the newly set up equity investee to support its working capital. The outstanding balance was repaid by Beijing Yisuizhen before business combination with the Company. |
Share Based Compensation (Table
Share Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of unvested restricted share units | Number of Weighted- Unvested at December 31, 2020 427,076 $ 2.54 Granted 18,000 $ 1.64 Vested (18,000 ) $ 1.77 Unvested at December 31, 2021 427,076 $ 2.53 Granted 18,000 $ 1.16 Vested (137,880 ) $ 2.37 Unvested at December 31, 2022 307,196 $ 2.52 |
Schedule of share based compensation operating expenses | For the Years Ended 2022 2021 2020 Selling and marketing expenses $ 61,607 $ 111,997 $ 93,439 General and administrative expenses 99,170 99,826 74,911 Total share-based compensation expenses $ 160,777 $ 211,823 $ 168,350 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of presents major accounts of statements of operations | MDMOOC Services Sales of patented drugs Total Revenues $ 12,935,420 $ 1,216,096 $ 14,151,516 Cost of revenues $ (7,166,871 ) $ (627,981 ) $ (7,794,852 ) Total operating expenses $ (9,153,373 ) $ (157,753 ) $ (9,311,126 ) Net Loss $ (2,409,212 ) $ (413,107 ) $ (2,822,319 ) |
Schedule of geographical segments | December 31, December 31, Total assets MDMOOC services $ 37,183,491 $ 36,267,420 Sales of patented drugs 1,430,854 - $ 38,614,345 $ 36,267,420 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of operating lease related assets and liabilities | December 31, December 31, Rights of use lease assets $ 1,666,777 $ 205,824 Operating lease liabilities, current 480,633 88,968 Operating lease liabilities, noncurrent 1,221,845 112,591 Total operating lease liabilities $ 1,702,478 $ 201,559 |
Schedule of maturities of lease liabilities | 2023 $ 550,915 2024 324,647 2025 317,927 2026 317,980 2027 and thereafter 397,475 Total lease payments 1,908,944 Less: imputed interest (206,466 ) Present value of lease liabilities $ 1,702,478 |
Condensed financial informati_2
Condensed financial information of the parent company (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of parent company balance sheet | December 31, December 31, ASSETS Cash and cash equivalents $ 4,110,216 $ 3,758,618 Due from subsidiaries 9,423,617 7,785,162 Investment in subsidiaries, VIE and VIE’s subsidiaries 16,906,213 21,022,642 Total Assets $ 30,440,046 $ 32,566,422 LIABILITIES AND EQUITY Total Liabilities $ - $ - Commitments and Contingencies Shareholders’ Equity Class A Ordinary Share (par value $0.0001 per share, 450,000,000 shares authorized; 20,531,423 and 19,453,423 shares issued and outstanding at December 31, 2022 and 2021, respectively) 2,054 1,946 Class B Ordinary Share (par value $0.0001 per share, 50,000,000 shares authorized; 5,497,715 and 5,497,715 shares issued and outstanding at December 31, 2022 and 2021, respectively) 550 550 Additional paid-in capital 24,998,388 22,986,975 Retained earnings 5,439,054 8,379,945 Accumulated comprehensive income - 1,197,006 Total Shareholders’ Equity 30,440,046 32,566,422 Total Liabilities and Shareholders’ Equity $ 30,440,046 $ 32,566,422 |
Schedule of parent company statements of operations and comprehensive (loss) Income | For the Years Ended 2022 2021 2020 Equity in (loss) gain of subsidiaries $ (2,919,423 ) $ 266,775 $ 4,470,613 General and administrative expenses (23,193 ) (32,273 ) (12,233 ) Interest income 1,725 4,163 - Net (Loss) Income $ (2,940,891 ) 238,665 4,458,380 |
Schedule of parent company statements of cash flows | For the Years Ended 2022 2021 2020 Cash Flows from Operating Activities: Net Cash Provided by (Used in) Operating Activities $ 139,309 $ 3,737 $ (700,873 ) Cash Flows from Investing Activities: Loans repaid from (made to) VIE and its subsidiaries (1,638,455 ) (3,400,000 ) (3,690,000 ) Net Cash Used in Investing Activities (1,638,455 ) (3,400,000 ) (3,690,000 ) Cash Flows from Financing Activities: Proceeds from issuance of common stocks in connection with initial public offering, net off issuance cost - - 11,497,654 Proceeds from issuance of common stocks in connection with direct offering, net off issuance cost 1,850,744 - - Net Cash Provided by Financing Activities 1,850,744 - 11,497,654 Net increase (decrease) in cash and cash equivalents 351,598 (3,396,263 ) 7,106,781 Cash and cash equivalents at beginning of year 3,758,618 7,154,881 48,100 Cash and cash equivalents at end of year $ 4,110,216 $ 3,758,618 $ 7,154,881 |
Organization and Principal Ac_3
Organization and Principal Activities (Details) ¥ in Millions, $ in Millions | 12 Months Ended | ||||||||
Aug. 14, 2019 | Dec. 31, 2022 shares | Dec. 31, 2021 shares | Sep. 10, 2021 | Nov. 30, 2020 | Aug. 01, 2020 | Dec. 02, 2019 USD ($) | Dec. 02, 2019 CNY (¥) | Aug. 15, 2019 shares | |
Organization and Principal Activities (Details) [Line Items] | |||||||||
Shares issued (in Shares) | 1,350,068 | ||||||||
Purchased remaining shares (in Shares) | 675,000 | ||||||||
Percentage of economic beneficial interest | 5.19% | ||||||||
Ownership voting percentage | 1.31% | ||||||||
Amount of paid-in capital of HF capital | $ 2.9 | ¥ 20 | |||||||
Initial equity interest pledge agreement term | 20 years | ||||||||
Service fees percentage | 100% | ||||||||
Shanghai Zhongxun [Member] | |||||||||
Organization and Principal Activities (Details) [Line Items] | |||||||||
Equity interest percentage | 93.33% | 100% | 51% | ||||||
Mr. Weiguang Yang [Member] | |||||||||
Organization and Principal Activities (Details) [Line Items] | |||||||||
Equity interest percentage | 6.67% | 19% | |||||||
Beijing Zhongchao Yixin Management Consulting Partnership [Member] | |||||||||
Organization and Principal Activities (Details) [Line Items] | |||||||||
Equity interest percentage | 20% | ||||||||
LLP (“Zhongchao Yixin”), and Beijing Zhongren Yixin Management Consulting [Member] | |||||||||
Organization and Principal Activities (Details) [Line Items] | |||||||||
Equity interest percentage | 10% | ||||||||
West Angel [Member] | |||||||||
Organization and Principal Activities (Details) [Line Items] | |||||||||
Equity interest percentage | 60% | ||||||||
Zhongchao Shanghai [Member] | |||||||||
Organization and Principal Activities (Details) [Line Items] | |||||||||
Equity interest percentage | 100% | 6.25% | |||||||
Mr.Yang [Member] | |||||||||
Organization and Principal Activities (Details) [Line Items] | |||||||||
Equity interest percentage | 76.40% | ||||||||
Class A Ordinary Shares [Member] | |||||||||
Organization and Principal Activities (Details) [Line Items] | |||||||||
Capital to purchase shares (in Shares) | 1,350,068 | ||||||||
Ordinary shares would not be issued (in Shares) | 1,350,068 | 1,350,068 | |||||||
Ordinary shares outstanding (in Shares) | 1,350,068 | 1,350,068 | |||||||
Zhongchao Shanghai [Member] | |||||||||
Organization and Principal Activities (Details) [Line Items] | |||||||||
Shares issued (in Shares) | 675,068 |
Organization and Principal Ac_4
Organization and Principal Activities (Details) - Schedule of financial statements of Zhongchao Shanghai | 12 Months Ended |
Dec. 31, 2022 | |
Zhongchao Group Inc. ("Zhongchao BVI") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A BVI company |
Ownership | 100% owned by Zhongchao Cayman |
Zhongchao Group Inc. (“Zhongchao BVI”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on April 23, 2019 |
Zhongchao Group Inc. (“Zhongchao BVI”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A holding company |
Zhongchao USA LLC (“Zhongchao USA”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A United States company |
Ownership | 100% owned by Zhongchao Cayman |
Zhongchao USA LLC (“Zhongchao USA”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on 3 September, 2020 |
Zhongchao USA LLC (“Zhongchao USA”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology (no medical diagnosis and treatment activities allowed). |
Zhongchao Japan (“Zhongchao Japan”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A Japan company |
Ownership | 100% owned by Zhongchao USA since December 2021. Before December 2021, 10% owned by Zhongchao USA and 90% owned by Mr. Weiguang Yang |
Zhongchao Japan (“Zhongchao Japan”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on 1 October, 2020 |
Zhongchao Japan (“Zhongchao Japan”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology (no medical diagnosis and treatment activities allowed). |
Zhongchao Group Limited ("Zhongchao HK") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A Hong Kong company |
Ownership | 100% owned by Zhongchao BVI |
Zhongchao Group Limited (“Zhongchao HK”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on May 14, 2019 |
Zhongchao Group Limited (“Zhongchao HK”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A holding company |
Beijing Zhongchao Zhongxing Technology Limited ("Zhongchao WFOE") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC company and deemed a wholly foreign owned enterprise |
Ownership | 100% owned by Zhongchao HK |
Beijing Zhongchao Zhongxing Technology Limited (“Zhongchao WFOE”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on May 29, 2019 |
Beijing Zhongchao Zhongxing Technology Limited (“Zhongchao WFOE”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A holding company |
Zhongchao Shanghai [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | VIE of Beijing Zhongchao Zhongxing Technology Limited |
Zhongchao Shanghai One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on August 17, 2012 |
Zhongchao Shanghai Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in technology development, technology transfer, and technical services in the field of medical technology, technical consulting in the field of network technology, and medical information consulting |
Shanghai Maidemu Cultural Communication Corp. ("Shanghai Maidemu") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 100% owned by Zhongchao Shanghai |
Shanghai Maidemu Cultural Communication Corp. (“Shanghai Maidemu”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on March 12, 2015 |
Shanghai Maidemu Cultural Communication Corp. (“Shanghai Maidemu”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Planning for cultural and artistic exchanges, designing, producing, acting for and publishing various kinds of advertisements, and medical consultation (no medical diagnosis and treatment activities allowed). |
Shanghai Huijing Information Technology Co., Ltd., ("Shanghai Huijing") [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 100% owned by Shanghai Maidemu |
Shanghai Huijing Information Technology Co., Ltd., (“Shanghai Huijing”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on September 28, 2016 |
Shanghai Huijing Information Technology Co., Ltd., (“Shanghai Huijing”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in technology development, transfer, service and consulting in the fields of computer technology, graphic designing, website page designing, planning cultural and artistic exchanges. |
Shanghai Zhongxun Medical Technology Co., Ltd. (“Shanghai Zhongxun”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 100% owned by Zhongchao Shanghai |
Shanghai Zhongxun Medical Technology Co., Ltd. (“Shanghai Zhongxun”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on May 27, 2017 |
Shanghai Zhongxun Medical Technology Co., Ltd. (“Shanghai Zhongxun”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology (no medical diagnosis and treatment activities allowed). |
Shanghai Zhongxin Medical Technology Co., Ltd (“Shanghai Zhongxin”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 93.33% owned by Shanghai Zhongxun* |
Shanghai Zhongxin Medical Technology Co., Ltd (“Shanghai Zhongxin”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on October 10, 2018 |
Shanghai Zhongxin Medical Technology Co., Ltd (“Shanghai Zhongxin”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. |
Beijing Zhongchao Boya Medical Technology Co., Ltd. (“Beijing Boya”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 70% owned by Zhongchao Shanghai, and 30% owned by Mr. Zhengbo Ma on behalf of Zhongchao Shangha before December 8, 2021, and 30% owned by Shanghai Lingzhong Enterprise Management LLP on behalf of Zhongchao Shanghai after December 8, 2021 |
Beijing Zhongchao Boya Medical Technology Co., Ltd. (“Beijing Boya”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on April 27, 2020 |
Beijing Zhongchao Boya Medical Technology Co., Ltd. (“Beijing Boya”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. |
Hainan Zhongteng Medical Technology Co., Ltd. (“Hainan Zhongteng”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 100% owned by Beijing Boya |
Hainan Zhongteng Medical Technology Co., Ltd. (“Hainan Zhongteng”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on July 16, 2021 |
Hainan Zhongteng Medical Technology Co., Ltd. (“Hainan Zhongteng”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. |
Zhixun Internet Hospital (Liaoning) Co., Ltd. (“Liaoning Zhixun”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 100% owned by Beijing Boya |
Zhixun Internet Hospital (Liaoning) Co., Ltd. (“Liaoning Zhixun”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on July 6, 2020 |
Zhixun Internet Hospital (Liaoning) Co., Ltd. (“Liaoning Zhixun”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in online hospital services, medical services, elderly nursing services, remote healthcare management services, healthcare consulting services, sales of medical appliances and other medical products. |
Shanghai Xinyuan Human Resources Co., Ltd. (“Shanghai Xinyuan”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 100% owned by Shanghai Zhongxin |
Shanghai Xinyuan Human Resources Co., Ltd. (“Shanghai Xinyuan”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on January 13, 2021 |
Shanghai Xinyuan Human Resources Co., Ltd. (“Shanghai Xinyuan”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. |
Hainan Muxin Medical Technology Co., Ltd. (“Hainan Muxin”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 100% owned by Shanghai Zhongxin |
Hainan Muxin Medical Technology Co., Ltd. (“Hainan Muxin”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on July 21, 2021 |
Hainan Muxin Medical Technology Co., Ltd. (“Hainan Muxin”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in technology development, transfer, service and consulting in the fields of medical technology and computer technology, market information consulting and investigating. |
Ningxia Zhongxin Internet Hospital Co., Ltd. (“Ningxia Zhongxin”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 100% owned by Shanghai Zhongxin |
Ningxia Zhongxin Internet Hospital Co., Ltd. (“Ningxia Zhongxin”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on May 18, 2021 and cancelled on September 1, 2022 |
Ningxia Zhongxin Internet Hospital Co., Ltd. (“Ningxia Zhongxin”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in online hospital operation, provide online medical service, online consultation, prescription information services, and medication retails. |
Chongqing Xinjiang Pharmaceutical Co., Ltd. (“Chongqing Xinjiang”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 100% owned by Shanghai Zhongxun |
Chongqing Xinjiang Pharmaceutical Co., Ltd. (“Chongqing Xinjiang”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on January 18, 2022 |
Chongqing Xinjiang Pharmaceutical Co., Ltd. (“Chongqing Xinjiang”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Engaged in trading of patented drugs |
Beijing Yisuizhen Technology Co., Ltd. (“Beijing Yisuizhen”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 100% owned by Hainan Muxin |
Beijing Yisuizhen Technology Co., Ltd. (“Beijing Yisuizhen”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on November 8, 2021 |
Beijing Yisuizhen Technology Co., Ltd. (“Beijing Yisuizhen”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Acquired by the Company on August 31, 2022 |
Beijing Yisuizhen Technology Co., Ltd. (“Beijing Yisuizhen”) Three [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Provision of online platform for communication between hospitals and patients |
West Angel (Beijing) Health Technology Co., Ltd. (“West Angel”) [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | A PRC limited liability company |
Ownership | 60% owned by Beijing Yisuizhen |
West Angel (Beijing) Health Technology Co., Ltd. (“West Angel”) One [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Incorporated on July 1, 2003 |
West Angel (Beijing) Health Technology Co., Ltd. (“West Angel”) Two [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Acquired by the Company on August 31, 2022 |
West Angel (Beijing) Health Technology Co., Ltd. (“West Angel”) Three [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Background | Provision of online platform for communication between hospitals and patients |
Organization and Principal Ac_5
Organization and Principal Activities (Details) - Schedule of financial statements is reconciled - Class A Ordinary Shares [Member] - shares | Dec. 31, 2022 | Dec. 31, 2021 |
Organization and Principal Activities (Details) - Schedule of financial statements is reconciled [Line Items] | ||
Number of Class A Ordinary Shares legally issued and outstanding | 19,181,355 | 18,103,355 |
Class A Ordinary Shares committed to be issued to HF Capital | 1,350,068 | 1,350,068 |
Number of Class A Ordinary Shares outstanding and issued presented on the financial statements | 20,531,423 | 19,453,423 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 CNY (¥) | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Minority equity interest | 40% | |||
Accounts receivable | $ 753,447 | $ 1,449,827 | $ 336,367 | |
Written off | 543,315 | 1,449,827 | $ 336,367 | |
Doubtful accounts | $ 207,269 | |||
Depreciation | 5% | 5% | ||
Amortization period | 1 year | |||
Other revenues percentage | 0.30% | 1.20% | 0% | |
Employee benefits | $ 817,345 | $ 804,730 | $ 310,637 | |
Research and development costs | 411,524 | 758,878 | 816,553 | |
Advertising expenses | $ 989,900 | $ 2,204,233 | $ 2,851,648 | |
Value added tax | 6% | 6% | ||
Sale of product | 13% | |||
Amount of tax benefit | 50% | |||
Cash and cash equivalents | $ 4,709,310 | |||
Deposited in financial institutions | 4,700,379 | |||
Bank account | 72,500 | ¥ 500,000 | ||
Federal deposit insurance corporation | 250,000 | |||
Cash balance | $ 1,538,404 | |||
Minimum [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Minority equity interest | 3% | |||
Straight-line basis term | 16 years | 16 years | ||
Maximum [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Minority equity interest | 5% | |||
Straight-line basis term | 32 years | 32 years | ||
Credit Risk [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Cash and cash equivalents | $ 11,520,453 | |||
Zhongxin [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Minority equity interest | 6.67% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of exchange rates | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of exchange rates [Abstract] | |||
Balance sheet items, except for equity accounts | 6.8972 | 6.3726 | |
Items in the statements of operations and comprehensive (loss) income, and statements of cash flows | 6.7290 | 6.4508 | 6.9020 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment | 12 Months Ended |
Dec. 31, 2022 | |
Land and buildings [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment [Line Items] | |
Property and equipment | 7 years |
Land and buildings [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment [Line Items] | |
Property and equipment | 21 years |
Office equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment [Line Items] | |
Property and equipment | 3 years |
Vehicle [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment [Line Items] | |
Property and equipment | 4 years |
Leasehold improvements [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment [Line Items] | |
Property and equipment | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of amortized over their estimated useful lives | 12 Months Ended |
Dec. 31, 2022 | |
Trademarks [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortized estimated useful lives | 10 years |
License [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortized estimated useful lives | 10 years |
Software [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortized estimated useful lives | 3 years |
Software [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Amortized estimated useful lives | 10 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of disaggregation of our revenue - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of disaggregation of our revenue [Abstract] | |||
Medical training and education services | $ 6,604,487 | $ 8,754,120 | $ 10,543,852 |
Patient management services in patient-aid projects | 6,288,602 | 7,343,343 | 7,445,936 |
Sales of patented drugs | 1,216,096 | ||
Other revenues | 42,331 | 199,307 | |
Total | $ 14,151,516 | $ 16,296,770 | $ 17,989,788 |
Variable Interest Entities an_3
Variable Interest Entities and Other Consolidation Matters (Details) - Schedule of consolidated financial statements - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
ASSETS | ||||
Cash and cash equivalents | $ 4,500,379 | $ 7,117,728 | ||
Accounts receivable | 6,772,988 | 9,218,883 | ||
Inventories | 189,106 | |||
Other current assets | 1,840,182 | 2,029,794 | ||
Investment in a limited partnership and an equity investee | 1,179,300 | 1,993,285 | ||
Property and equipment, net | 3,111,717 | 3,168,441 | ||
Goodwill | 5,767,504 | |||
Right of use assets | 1,666,777 | 205,824 | ||
Deferred tax assets | 1,800,493 | 2,025,043 | ||
Other noncurrent assets | 1,456,322 | 414,105 | ||
Total Assets | 28,284,768 | 26,173,103 | ||
LIABILITIES | ||||
Advances from customers | 395,263 | 7,432 | ||
Income tax payable | 2,292,765 | 2,478,273 | ||
Operating lease liabilities, current and non-current | 1,702,478 | 201,559 | ||
Due to Zhongchao Inc. | [1] | 762,962 | 599,347 | |
Other current liabilities | 992,558 | 1,011,371 | ||
Deferred tax liabilities | 208,200 | |||
Total Liabilities | 6,354,226 | 4,297,982 | ||
Revenues | 14,151,516 | 16,096,769 | $ 17,989,788 | |
(Loss) Income from Operations | (1,716,154) | 418,235 | 4,525,855 | |
Net (Loss) Income | $ (1,427,296) | $ 838,838 | $ 4,484,029 | |
[1] The balances due from/to Zhongchao Inc., are eliminated on consolidation. |
Acquisition of Beijing Yisuiz_3
Acquisition of Beijing Yisuizhen and its Subsidiary (Details) | 1 Months Ended | 12 Months Ended | ||||||
Aug. 31, 2022 USD ($) | Aug. 31, 2022 CNY (¥) | Feb. 28, 2022 CNY (¥) | Nov. 30, 2021 USD ($) | Nov. 30, 2021 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 CNY (¥) | |
Acquisition of Beijing Yisuizhen and its Subsidiary (Details) [Line Items] | ||||||||
Capital contribution | $ 708,129 | ¥ 4,568,000 | ||||||
Cash consideration | $ 3,100,000 | ¥ 20,600,000 | ¥ 25,000,000 | $ 148,610 | ¥ 1,000,000 | |||
Share consideration percentage | 6.67% | 6.67% | 6.67% | |||||
Estimated useful life | 3 years | 3 years | ||||||
Equity interests (in Dollars) | $ 850 | |||||||
Granted percentage | 6.67% | 6.67% | ||||||
Fair value amount | $ 393,816 | ¥ 2,713,000 | ||||||
Beijing Yisuizhen [Member] | ||||||||
Acquisition of Beijing Yisuizhen and its Subsidiary (Details) [Line Items] | ||||||||
Equity interest rate | 60% | 47% | 47% | |||||
Beijing Yisuizhen and Beijing Yisuizhen [Member] | ||||||||
Acquisition of Beijing Yisuizhen and its Subsidiary (Details) [Line Items] | ||||||||
Equity interest rate | 100% | 100% |
Acquisition of Beijing Yisuiz_4
Acquisition of Beijing Yisuizhen and its Subsidiary (Details) - Schedule of allocation of the purchase price as of the date of acquisition - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Schedule of Allocation Purchase Acquisition [Abstract] | |||
Net assets deficit assumed | [1] | $ (60,092) | |
Software acquired in business combination | [2] | 1,000,406 | |
Goodwill | 5,767,504 | ||
Deferred tax liabilities | (234,225) | ||
Non-controlling interest | [3] | (2,585,087) | |
Foreign currency adjustments | 120,261 | ||
Total | 4,008,767 | ||
Total purchase price is comprised of | |||
Cash consideration | 3,055,432 | ||
Fair value of previously held equity interests | [4] | 708,129 | |
Fair value of 6.67% equity interest in Zhongxin | [5] | 393,816 | |
Less: cash from transfer of fair value of 6.67% equity interest in Zhongxin (v) | [5] | (148,610) | |
Total | $ 4,008,767 | ||
[1]Net asset deficit assumed primarily included other current liabilities for operating expenses.[2]Software acquired in the business combination had estimated useful life of 3 years.[3]Fair value of the noncontrolling interests was estimated with reference to the market price per share as of the acquisition date.[4]A gain of $850 in relation to the revaluation of the previously held equity interests was recorded in other income, net in the consolidated statements of operations and comprehensive (loss) income for the year ended December 31, 2022. The fair value of the previously held equity interests approximated the cost of investments as Beijing Yisuizhen has not commenced operations since its setup.[5]In exchange for the equity interest in Beijing Yisuizhen and West Angel, the Company also granted 6.67% equity interest in Shanghai Zhongxin, with fair value of $393,816 (RMB 2,713,000), to four shareholders of West Angel at cash consideration of $148,610 (RMB 1,000,000). The Company engaged a third party valuation team to estimate the fair value of equity interest of Shanghai Zhongxin. As of December 31, 2022, the four shareholders paid the cash consideration to Mr. Yang, the Chief Executive Officer of the Company. The Company recorded the outstanding balance in the account of due from related parties (Note 16). |
Short-Term Investments (Details
Short-Term Investments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Short-term Investments [Abstract] | |||
Loss on short-term investment | $ 240,489 | $ 58,403 | $ 10,331 |
Other Current Assets (Details)
Other Current Assets (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Other Current Assets [Abstract] | |
Cash consideration | $ 1,323,308 |
Third party paid | $ 1,112,440 |
Other Current Assets (Details)
Other Current Assets (Details) - Schedule of other current assets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Other Current Assets [Abstract] | |||
Due from a third party | [1] | $ 205,726 | |
Office rental deposit | 128,194 | 203,896 | |
Interest receivable | 88,720 | 78,950 | |
Prepaid rental fees | 803 | 45,607 | |
Others | 69,597 | 47,256 | |
Total | $ 493,040 | $ 375,709 | |
[1] During the year ended December 31, 2022, the Company sold one of its properties to a third party at cash consideration of $1,323,308 (Note 8), among which the third party paid $1,112,440. The Company recorded the remaining balance as “due from a third party” in the account of other current assets. |
Loans Receivable (Details)
Loans Receivable (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | |
Loans Receivable (Details) [Line Items] | |||
Total amount | $ 775,098 | ¥ 5,000,000 | |
Collected amount | $ 150,000 | ||
Borrower A [Member] | |||
Loans Receivable (Details) [Line Items] | |||
Loans amount | 1,038,631 | 6,700,000 | |
Borrower B [Member] | |||
Loans Receivable (Details) [Line Items] | |||
Loans amount | 197,470 | 1,273,840 | |
Borrower C [Member] | |||
Loans Receivable (Details) [Line Items] | |||
Loans amount | 399,110 | ¥ 2,574,580 | |
Borrower D [Member] | |||
Loans Receivable (Details) [Line Items] | |||
Loans amount | 1,890,000 | ||
Collected amount | 300,000 | ||
Loans collected amount | 1,590,000 | ||
Borrower E [Member] | |||
Loans Receivable (Details) [Line Items] | |||
Loans amount | 200,000 | $ 200,000 | |
Loans collected amount | $ 250,000 |
Loans Receivable (Details) - Sc
Loans Receivable (Details) - Schedule of loans receivable - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Loans Receivable (Details) - Schedule of loans receivable [Line Items] | ||
Total loans receivable | $ 1,840,000 | $ 2,660,668 |
Borrower A [Member] | ||
Loans Receivable (Details) - Schedule of loans receivable [Line Items] | ||
Total loans receivable | 266,767 | |
Borrower B [Member] | ||
Loans Receivable (Details) - Schedule of loans receivable [Line Items] | ||
Total loans receivable | 199,893 | |
Borrower C [Member] | ||
Loans Receivable (Details) - Schedule of loans receivable [Line Items] | ||
Total loans receivable | 404,008 | |
Borrower D [Member] | ||
Loans Receivable (Details) - Schedule of loans receivable [Line Items] | ||
Total loans receivable | 1,590,000 | 1,590,000 |
Borrower E [Member] | ||
Loans Receivable (Details) - Schedule of loans receivable [Line Items] | ||
Total loans receivable | $ 250,000 | $ 200,000 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expenses | $ 241,842 | $ 312,898 | $ 176,111 | |
Building with original amount | $ 1,397,317 | |||
Sale of property | $ 1,323,308 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of property and equipment, net - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (379,879) | $ (636,239) |
Property, plant and equipment gross | 3,890,947 | 3,923,086 |
Land and buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment net | 4,105,956 | 4,063,587 |
Office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment net | 79,082 | 460,525 |
Vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment net | 32,535 | 35,213 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment net | $ 53,253 |
Prepayments for Lease of Land_2
Prepayments for Lease of Land (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Prepayments for Lease of Land [Abstract] | |||
Amortization expenses | $ 22,226 | $ 23,185 | $ 21,670 |
Prepayments for Lease of Land_3
Prepayments for Lease of Land (Details) - Schedule of prepayments for lease of land - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Prepayments For Lease Of Land [Abstract] | ||
Prepayments for lease of land | $ 401,031 | $ 434,045 |
Less: accumulated amortization | (96,244) | (80,698) |
Total | $ 304,787 | $ 353,347 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 119,218 | $ 5,525 | $ 4,544 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of intangible assets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets, Net (Details) - Schedule of intangible assets [Line Items] | ||
Intangible assets, net | $ 912,054 | $ 30,259 |
Less: accumulated amortization | (140,951) | (26,671) |
Software [Member] | ||
Intangible Assets, Net (Details) - Schedule of intangible assets [Line Items] | ||
Intangible assets, net | 1,041,872 | 44,880 |
Trademark and License [Member] | ||
Intangible Assets, Net (Details) - Schedule of intangible assets [Line Items] | ||
Intangible assets, net | $ 11,133 | $ 12,050 |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details) - Schedule of amortization of intangible assets | Dec. 31, 2022 USD ($) |
Schedule of Amortization Of Intangible Assets [Abstract] | |
For the year ended December 31, 2023 | $ 338,636 |
For the year ended December 31, 2024 | 338,636 |
For the year ended December 31, 2025 | 227,492 |
For the year ended December 31, 2026 | 5,105 |
For the year ended December 31, 2027 | 2,185 |
Total amortization | $ 912,054 |
Investments in Equity Method _3
Investments in Equity Method Investees (Details) - USD ($) | 12 Months Ended | |||||
Nov. 08, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 31, 2022 | Nov. 05, 2020 | |
Investments in Equity Method Investees (Details) [Line Items] | ||||||
Investment amount | $ 1,217,039 | |||||
Partnership interest percentage | 28% | |||||
Investment loss | $ 80 | $ 13,758 | $ 25,622 | |||
Investors and acquired percentage | 47% | |||||
Cash consideration | $ 708,129 | |||||
Hainan Muxin [Member] | ||||||
Investments in Equity Method Investees (Details) [Line Items] | ||||||
Equity interest rate | 53% |
Investments in Equity Method _4
Investments in Equity Method Investees (Details) - Schedule of investments in equity investments - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Ningbo Meishan Xinaishan Equity Investment Limited Partnership (“limited partnership”) | [1] | $ 1,179,300 | $ 1,276,466 |
Total | 1,179,300 | 1,993,285 | |
Beijing Yisuizhen [Member] | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Beijing Easy Clinic Technology Co., Ltd. (“Easy Clinic”) | [2] | $ 716,819 | |
[1] On November 5, 2020, the Company entered into a five-year partnership agreement to invest $1,217,039, for 28% partnership interest in the limited partnership. The funds raised by the limited partnership are invested in one PRC private company engaged in immunotherapy. For the years ended December 31, 2022, 2021 and 2020, equity investment loss of $80, $13,758 and $25,622 have been recorded in other income, net for the Company’s share of the operating loss of the limited partnership. As of December 31, 2022 and 2021, no significant impairment indicators have been noted in connection with the investment. |
Investment in an Equity Secur_2
Investment in an Equity Security (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | ||
Investment amount | $ 150,000 | |
Investee percentage | 0.60% | |
Downward adjustments | $ 65,394 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - Schedule of accrued expenses and other current liabilities - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Accrued Expenses And Other Current Liabilities [Abstract] | ||
Other tax payable | $ 379,712 | $ 616,356 |
Accrued payroll | 296,866 | 301,260 |
Customer deposits payable | 83,367 | |
Other current liabilities | 95,595 | 57,185 |
Accrued expenses and other current liabilities | $ 855,540 | $ 974,801 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities (Details) - Schedule of other tax payables - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of Other Tax Payables [Abstract] | ||
Value added tax payable | $ 354,794 | $ 579,516 |
Local taxes payable | 24,918 | 36,840 |
Other tax payables | $ 379,712 | $ 616,356 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jan. 01, 2021 | Sep. 30, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes (Details) [Line Items] | |||||
Applicable tax rate, description | The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. Before that, the applicable tax rate was 16.5% for corporations in Hong Kong. | ||||
Subject to a federal tax rate | 21% | ||||
Income tax rate percentage | 30% | 30% | 30% | ||
EIR rate | 25% | 25% | |||
EIT rate | 10% | ||||
Income tax rate | 12.50% | ||||
Enterprise income tax percentage | 25% | ||||
Enterprise income tax description | SMEs are entitled to a reduced EIT rate of a reduced EIT rate of 20%, 87.5% reduction of taxable income for the first RMB1,000,000 taxable income and 75% reduction of taxable income between RMB 1,000,000 and RMB 3,000,000, and no reduction for the remaining taxable income for the year ended December 31, 2022; 87.5% reduction of taxable income for the first RMB1,000,000 taxable income and 50% reduction of taxable income between RMB 1,000,000 and RMB 3,000,000, and no reduction for the remaining taxable income for the year ended December 31, 2021; and 75% reduction of taxable income for the first RMB1,000,000 taxable income and 50% reduction of taxable income between RMB 1,000,000 and RMB 3,000,000, and no reduction for the remaining taxable income for the years ended before December 31, 2020. | ||||
Research and development expenses percentage | 175% | ||||
Net operating loss carryforwards (in Dollars) | $ 7,166,560 | $ 4,435,381 | |||
Net operating loss carryforwards description | The Company also has net operating loss carryforwards from PRC of $5,653,804 which expire starting in 2025 through 2027. | ||||
Valuation allowance (in Dollars) | $ 339,495 | ||||
Corporate taxpayers benefit percentage | 50% | ||||
Foreign income percentage | 10.50% | ||||
Hainan Province [Member] | |||||
Income Taxes (Details) [Line Items] | |||||
EIT rate | 15% | ||||
Unite States and Hong Kong [Member] | |||||
Income Taxes (Details) [Line Items] | |||||
Net operating loss carryforwards (in Dollars) | $ 1,512,756 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of components of (loss) profit before income tax benefits (expenses) are summarized - USD ($) | Dec. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2019 |
Income Taxes (Details) - Schedule of components of (loss) profit before income tax benefits (expenses) are summarized [Line Items] | |||
Total | $ (2,550,006) | $ (110,753) | $ 4,941,884 |
PRC [Member] | |||
Income Taxes (Details) - Schedule of components of (loss) profit before income tax benefits (expenses) are summarized [Line Items] | |||
Total | (1,243,361) | 631,917 | 4,976,484 |
Non-PRC [Member] | |||
Income Taxes (Details) - Schedule of components of (loss) profit before income tax benefits (expenses) are summarized [Line Items] | |||
Total | $ (1,306,645) | $ (742,670) | $ (34,600) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of income tax expenses - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Income Tax Expenses [Abstract] | |||
Current income tax expenses | $ (138,188) | $ (997,198) | $ (543,211) |
Deferred income tax benefits | (134,125) | 1,346,616 | 58,424 |
Income tax benefits (expenses) | $ (272,313) | $ 349,418 | $ (484,787) |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of reconciliation of statutory tax rate to effective tax rate | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Reconciliation Of Statutory Tax Rate To Effective Tax Rate [Abstract] | |||
PRC statutory income tax rate | 25% | 25% | 25% |
Effect of different income tax rates in other jurisdictions | (2.11%) | (34.11%) | 0% |
Effect of preferential tax benefits | 12.72% | 167.36% | (13.96%) |
Effect of non-deductible expenses | (1.22%) | (54.84%) | 0.35% |
Effect of research and development credits | 3.06% | 104.55% | (1.47%) |
Effect of deferred tax rate change | (34.22%) | 107.53% | 0% |
Effect of changes in valuation allowance | (13.91%) | 0% | 0% |
Effective tax rate | (10.68%) | 315.49% | 9.81% |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of deferred tax assets - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred tax assets: | ||
Excess advertising expense | $ 842,295 | $ 911,799 |
Deferred Intangible assets amortization | 25,790 | 33,590 |
Net operating loss carrying forward | 1,052,209 | 1,079,962 |
Share-based compensation | 178,764 | 156,928 |
Doubtful allowance against accounts receivable | 51,817 | |
Changes in fair value of short-term investments | 50,502 | |
Downward adjustments in investments in an equity security | 13,733 | |
Lease liabilities | 71,024 | 31,615 |
Less: Deferred tax liability - Right of use assets | (81,910) | (37,184) |
Less: Valuation allowance on deferred tax assets | (339,495) | |
Deferred tax assets, net | 1,864,729 | 2,176,710 |
Deferred tax liability | ||
Software acquired in business combination | 208,200 | |
Deferred tax liability | $ 208,200 |
(Loss) Earnings Per Share (Deta
(Loss) Earnings Per Share (Details) | Aug. 14, 2019 shares |
Class A Ordinary Share [Member] | |
(Loss) Earnings Per Share (Details) [Line Items] | |
Stock issued | 1,350,068 |
(Loss) Earnings Per Share (De_2
(Loss) Earnings Per Share (Details) - Schedule of basic and diluted loss per ordinary share - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Basic And Diluted Loss Per Ordinary Share [Abstract] | |||
Net (Loss) Income Attributable to Zhongchao Inc.’s shareholders | $ (2,940,891) | $ 238,665 | $ 4,458,380 |
Weighted average number of ordinary share outstanding | |||
Weighted average number of ordinary share outstanding, basic | 25,997,757 | 24,938,513 | 24,425,637 |
(Loss) Earnings per share | |||
(Loss) Earnings per share, basic | $ (0.113) | $ 0.01 | $ 0.183 |
(Loss) Earnings Per Share (De_3
(Loss) Earnings Per Share (Details) - Schedule of basic and diluted loss per ordinary share (Parentheticals) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Basic And Diluted Loss Per Ordinary Share [Abstract] | |||
Weighted average number of ordinary share outstanding, diluted | 25,997,757 | 24,938,513 | 24,425,637 |
(Loss) Earnings per share, diluted | $ (0.113) | $ 0.010 | $ 0.183 |
Related Party Transactions an_3
Related Party Transactions and Balances (Details) | 1 Months Ended | 12 Months Ended |
Aug. 17, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Related Party Transactions and Balances (Details) [Line Items] | ||
Prepaid | $ 118,888 | |
Company balance | $ 144,986 | |
Former shareholders | 4 | |
Shanghai Zhongxin [Member] | ||
Related Party Transactions and Balances (Details) [Line Items] | ||
Equity interest | 6.67% | |
Beijing Yisuizhen [Member] | ||
Related Party Transactions and Balances (Details) [Line Items] | ||
Equity interest percentage | 47% | |
Beijing Yisuizhen [Member] | ||
Related Party Transactions and Balances (Details) [Line Items] | ||
Related party transaction balance | $ 392,305 | |
Mr. Yang Weiguang [Member] | ||
Related Party Transactions and Balances (Details) [Line Items] | ||
Company balance | $ 226,178 | |
Mr.Yang [Member] | ||
Related Party Transactions and Balances (Details) [Line Items] | ||
Company balance | $ 81,192 |
Related Party Transactions an_4
Related Party Transactions and Balances (Details) - Schedule of relationships with related parties | 12 Months Ended |
Dec. 31, 2022 | |
Yang Weiguang [Member] | |
Related Party Transactions and Balances (Details) - Schedule of relationships with related parties [Line Items] | |
Name | Yang Weiguang |
Relationship with the Company | Chairman of the Board, Chief Executive Officer |
Beijing Ougaini Trading Co., Ltd (“Beijing Ougaini”) [Member] | |
Related Party Transactions and Balances (Details) - Schedule of relationships with related parties [Line Items] | |
Name | Beijing Ougaini Trading Co., Ltd (“Beijing Ougaini”) |
Relationship with the Company | Controlled by an immediate family member of Mr. Yang Weiguang |
Beijing Yisuizhen [Member] | |
Related Party Transactions and Balances (Details) - Schedule of relationships with related parties [Line Items] | |
Name | Beijing Yisuizhen |
Relationship with the Company | The Company owned 47% and 100% equity interest before and after August 17, 2022, respectively |
Related Party Transactions an_5
Related Party Transactions and Balances (Details) - Schedule of purchase from a related party - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule Of Purchase From ARelated Party [Abstract] | |||
Beijing Ougaini | $ 19,696 |
Related Party Transactions an_6
Related Party Transactions and Balances (Details) - Schedule of the balances with related parties - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Prepayments | |||
Beijing Ougaini | $ 115,989 | ||
Due from related parties | |||
Yang Weiguang | [1] | 226,178 | |
Beijing Yisuizhen | [2] | 392,305 | |
Total | $ 226,178 | $ 392,305 | |
[1]As of December 31, 2022, the Company had a balance of $226,178 due from Mr. Yang Weiguang. The balance was comprised of the following: -A balance of $144,986 arising from transfer of 6.67% equity interest of Shanghai Zhongxin to four former shareholders of West Angel, who paid consideration to Mr. Yang. (Note 4) -A balance of $81,192 as tuition paid on behalf of to Mr. Yang. As of the date of this report, Mr. Yang has repaid the above outstanding balances to the Company.[2]As of December 31, 2021, the Company had a balance of $392,305 due from Beijing Yisuizhen, over which the Company owned 47% equity interest before August 17, 2022. The balance was a loan to the newly set up equity investee to support its working capital. The outstanding balance was repaid by Beijing Yisuizhen before business combination with the Company. |
Equity (Details)
Equity (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||||
Oct. 10, 2022 | Jan. 06, 2022 | Sep. 13, 2021 | Jul. 13, 2020 | Feb. 26, 2020 | Dec. 17, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 14, 2019 | Apr. 16, 2019 | |
Equity (Details) [Line Items] | |||||||||||
Ordinary share authorized (in Shares) | 500,000,000 | ||||||||||
Ordinary share par value (in Dollars per share) | $ 0.0001 | ||||||||||
Ordinary share stock issued (in Shares) | 1,350,068 | ||||||||||
Ordinary shares, description | Holders of Class A Ordinary Shares and Class B Class A Ordinary Shares have the same rights except for voting and conversion rights. In respect of matters requiring a shareholder vote, each Class A Ordinary Share will be entitled to 1 vote and each Class B Ordinary Share will be entitled to 15 votes. | ||||||||||
Percentage of shares issued to shareholders | 6.25% | ||||||||||
Economic beneficial interest rate | 5.19% | ||||||||||
Ownership interest rate | 1.31% | ||||||||||
After-tax profits percentage | 10% | ||||||||||
Reserve funds percentage | 50% | ||||||||||
Accrued statutory reserve | $ 115,963 | $ 397,552 | $ 385,689 | ||||||||
Percentage of retained earnings | 10% | 10% | 10% | ||||||||
Statutory reserve funds | $ 1,315,017 | $ 1,199,054 | |||||||||
Net assets | $ 13,314,132 | $ 13,198,169 | |||||||||
Tax rate | 10% | ||||||||||
IPO [Member] | |||||||||||
Equity (Details) [Line Items] | |||||||||||
Gross proceeds | $ 13,260,000 | ||||||||||
Class A Ordinary Shares [Member] | |||||||||||
Equity (Details) [Line Items] | |||||||||||
Ordinary share authorized (in Shares) | 450,000,000 | 450,000,000 | |||||||||
Ordinary share par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Ordinary share stock issued (in Shares) | 1,350,068 | 14,752,352 | |||||||||
Gross proceeds | $ 1,908,000 | ||||||||||
Aggregate offering price | $ 10,400,000 | ||||||||||
Sale of ordinary shares (in Shares) | 1,060,000 | ||||||||||
Offering price per share (in Dollars per share) | $ 1.8 | ||||||||||
Aggregation shares (in Shares) | 18,000 | 18,000 | 18,000 | ||||||||
Class A Ordinary Shares [Member] | IPO [Member] | |||||||||||
Equity (Details) [Line Items] | |||||||||||
Ordinary share par value (in Dollars per share) | $ 0.0001 | ||||||||||
Ordinary share stock issued (in Shares) | 3,000,000 | ||||||||||
Per share (in Dollars per share) | $ 4 | ||||||||||
Class A Ordinary Shares [Member] | Over-Allotment Option [Member] | |||||||||||
Equity (Details) [Line Items] | |||||||||||
Per share (in Dollars per share) | $ 4 | ||||||||||
Purchase of additional shares (in Shares) | 315,000 | ||||||||||
Class B Ordinary Share [Member] | |||||||||||
Equity (Details) [Line Items] | |||||||||||
Ordinary share authorized (in Shares) | 50,000,000 | 50,000,000 | |||||||||
Ordinary share par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Ordinary share stock issued (in Shares) | 5,497,715 | 10,000 | |||||||||
VIE [Member] | |||||||||||
Equity (Details) [Line Items] | |||||||||||
Statutory reserve funds | $ 1,315,017 | $ 1,199,054 | |||||||||
Retained earnings | |||||||||||
Restricted net assets | $ 13,314,132 | $ 13,198,169 | |||||||||
Hong Kong [Member] | |||||||||||
Equity (Details) [Line Items] | |||||||||||
Tax rate | 5% |
Concentration Risk (Details)
Concentration Risk (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk (Details) [Line Items] | |||
Cost of revenue percentage | 10% | ||
Revenue [Member] | Customer A [Member] | |||
Concentration Risk (Details) [Line Items] | |||
Cost of revenue percentage | 15.90% | 23.40% | 26.90% |
Revenue [Member] | Customer B [Member] | |||
Concentration Risk (Details) [Line Items] | |||
Cost of revenue percentage | 21.90% | 19.70% | |
Revenue [Member] | Customer C [Member] | |||
Concentration Risk (Details) [Line Items] | |||
Cost of revenue percentage | 10.70% | ||
Customer A [Member] | |||
Concentration Risk (Details) [Line Items] | |||
Concentration risk percentage | 16.60% | 20.30% | |
Customer B [Member] | |||
Concentration Risk (Details) [Line Items] | |||
Concentration risk percentage | 0.60% | 12% | |
Customer C [Member] | |||
Concentration Risk (Details) [Line Items] | |||
Concentration risk percentage | 11.20% | ||
Customer D [Member] | |||
Concentration Risk (Details) [Line Items] | |||
Concentration risk percentage | 10.80% | ||
Supplier One [Member] | Revenue [Member] | |||
Concentration Risk (Details) [Line Items] | |||
Cost of revenue percentage | 22.90% | 16.40% | |
Supplier Two [Member] | Revenue [Member] | |||
Concentration Risk (Details) [Line Items] | |||
Cost of revenue percentage | 10.20% |
Share Based Compensation (Detai
Share Based Compensation (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 10, 2022 | Sep. 13, 2021 | May 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | ||||||
Restricted shares vested (in Shares) | 119,880 | 15,000 | 15,000 | |||
Restricted shares issued (in Shares) | 18,000 | 18,000 | ||||
Grant date value of restricted share units (in Dollars per share) | $ 1.16 | $ 1.64 | ||||
Fair value of restricted shares | $ 20,880 | $ 29,520 | ||||
Share-based compensation expenses | $ 160,777 | $ 211,832 | $ 168,350 | |||
share-based compensation expenses incurred | $ 363,670 | |||||
Weighted average period | 3 years 10 months 24 days |
Share Based Compensation (Det_2
Share Based Compensation (Details) - Schedule of unvested restricted share units - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Unvested Restricted Share Units [Abstract] | ||
Number of shares, Beginning balance, Unvested | 427,076 | 427,076 |
Weighted Average Grant-Date Fair Value, beginning balance , unvested | $ 2.53 | $ 2.54 |
Number of shares, Granted | 18,000 | 18,000 |
Weighted Average Grant-Date Fair Value, Granted | $ 1.16 | $ 1.64 |
Number of shares, Vested | (137,880) | (18,000) |
Weighted Average Grant-Date Fair Value, Vested | $ 2.37 | $ 1.77 |
Number of shares, Ending balance, Unvested | 307,196 | 427,076 |
Weighted Average Grant-Date Fair Value, ending balance , unvested | $ 2.52 | $ 2.53 |
Share Based Compensation (Det_3
Share Based Compensation (Details) - Schedule of share based compensation operating expenses - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Share Based Compensation Operating Expenses [Abstract] | |||
Selling and marketing expenses | $ 61,607 | $ 111,997 | $ 93,439 |
General and administrative expenses | 99,170 | 99,826 | 74,911 |
Total share-based compensation expenses | $ 160,777 | $ 211,823 | $ 168,350 |
Segment Reporting (Details)
Segment Reporting (Details) - segment | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting [Abstract] | ||
Number of Operating Segments | 2 | |
Number of Reportable Segments | 1 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of presents major accounts of statements of operations | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
MDMOOC Services [Member] | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |
Revenues | $ 12,935,420 |
Cost of revenues | (7,166,871) |
Total operating expenses | (9,153,373) |
Net Loss | (2,409,212) |
Sales of patented drugs [Member] | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |
Revenues | 1,216,096 |
Cost of revenues | (627,981) |
Total operating expenses | (157,753) |
Net Loss | (413,107) |
Total [Member] | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |
Revenues | 14,151,516 |
Cost of revenues | (7,794,852) |
Total operating expenses | (9,311,126) |
Net Loss | $ (2,822,319) |
Segment Reporting (Details) -_2
Segment Reporting (Details) - Schedule of geographical segments - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Total assets | ||
MDMOOC services | $ 37,183,491 | $ 36,267,420 |
Sales of patented drugs | 1,430,854 | |
Total | $ 38,614,345 | $ 36,267,420 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Weighted average remaining lease term | 1 year 9 months 25 days | 1 year 4 months 17 days | |
Operating leases discount rates | 4.75% | 4.75% | |
Rental expense | $ 498,166 | $ 426,152 | $ 312,675 |
Lease liabilities | $ 409,595 | $ 480,636 | $ 350,934 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of operating lease related assets and liabilities - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Operating Lease Related Assets And Liabilities [Abstract] | ||
Rights of use lease assets | $ 1,666,777 | $ 205,824 |
Operating lease liabilities, current | 480,633 | 88,968 |
Operating lease liabilities, noncurrent | 1,221,845 | 112,591 |
Total operating lease liabilities | $ 1,702,478 | $ 201,559 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of maturities of lease liabilities | Dec. 31, 2022 USD ($) |
Schedule of Maturities Of Lease Liabilities [Abstract] | |
2023 | $ 550,915 |
2024 | 324,647 |
2025 | 317,927 |
2026 | 317,980 |
2027 and thereafter | 397,475 |
Total lease payments | 1,908,944 |
Less: imputed interest | (206,466) |
Present value of lease liabilities | $ 1,702,478 |
Condensed financial informati_3
Condensed financial information of the parent company (Details) - Schedule of parent company balance sheet - Parent Company [Member] - Parent Company [Member] - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 4,110,216 | $ 3,758,618 |
Due from subsidiaries | 9,423,617 | 7,785,162 |
Investment in subsidiaries, VIE and VIE’s subsidiaries | 16,906,213 | 21,022,642 |
Total Assets | 30,440,046 | 32,566,422 |
LIABILITIES AND EQUITY | ||
Total Liabilities | ||
Commitments and Contingencies | ||
Shareholders’ Equity | ||
Class A Ordinary Share (par value $0.0001 per share, 450,000,000 shares authorized; 20,531,423 and 19,453,423 shares issued and outstanding at December 31, 2022 and 2021, respectively) | 2,054 | 1,946 |
Class B Ordinary Share (par value $0.0001 per share, 50,000,000 shares authorized; 5,497,715 and 5,497,715 shares issued and outstanding at December 31, 2022 and 2021, respectively) | 550 | 550 |
Additional paid-in capital | 24,998,388 | 22,986,975 |
Retained earnings | 5,439,054 | 8,379,945 |
Accumulated comprehensive income | 1,197,006 | |
Total Shareholders’ Equity | 30,440,046 | 32,566,422 |
Total Liabilities and Shareholders’ Equity | $ 30,440,046 | $ 32,566,422 |
Condensed financial informati_4
Condensed financial information of the parent company (Details) - Schedule of parent company balance sheet (Parentheticals) - Parent Company [Member] - Parent Company [Member] - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Class A Ordinary Shares [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Ordinary share par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary share authorized | 450,000,000 | 450,000,000 |
Ordinary share issued | 20,531,423 | 19,453,423 |
Ordinary share outstanding | 20,531,423 | 19,453,423 |
Class B Ordinary Shares [Member] | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Ordinary share par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary share authorized | 50,000,000 | 50,000,000 |
Ordinary share issued | 5,497,715 | 5,497,715 |
Ordinary share outstanding | 5,497,715 | 5,497,715 |
Condensed financial informati_5
Condensed financial information of the parent company (Details) - Schedule of parent company statements of operations and comprehensive (loss) Income - Parent Company [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Income Statements, Captions [Line Items] | |||
Equity in (loss) gain of subsidiaries | $ (2,919,423) | $ 266,775 | $ 4,470,613 |
General and administrative expenses | (23,193) | (32,273) | (12,233) |
Interest income | 1,725 | 4,163 | |
Net (Loss) Income | $ (2,940,891) | $ 238,665 | $ 4,458,380 |
Condensed financial informati_6
Condensed financial information of the parent company (Details) - Schedule of parent company statements of cash flows - Parent Company [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities: | |||
Net Cash Provided by (Used in) Operating Activities | $ 139,309 | $ 3,737 | $ (700,873) |
Cash Flows from Investing Activities: | |||
Loans repaid from (made to) VIE and its subsidiaries | (1,638,455) | (3,400,000) | (3,690,000) |
Net Cash Used in Investing Activities | (1,638,455) | (3,400,000) | (3,690,000) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of common stocks in connection with initial public offering, net off issuance cost | 11,497,654 | ||
Proceeds from issuance of common stocks in connection with direct offering, net off issuance cost | 1,850,744 | ||
Net Cash Provided by Financing Activities | 1,850,744 | 11,497,654 | |
Net increase (decrease) in cash and cash equivalents | 351,598 | (3,396,263) | 7,106,781 |
Cash and cash equivalents at beginning of year | 3,758,618 | 7,154,881 | 48,100 |
Cash and cash equivalents at end of year | $ 4,110,216 | $ 3,758,618 | $ 7,154,881 |