Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Document Information Line Items | |
Entity Registrant Name | Chanson International Holding |
Trading Symbol | CHSN |
Document Type | 20-F |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
Entity Central Index Key | 0001825349 |
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 | true |
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 | 001-41663 |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | No. 26 Culture Road |
Entity Address, Address Line Two | Tianshan District |
Entity Address, City or Town | Urumqi |
Entity Address, Country | CN |
Title of 12(b) Security | Class A Ordinary Shares |
Security Exchange Name | NASDAQ |
Entity Interactive Data Current | Yes |
Document Accounting Standard | U.S. GAAP |
Auditor Firm ID | 711 |
Auditor Name | Friedman LLP |
Auditor Location | New York |
Entity Address, Postal Zip Code | 000000 |
Business Contact [Member] | |
Document Information Line Items | |
Entity Address, Address Line One | No. 26 Culture Road |
Entity Address, Address Line Two | Tianshan District |
Entity Address, City or Town | Urumqi |
Entity Address, Country | CN |
City Area Code | +86 |
Local Phone Number | 0991-2302709 |
Contact Personnel Name | Jihong Cai |
Contact Personnel Email Address | jihong.cai@chansoninternational.com |
Entity Address, Postal Zip Code | 000000 |
Class A Ordinary Shares | |
Document Information Line Items | |
Entity Common Stock, Shares Outstanding | 3,060,000 |
Class B Ordinary Shares | |
Document Information Line Items | |
Entity Common Stock, Shares Outstanding | 5,940,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 2,915,470 | $ 3,896,812 |
Accounts receivable | 1,260,453 | 1,134,532 |
Inventories | 693,506 | 526,862 |
Deferred offering costs | 763,611 | 749,605 |
Prepaid expenses and other current assets | 833,238 | 438,045 |
TOTAL CURRENT ASSETS | 6,466,278 | 6,745,856 |
Operating lease right-of-use assets | 13,921,825 | 11,644,192 |
Property and equipment, net | 5,871,775 | 5,447,718 |
Long term security deposits | 958,320 | 1,066,027 |
Long term prepaid expenses | 110,988 | 92,301 |
TOTAL ASSETS | 27,329,186 | 24,996,094 |
CURRENT LIABILITIES: | ||
Short-term bank loans | 434,959 | 1,559,314 |
Accounts payable | 1,424,766 | 1,273,313 |
Due to a related party | 1,798,605 | 721,921 |
Taxes payable | 130,727 | 30,839 |
Deferred revenue | 6,958,160 | 6,051,683 |
Operating lease liabilities, current | 1,770,398 | 1,622,642 |
Other current liabilities | 1,014,452 | 1,055,199 |
TOTAL CURRENT LIABILITIES | 13,532,067 | 12,314,911 |
Operating lease liabilities, non-current | 12,620,070 | 9,846,224 |
TOTAL LIABILITIES | 26,152,137 | 22,161,135 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ EQUITY | ||
Ordinary shares, $0.001 par value, 50,000,000 shares authorized; 9,000,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively: | ||
Class A ordinary share, $0.001 par value, 44,000,000 shares authorized; 3,060,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 3,060 | 3,060 |
Class B ordinary share, $0.001 par value, 6,000,000 shares authorized; 5,940,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 5,940 | 5,940 |
Additional paid-in capital | 869,400 | 869,400 |
Statutory reserve | 447,231 | 447,231 |
Retained earnings (Accumulated deficit) | (183,842) | 1,104,363 |
Accumulated other comprehensive income | 35,260 | 404,965 |
TOTAL SHAREHOLDERS’ EQUITY | 1,177,049 | 2,834,959 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 27,329,186 | $ 24,996,094 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Ordinary shares, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 |
Ordinary shares, shares issued | 9,000,000 | 9,000,000 |
Ordinary shares, shares outstanding | 9,000,000 | 9,000,000 |
Class A Ordinary Shares | ||
Ordinary shares, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 44,000,000 | 44,000,000 |
Ordinary shares, shares issued | 3,060,000 | 3,060,000 |
Ordinary shares, shares outstanding | 3,060,000 | 3,060,000 |
Class B Ordinary Shares | ||
Ordinary shares, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 6,000,000 | 6,000,000 |
Ordinary shares, shares issued | 5,940,000 | 5,940,000 |
Ordinary shares, shares outstanding | 5,940,000 | 5,940,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||||
Income Statement [Abstract] | ||||||
REVENUE | $ 13,272,075 | $ 14,690,295 | $ 10,313,512 | |||
COST OF REVENUE | 7,169,404 | 7,759,872 | 5,164,178 | |||
GROSS PROFIT | 6,102,671 | 6,930,423 | 5,149,334 | |||
OPERATING EXPENSES | ||||||
Selling expenses | 3,697,909 | 4,126,126 | 2,947,088 | |||
General and administrative expenses | 3,842,787 | 3,249,181 | 2,230,893 | |||
Total operating expenses | 7,540,696 | 7,375,307 | 5,177,981 | |||
LOSS FROM OPERATIONS | (1,438,025) | (444,884) | (28,647) | |||
OTHER INCOME (EXPENSE) | ||||||
Interest expense, net | (35,457) | (98,033) | (108,852) | |||
Other income (expense), net | 194,824 | 1,065,963 | (11,946) | |||
Total other income (expense), net | 159,367 | 967,930 | (120,798) | |||
INCOME (LOSS) BEFORE INCOME TAX PROVISION | (1,278,658) | 523,046 | (149,445) | |||
PROVISION FOR INCOME TAXES | 9,547 | 16,277 | 14,584 | |||
NET INCOME (LOSS) | (1,288,205) | 506,769 | [1] | (164,029) | [1] | |
Foreign currency translation gain (loss) | (369,705) | 88,952 | 132,207 | |||
TOTAL COMPREHENSIVE INCOME (LOSS) | $ (1,657,910) | $ 595,721 | $ (31,822) | |||
Earnings (loss) per ordinary share - basic and diluted (in Dollars per share) | $ (0.14) | $ 0.06 | $ (0.02) | |||
Weighted average shares - basic and diluted (in Shares) | [2] | 9,000,000 | 9,000,000 | 9,000,000 | ||
[1]Retrospectively restated for effect of 1,000-for-1 forward split and share issuances on March 27, 2021 (see Note 12)[2]Retrospectively restated for effect of 1,000-for-1 forward split and share issuances on March 27, 2021 (see Note 12) |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Income (Loss) (Parentheticals) - $ / shares | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Income Statement [Abstract] | ||||
Earnings (loss) per ordinary share - diluted | $ (0.14) | $ 0.06 | $ (0.02) | |
Weighted average shares - diluted | [1] | 9,000,000 | 9,000,000 | 9,000,000 |
[1]Retrospectively restated for effect of 1,000-for-1 forward split and share issuances on March 27, 2021 (see Note 12) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders’ Equity - USD ($) | Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in Capital | Statutory Reserve | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income | Total | |||
Balance at Dec. 31, 2019 | $ 3,060 | [1] | $ 5,940 | [1] | $ 869,400 | $ 447,231 | $ 761,623 | $ 183,806 | $ 2,271,060 | |
Balance (in Shares) at Dec. 31, 2019 | [1] | 3,060,000 | 5,940,000 | |||||||
Net income (loss) | [1] | (164,029) | (164,029) | |||||||
Foreign currency translation gain | 132,207 | 132,207 | ||||||||
Balance at Dec. 31, 2020 | $ 3,060 | [1] | $ 5,940 | [1] | 869,400 | 447,231 | 597,594 | 316,013 | 2,239,238 | |
Balance (in Shares) at Dec. 31, 2020 | [1] | 3,060,000 | 5,940,000 | |||||||
Net income (loss) | [1] | 506,769 | 506,769 | |||||||
Foreign currency translation gain | 88,952 | 88,952 | ||||||||
Balance at Dec. 31, 2021 | $ 3,060 | [1] | $ 5,940 | [1] | 869,400 | 447,231 | 1,104,363 | 404,965 | 2,834,959 | |
Balance (in Shares) at Dec. 31, 2021 | [1] | 3,060,000 | 5,940,000 | |||||||
Net income (loss) | (1,288,205) | (1,288,205) | ||||||||
Foreign currency translation gain | (369,705) | (369,705) | ||||||||
Balance at Dec. 31, 2022 | $ 3,060 | [1] | $ 5,940 | [1] | $ 869,400 | $ 447,231 | $ (183,842) | $ 35,260 | $ 1,177,049 | |
Balance (in Shares) at Dec. 31, 2022 | [1] | 3,060,000 | 5,940,000 | |||||||
[1]Retrospectively restated for effect of 1,000-for-1 forward split and share issuances on March 27, 2021 (see Note 12) |
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 Income (Loss) | $ (1,288,205) | $ 506,769 | [1] | $ (164,029) | [1] |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||
Amortization of operating lease right-of-use assets | 2,533,074 | 2,226,128 | 1,387,154 | ||
Depreciation | 701,461 | 605,253 | 485,826 | ||
Gain on forgiveness of loan under Paycheck Protection Program | (502,298) | ||||
Loss from disposal of equipment | 27,325 | 273 | |||
Changes in operating assets and liabilities: | |||||
Accounts receivable | (215,847) | (397,872) | (217,961) | ||
Inventories | (206,264) | (46,384) | (94,227) | ||
Prepaid expenses and other current assets | (430,717) | (175,630) | 46,881 | ||
Long term security deposits | 84,374 | (236,020) | (222,806) | ||
Long term prepaid expenses | (26,504) | 38,476 | 55,347 | ||
Accounts payable | 247,015 | 325,803 | 181,852 | ||
Taxes payable | 103,212 | (26,347) | (73,994) | ||
Deferred revenue | 1,411,004 | 1,252,776 | 964,663 | ||
Other current liabilities | (433,848) | 98,362 | 27,689 | ||
Operating lease liabilities | (1,927,407) | (1,918,095) | (1,130,991) | ||
Net cash provided by operating activities | 551,348 | 1,778,246 | 1,245,677 | ||
Cash flows from investing activities: | |||||
Purchase of property and equipment | (860,034) | (2,038,054) | (574,333) | ||
Proceeds from disposal of equipment | 7,133 | ||||
Payments made for loan to third party | (1,550,628) | ||||
Proceeds from loan to third party repayment | 1,550,628 | ||||
Net cash used in investing activities | (860,034) | (2,030,921) | (574,333) | ||
Cash flows from financing activities: | |||||
Proceeds from short-term bank loans | 445,831 | 1,903,563 | 2,175,000 | ||
Repayments of short-term bank loans | (1,474,129) | (2,683,814) | (2,168,388) | ||
Proceeds from long-term bank loan | 293,007 | 209,291 | |||
Advances received from (payments made to) a related party | 1,076,717 | 572,712 | (791,036) | ||
Payments made for deferred offering costs | (38,490) | (263,708) | (274,246) | ||
Net cash provided by (used in) financing activities | 9,929 | (178,240) | (849,379) | ||
Effect of exchange rate fluctuation on cash and cash equivalents | (682,585) | 206,659 | 413,812 | ||
Net increase (decrease) in cash and cash equivalents and restricted cash | (981,342) | (224,256) | 235,777 | ||
Cash, cash equivalents and restricted cash, beginning of year | 3,896,812 | 4,121,068 | 3,885,291 | ||
Cash, cash equivalents and restricted cash, end of year | 2,915,470 | 3,896,812 | 4,121,068 | ||
Reconciliation of cash, cash equivalents and restricted cash, beginning of year | |||||
Cash and cash equivalents | 3,896,812 | 4,098,546 | 3,874,288 | ||
Restricted cash | 22,522 | 11,003 | |||
Cash, cash equivalents and restricted cash, beginning of year | 3,896,812 | 4,121,068 | 3,885,291 | ||
Reconciliation of cash, cash equivalents and restricted cash, end of year | |||||
Cash and cash equivalents | 2,915,470 | 3,896,812 | 4,098,546 | ||
Restricted cash | 22,522 | ||||
Cash, cash equivalents and restricted cash, end of year | 2,915,470 | 3,896,812 | 4,121,068 | ||
Supplemental cash flow information | |||||
Cash paid for income taxes | 5,282 | 9,981 | 103,160 | ||
Cash paid for interest | 37,277 | 66,688 | 113,848 | ||
Non-cash operating and investing activities | |||||
Payable for purchase of property and equipment | 463,556 | 682,618 | 7,283 | ||
Right of use assets obtained in exchange for operating lease liabilities | $ 5,160,825 | 2,420,359 | $ 4,687,623 | ||
PPP loan forgiveness | $ 502,298 | ||||
[1]Retrospectively restated for effect of 1,000-for-1 forward split and share issuances on March 27, 2021 (see Note 12) |
Organization and Business Descr
Organization and Business Description | 12 Months Ended |
Dec. 31, 2022 | |
Organization and Business Description [Abstract] | |
ORGANIZATION AND BUSINESS DESCRIPTION | NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION Chanson International Holding (“Chanson International,” or the “Company”), formerly known as RON Holding Limited, was established under the laws of the Cayman Islands on July 26, 2019 as a holding company. Chanson International owns 100% of the equity interests of Deen Global Limited (“Deen Global”), a limited liability company incorporated under the laws of British Virgin Islands (“BVI”) on August 13, 2019. Deen Global owns 100% of the equity interests of Jenyd Holdings Limited (“Jenyd”), a business company incorporated in accordance with the laws and regulations of Hong Kong on September 13, 2019. Chanson International, Deen Global, and Jenyd are currently not engaging in any active business operations and merely acting as holding companies. Xinjiang United Family Trading Co., Ltd. (“Xinjiang United Family”), is a company incorporated on August 7, 2009 in the People’s Republic of China (the “PRC”), with a registered capital of RMB6 million (approximately $0.88 million). On September 27, 2020, the original shareholders of Xinjiang United Family signed a share transfer agreement and transferred their 100% ownership interest in Xinjiang United Family to Jenyd, and accordingly Xinjiang United Family became a wholly foreign-owned enterprise (“WFOE”) and a wholly-owned subsidiary of Jenyd. Xinjiang United Family operates a bakery chain in China’s Xinjiang autonomous region under the brand name of “George●Chanson.” The chain currently consists of four directly-owned high-end bakery stores in the City of Urumqi and 29 bakery stores organized as individually-owned businesses known as the United Family Group (each a “UFG entity” and, collectively, the “UFG entities”) in Xinjiang region. The UFG entities are owned by the original shareholders of Xinjiang United Family but operated under a series of contractual agreements signed between the owners of these UFG entities and Xinjiang United Family. On April 17, 2015, Xinjiang United Family incorporated a wholly-owned subsidiary, George Chanson (NY) Corp. (“Chanson NY”), in the State of New York, which owns and operates Chanson 23rd Street LLC (“Chanson 23rd Street”), a modern European-style café and eatery that specializes in the art of making French-style viennoiseries and pastries in the heart of Manhattan’s Flatiron District. On February 20, 2020, the Company’s Chairman, Mr. Gang Li, formed Chanson 355 Greenwich LLC (“Chanson Greenwich”), a New York limited liability company, and subsequently assigned his membership interests in Chanson Greenwich to Chanson NY on September 28, 2020. After the transfer, Chanson Greenwich became a wholly owned subsidiary of Chanson NY. Chanson Greenwich is another boutique café in Manhattan opened in December 2021. On April 21, 2021, Chanson NY formed a wholly owned subsidiary, Chanson Management LLC, a Delaware limited liability company. On August 5, 2021, Chanson NY formed a wholly owned subsidiary, Chanson 1293 3rd Ave LLC (“Chanson 3rd Ave”), a New York limited liability company. Chanson 3rd Ave is another boutique café opened in March 2023. On March 21, 2022, Chanson NY formed a wholly owned subsidiary, Chanson 2040 Broadway LLC (“Chanson Broadway”), a New York limited liability company. Reorganization In connection with its initial public offering, the Company has undertaken a reorganization of its legal structure (the “Reorganization”). The Reorganization involved the incorporation of Chanson International, Deen Global, and Jenyd, the entry into a Share Transfer Agreement to transfer the ownership interest in Xinjiang United Family from its original shareholders to Jenyd, and the signing of a series of contractual agreements between Xinjiang United Family and the owners of the UFG entities. After the Reorganization, Chanson International became the ultimate holding company of Xinjiang United Family and Xinjiang United Family became the primary beneficiary of the UFG entities through the VIE Agreements, as further discussed below. Xinjiang United Family entered into a series of contractual arrangements with the owners of the 22 UFG entities on May 2, 2020, and with the owners of three newly established UFG entities in fiscal year 2020, five newly established UFG entities in fiscal year 2021, one newly established UFG entity in fiscal year 2022, and one newly established UFG entity in fiscal year 2023, respectively. Three of these UFG entities were closed in 2021. These agreements include Exclusive Service Agreements, Pledge Agreements, Call Option Agreements, Operating Rights Proxy and Powers of Attorney Agreements and Spousal Consents (collectively, the “VIE Agreements”). Pursuant to the above VIE Agreements, Xinjiang United Family has the exclusive right to provide the UFG entities with consulting services related to business operations including operational and management consulting services. The VIE Agreements obligate Xinjiang United Family to absorb all of the risk of loss from business activities of these UFG entities and entitle Xinjiang United Family to receive all of their residual returns. In essence, Xinjiang United Family has gained the power to direct activities of the UFG entities that most significantly impact their economic performance, and the right to receive benefits from the UFG entities that could potentially be significant to them. Therefore, the Company believes that Xinjiang United Family has a controlling financial interest in and is the primary beneficiary of the UFG entities and these UFG entities should be considered as Variable Interest Entities (“VIEs”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation The Company, together with its wholly-owned subsidiaries are under common control by the same shareholders before and after the Reorganization and therefore the consolidation of the Company and its subsidiaries has been accounted for at historical cost as of the beginning of the first period presented in the accompanying consolidated financial statements. After the Reorganization, the consolidated financial statements of the Company include the following entities: Name of Entity Date of Place of % of Principal Activities Chanson International July 26, 2019 Cayman Islands Parent, 100% Investment holding Deen Global August 13, 2019 British Virgin Islands 100% Investment holding Jenyd September 13, 2019 Hong Kong 100% Investment holding Xinjiang United Family August 7, 2009 PRC 100% Consultancy and information technology support; sells bakery products to customers 29 UFG entities 2012 to 2023 PRC VIEs Sells bakery products to customers Chanson NY April 17, 2015 New York 100% Holding company. Consultancy and information technology support Chanson 23rd Street December 18, 2015 New York 100% Eat-in services and bakery products and beverage products Chanson Greenwich February 20, 2020 New York 100% Eat-in services and bakery products and beverage products Chanson Management LLC April 21, 2021 Delaware 100% Consultancy and management support Chanson 3rd Ave August 5, 2021 New York 100% Eat-in services and bakery products and beverage products Chanson Broadway March 21, 2022 New York 100% Newly incorporated – not in operation yet The VIE contractual arrangements The UFG entities are controlled by the Company through contractual arrangements in lieu of direct equity ownership by the Company or any of its subsidiaries. A VIE is an entity that either has a total equity investment that is insufficient 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 of, and must consolidate, the VIE. Xinjiang United Family is deemed to have a controlling financial interest in and be the primary beneficiary of the UFG entities because it has both of the following characteristics: ● The power to direct activities at the UFG entities that most significantly impact such entities’ economic performance, and ● The obligation to absorb losses of, and the right to receive benefits from, the UFG entities that could potentially be significant to such entities. Pursuant to the contractual arrangements with the UFG entities, the UFG entities pay service fees equal to all of their net profit after tax payments to Xinjiang United Family. At the same time, Xinjiang United Family is obligated to absorb all of their losses. Such contractual arrangements are designed so that the operation of the UFG entities is for the benefit of Xinjiang United Family and, ultimately, the Company. Risks associated with the VIE structure The Company believes that the contractual arrangements with the UFG entities and their respective owners are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce such contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could: ● revoke the business and operating licenses of the Company’s PRC subsidiary and the UFG entities; ● discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and the UFG entities; ● limit the Company’s business expansion in China by way of entering into contractual arrangements; ● impose fines or other requirements with which the Company’s PRC subsidiary and the UFG entities may not be able to comply; ● require the Company or the Company’s PRC subsidiary and the UFG entities to restructure the relevant ownership structure or operations; or ● restrict or prohibit the Company’s use of the proceeds from its public offering to finance the Company’s business and operations in China. The Company’s ability to conduct its consulting services business may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate the UFG entities in its consolidated financial statements as it may lose the ability to direct activities of the UFG entities and receive economic benefits from the UFG entities. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company and its PRC subsidiary and the UFG entities. The financial position, operation, and cash flow of the UFG entities are material to total assets and liabilities presented on the consolidated balance sheets and revenue, expenses, and net income (loss) presented on the consolidated statements of operations and other comprehensive income (loss) as well as the cash flows from operating, investing, and financing activities presented on the consolidated statements of cash flows. The Company did not provide any financial support to the UFG entities for the years ended December 31, 2022, 2021, and 2020. The Company had no contractual obligation to provide financial support to the VIEs as of December 31, 2022. The amount of the recognized and unrecognized revenue-producing assets held by the VIEs was $1,626,516, including $422,226 of bakery production equipment, $75,555 of office equipment and furniture, and $1,128,735 of leasehold improvement, with the accumulated depreciation of $934,222, so net of these property, plant, and equipment was $692,294 as of December 31, 2022. The amount of the recognized and unrecognized revenue-producing assets held by the VIEs was $1,692,838, including $323,931 of bakery production equipment, $63,643 of office equipment and furniture, and $1,305,264 of leasehold improvement, with the accumulated depreciation of $762,803, so net of these property, plant, and equipment was $930,035 as of December 31, 2021. The following financial statement amounts and balances of the UFG entities were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: December 31, 2022 December 31, 2021 Current assets $ 7,123,635 $ 6,574,394 Non-current assets 4,078,979 6,191,804 Total assets $ 11,202,614 $ 12,766,198 Current liabilities $ 5,858,647 $ 6,619,273 Non-current liabilities 1,448,744 2,362,218 Total liabilities $ 7,307,391 $ 8,981,491 For the Years Ended December 31, 2022 2021 2020 Net revenue $ 5,198,990 $ 8,251,610 $ 7,831,994 Net income $ 829,557 $ 1,875,684 $ 1,288,630 Initial Public Offering On April 3, 2023, the Company closed its initial public offering (the “IPO”) of Class A ordinary shares ticker CHSN March 30, 2023 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission and have been consistently applied. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying consolidated financial statements include the financial statements of the Company and its subsidiaries and the VIEs. All intercompany balances and transactions are eliminated upon consolidation. Uses of estimates In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, useful lives of property and equipment, the recoverability of long-lived assets, provision necessary for contingent liabilities, and revenue recognition. Actual results could differ from those estimates. Cash and cash equivalents Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. The Company maintains a significant amount of its bank accounts in the PRC. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. Restricted cash Restricted cash represents funds set aside and placed with the bank and serves as the security deposit which is not available to fund general liquidity needs of the Company. Accounts receivable Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trend. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivable balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income (loss). Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of December 31, 2022 and 2021, there was no allowance recorded as the Company considers all of the accounts receivable fully collectible. Leases The Company follows FASB ASC No. 842, Leases 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 ROU 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 ROU assets are reviewed for impairment annually. There was no impairment for ROU lease assets as of December 31, 2022 and 2021. In response to the large volume of anticipated lease concessions to be granted related to the effects of the COVID-19 pandemic, and the resultant expected cost and complexity of applying the lease modification requirements in Topic 842, the FASB issued Staff Q&A—Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic Due to the COVID-19 pandemic, the Company renegotiated the leases for some of its PRC stores and New York stores. Based on the nature of the agreements reached with the landlords, the Company has accounted for rent concessions as if they were part of the enforceable rights and obligations of the existing lease contracts and did not account for the concessions as lease modifications. As the date of this report, the Company has received a total of lease concessions amounting to $1,081,885, and among which, $341,396, $141,499, and $598,990 was received during the years ended December 31, 2022, 2021, and 2020, respectively. The Company accounted for the concession as negative variable lease payments with a corresponding reduction in the lease liability. The Company has continued to recognize lease expenses on a straight-line basis for its leases over the related lease terms. Inventories Inventories of the Company consist of ingredient materials, finished goods, packing materials, and other materials. Inventories are stated at the lower of cost or net realizable value, on a weighted average basis. Costs include the cost of ingredient materials, direct labor, and related production overhead. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. The Company periodically evaluates inventories for their net realizable value adjustments, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and expiration dates, as applicable, taking into consideration historical and expected future product sales. For the years ended December 31, 2022, 2021, and 2020, no inventory reserve was recorded because no slow-moving, obsolete, or damaged inventory was identified. Property and equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment are provided using the straight-line method over their expected useful lives, as follows: Useful life Bakery production equipment 5-8 years Office equipment and furniture 3-5 years Transportation vehicles 5 years Leasehold improvement Lesser of useful life and lease term Expenditures for repair and maintenance, which do not materially extend the useful lives of the assets, are charged to expenses as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operations and comprehensive income (loss) in other income or expenses. Impairment of long-lived assets Long-lived assets with finite lives, primarily property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There were no impairments of these assets as of December 31, 2022 and 2021. Revenue recognition The Company follows ASC 606, Revenue from Contracts with Customers The Company currently generates its revenue through its bakery/café stores as well as through online sales. The Company recognizes revenue from bakery/café sales upon delivery of the related food and other products to the customer and fulfillment of all performance obligations. Revenue is recognized net of any discounts, sales incentives, sales taxes, and value added taxes that are collected from customers and remitted to tax authorities. In the PRC Stores, the Company sells membership cards that do not have an expiration date and from which the Company does not deduct non-usage fees from outstanding card balances. Membership cards are reloadable and redeemable at any of the Company’s store locations. Amounts loaded into these cards are initially recorded as deferred revenue. When membership cards are redeemed at stores, the Company recognizes revenue and reduces the deferred revenue. While the Company continues to honor all membership cards presented for payments, management determines the likelihood of redemption to be remote for certain cards with long periods of inactivity (“breakage”), which is five years after the last usage, based upon the Company’s historical redemption patterns. Membership card breakage is recorded as revenue in the consolidated statements of operations and comprehensive income (loss). Membership card breakage was immaterial for the years ended December 31, 2022, 2021, and 2020. In the PRC Stores, the Company maintains a customer loyalty program in which customers earn free cash vouchers when purchasing or reloading membership cards at certain amount. These cash vouchers typically do not expire, except for certain vouchers given out at special occasions, which usually state an expiration date and can only be exchanged for certain seasonal products or specialty cakes. The Company establishes corresponding liabilities in deferred revenue for the membership cards and the free cash vouchers upon issuance. The Company allocates the consideration received proportionately between the membership cards and cash vouchers based on their face values. Revenue is recognized at the allocated amount upon redemption of membership cards and cash vouchers, at which point, the Company delivers products to customers and reduces the deferred revenue. Unredeemed cash vouchers will be recognized as revenue upon their expiration dates, if any, or five years after their issuance if there are no stated expiration dates, when management determines the likelihood of redemption to be remote. Contract balances and remaining performance obligations Contract balances typically arise when a difference in timing between the transfer of control to the customer and receipt of consideration occurs. The Company did not have contract assets as of December 31, 2022 and 2021. The Company’s contract liabilities, which are reflected in its consolidated balance sheets as deferred revenue of $6,958,160 and $6,051,683 as of December 31, 2022 and 2021, respectively, consist primarily of customer payments for the membership cards and the fair value of the cash vouchers under the Company’s customer loyalty programs. These amounts represent the Company’s unsatisfied performance obligations as of the balance sheet dates. The amount of revenue recognized in the years ended December 31, 2022, 2021, and 2020 that was included in the opening deferred revenue was $4,920,442, $4,823,134, and $2,936,748, respectively. As of December 31, 2022, the aggregate amount of unredeemed membership cards and cash vouchers was $6,958,160. The Company will recognize revenue when customers redeem the membership cards or cash vouchers in store purchases. Based on the Company’s historical experience, a significant portion of the redemption is expected to occur during the first two years after December 31, 2022 and the remaining between the third and fifth year. Disaggregation of revenue The Company disaggregates its revenue by geographic areas, as the Company believes it best depicts how the nature, amount, timing, and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenue for the years ended December 31, 2022, 2021, and 2020 is disclosed in Note 14 of the consolidated financial statements. F-13 Fair value of financial instruments 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. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● 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, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● Level 3 — inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, short-term bank loans, accounts payable, due to a related party, taxes payable, operating lease liabilities, current and other current liabilities, approximates the fair value of the respective assets and liabilities as of December 31, 2022 and 2021 based upon the short-term nature of the assets and liabilities. The fair value of longer-term operating lease liabilities approximates their recorded values as their stated interest rates approximate the rates currently available. Foreign currency translation The functional currency of the Company’s PRC subsidiary and the UFG entities is the Chinese Yuan (“RMB”) and the functional currency of the Company’s U.S. subsidiaries is the U.S. Dollars (“US$”). RMB amounts in the Company’s consolidated financial statements have been translated into the reporting currency US$. Assets and liabilities of the Company are translated at the exchange rate at each reporting period end date. Equity is translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income (loss). Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations. RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: December 31, December 31, December 31, Year-end spot rate US$1=RMB6.8972 US$1=RMB6.3614 US$1=RMB6.5326 Average rate US$1=RMB6.7290 US$1=RMB6.4490 US$1=RMB6.9020 Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. 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. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No penalties or interest relating to income taxes were incurred during the years ended December 31, 2022, 2021, and 2020. The Company does not believe there was any uncertain tax provision at December 31, 2022 and 2021. The Company’s operating subsidiary in China is subject to the income tax laws of the PRC. The Company’s operating subsidiary in United States is subject to the tax law of the United States. As of December 31, 2022, the tax years ended December 31, 2018 through December 31, 2022 for the Company’s PRC subsidiary remain open for statutory examination by PRC tax authorities, and the tax years ended December 31, 2020 through December 31, 2022 for the Company’s United States subsidiary remain open for statutory examination by U.S. tax authorities. Value added tax (“VAT”) The Company’s subsidiary Xinjiang United Family and its three branch offices are general tax payers. The applicable VAT rate is 13% based on the Chinese tax law. VAT is reported as a deduction to revenue when incurred. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. The UFG entities were formed as individually-owned businesses, which are generally subject to a lower VAT rate of 3% and the local PRC tax authority has the jurisdiction to assess and determine their VAT obligation or exemption on a case-by-case basis. Before April 1, 2021, 16 of the UFG entities were exempted from paying VAT while nine of these UFG entities were subject to VAT rate of 3% as determined by the local tax authority. From April 1, 2021 to December 31, 2022, based on the new tax regulation, individually-owned businesses whose monthly deemed Taxable Net Income (“TNI”) is less than RMB150,000 are exempted from paying VAT. All but one of the UFG entities are currently exempted from paying VAT, since the deemed TNI of each of these UFG entities is currently less than RMB150,000. Their VAT eligibility is subject to periodical reassessment, and they may lose or regain the exemption status as determined by the tax authorities on a case-by-case basis. Earnings (loss) per share The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, Earnings per Share Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). The foreign currency translation gain (loss) resulting from the translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss). Risks and uncertainties Political and economic risk The operations of the Company are located in the PRC and United States. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC and United States, as well as by the general state of the PRC and United States economy. The Company’s results may be adversely affected by changes in the political, regulatory, and social conditions in the PRC and United States. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, such experience may not be indicative of future results. Foreign currency exchange risk A majority of the Company’s revenue and expense transactions are denominated in RMB and most of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to effect the remittance. Credit risk As of December 31, 2022 and 2021, $2,747,940 and $3,647,342 of the Company’s cash was on deposit at financial institutions in the PRC where there currently is no rule or regulation requiring such financial institutions to maintain insurance to cover bank deposits in the event of bank failure. As of December 31, 2022 and 2021, $115,452 and $162,018 of the Company’s cash was on deposit at financial institutions in the U.S. which were insured by the Federal Deposit Insurance Corporation subject to certain limitations. The Company has not experienced any losses in such accounts. For the years ended December 31, 2022, 2021, and 2020, the Company’s substantial assets were located in the PRC and the U.S. and the Company’s substantial revenue was derived from its subsidiaries and the UFG entities located in the PRC and the U.S. Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. Concentrations No single customer accounted for more than 10% of the Company’s revenue for the years ended December 31, 2022, 2021, and 2020. As of December 31, 2022, one customer accounted for 11.7% of the Company’s total accounts receivable balance. As of December 31, 2021, one customer accounted for 11.6% of the Company’s total accounts receivable balance. For the year ended December 31, 2022, no supplier accounted for more than 10% of the Company’s total purchases. For the years ended December 31, 2021 and 2020, one supplier accounted for 14.7% and 21.5% of the Company’s total purchases, respectively. Recent accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses,” which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Further, the FASB issued ASU No. 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11, and ASU 2020-02 to provide additional guidance on the credit losses standard. The new effective date for SEC filers that are eligible to be smaller reporting companies under the SEC’s definition, as well as private companies and not-for-profit entities is for annual and interim periods in fiscal years beginning after December 15, 2022. Adoption of the ASUs is on a modified retrospective basis. The Company adopted ASU 2016-13 on January 1, 2023, and the adoption of this ASU did not have a material impact on its consolidated financial statements. Except for the above-mentioned pronouncement, there are no new recently issued accounting standards that will have material impact on the Company’s consolidated financial position, statements of operations, and cash flows. |
Liquidity
Liquidity | 12 Months Ended |
Dec. 31, 2022 | |
Liquidity [Abstract] | |
LIQUIDITY | NOTE 3 — LIQUIDITY As reflected in the consolidated financial statements, the Company had a net loss of $1.3 million for the year ended December 31, 2022 as compared to net income of $0.5 million for the year ended December 31, 2021. In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources and ability to obtain additional financial support in the future, and its operating and capital expenditure commitments. As of December 31, 2022, the Company only had cash of approximately $2.9 million. Due to the impact from a resurgence of the COVID-19 pandemic in August 2022 in Xinjiang (the “2022 Outbreak”), which resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans, the operations of the PRC Stores and the production of the PRC Stores’ central factory were affected starting from August 10, 2022 and all of the PRC Stores and the central factory were closed between October 5, 2022 and November 30, 2022, the Company only managed to generate limited online sales and group sales in PRC. As a result, the Company’s revenue was negatively impacted and decreased by 9.7% in fiscal year 2022 as compared to fiscal year 2021, and the Company also incurred a net loss of approximately $1.3 million in fiscal year 2022. However, all of the PRC stores resumed their normal business activities on December 10, 2022 and have fully recovered from the 2022 Outbreak as of the date of this report. The Company opened one store in PRC and one store in the U.S. in March 2023, and another store is expected to be open in the U.S. in May 2023, and the Company expects to open another four stores in PRC and six stores in the U.S. later in fiscal year 2023. In addition, the Company will further implement initiatives to control costs and improve its operating efficiency in fiscal year 2023. Therefore, revenue and net income are expected to increase significantly in fiscal year 2023 as compared to fiscal year 2022. On April 3, 2023, the Company closed its IPO of 3,390,000 Class A ordinary shares at a public offering price of $4.00 per Class A ordinary share for total gross proceeds of $13.6 million before deducting underwriting discounts and other related expenses. Net proceeds of the Company’s IPO were approximately $12.0 million. Furthermore, the Company’s controlling shareholder, Mr. Gang Li, has made pledges to provide continuous financial support to the Company for at least 12 months from the issuance of the consolidated financial statements. Currently, the Company is working to improve its liquidity and capital sources primarily through cash flows from operation, debt financing, financial support from its principal shareholder, and the proceeds the Company received from the IPO. In order to fully implement its business plan and sustain continued growth, the Company may also seek equity financing from outside investors when necessary. Based on the current operating plan, management believes that the above-mentioned measures collectively will provide sufficient liquidity for the Company to meet its future liquidity and capital requirement for at least 12 months from the date the consolidated financial statements are issued. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Receivable, Net [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 4 — ACCOUNTS RECEIVABLE, NET The Company’s accounts receivable primarily include balance generated from selling bakery products to local corporate customers, billed but has not been collected as of the balance sheet dates. Accounts receivable consisted of the following: December 31, 2022 December 31, Accounts receivable $ 1,260,453 $ 1,134,532 Less: allowance for doubtful accounts - - Accounts receivable, net $ 1,260,453 $ 1,134,532 As of the date of the consolidated financial statements, approximately 44%, or $0.6 million, of the December 31, 2022 balance has been subsequently collected. The remaining balance of approximately $0.7 million is expected to be collected before December 31, 2023. |
Prepaid Expenses And Other Curr
Prepaid Expenses And Other Current Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | NOTE 5 — PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET Prepaid expenses and other current assets consisted of the following: December 31, 2022 December 31, Advance to suppliers (1) $ 512,900 $ 70,228 Prepaid expenses (2) 217,064 257,479 Other receivables (3) 103,274 110,338 Less: allowance for doubtful accounts - - Prepaid expenses and other current assets, net $ 833,238 $ 438,045 (1) Advance to suppliers primarily consists of advance payments paid to suppliers for purchases of raw materials for bakery products. (2) Prepaid expenses primarily represent prepaid rental expenses and other miscellaneous expenses for the Company’s bakery stores. (3) Other receivables are mainly business advances to officers and staff for business travel and sundry expenses. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventory [Abstract] | |
INVENTORIES | NOTE 6 — INVENTORIES Inventories consisted of the following: December 31, 2022 December 31, Ingredient materials $ 540,689 $ 418,247 Package and other materials 60,904 38,959 Finished goods 91,913 69,656 Total inventories $ 693,506 $ 526,862 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 7 — LEASES The Company leases office spaces, bakery store facilities, employee dormitories and a vehicle under non-cancelable operating leases, with terms ranging from 1 to 15 years. 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 ROU assets and lease liabilities. Lease expenses are recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet. 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 uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate. 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 sheets. December 31, 2022 December 31, ROU lease assets $ 13,921,825 $ 11,644,192 Operating lease liabilities – current $ 1,770,398 $ 1,622,642 Operating lease liabilities – non-current 12,620,070 9,846,224 Total operating lease liabilities $ 14,390,468 $ 11,468,866 The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2022 and 2021: December 31, 2022 December 31, Remaining lease term and discount rate: Weighted average remaining lease term (years) 8.53 7.22 Weighted average discount rate * 4.35 % 4.87 % * The Company used incremental borrowing rate of 6.98% for its lease contracts entered prior to fiscal year 2022 in the PRC, and for lease contracts entered in fiscal year 2022, the Company used new incremental borrowing rate of 3.95%. The Company used incremental borrowing rate 3.75% for its lease contracts in the United States. During the years ended December 31, 2022, 2021, and 2020, the Company incurred total operating lease expenses of $2,333,412, $2,636,019, and $1,749,258, respectively. The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2022: 2023 $ 2,433,761 2024 2,151,340 2025 1,924,110 2026 1,793,273 2027 1,761,804 Thereafter 7,478,878 Total lease payments 17,543,166 Less: imputed interest (3,152,698 ) Present value of lease liabilities $ 14,390,468 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 8 — PROPERTY AND EQUIPMENT, NET Property and equipment, net, consisted of the following: December 31, 2022 December 31, Bakery production equipment $ 1,618,358 $ 1,333,182 Automobiles 85,149 65,471 Office equipment and furniture 596,579 509,426 Leasehold improvements 6,289,217 4,307,500 Construction in progress* - 1,337,565 Subtotal 8,589,303 7,553,144 Less: accumulated depreciation (2,717,528 ) (2,105,426 ) Property and equipment, net $ 5,871,775 $ 5,447,718 * The Company constructed a new central factory in Urumqi, Xinjiang, to expand the production capacity of its PRC Stores. The investment budget for the new central factory is approximately RMB18.1 million (approximately $2.6 million) after VAT deduction. The construction has two stages. The first stage includes: 1) construction and renovation that cost approximately RMB13.1 million (approximately $1.9 million); 2) installation of production equipment of approximately RMB1.4 million (approximately $0.2 million); and 3) miscellaneous projects of approximately RMB1.1 million (approximately $0.1 million). The first stage of the construction was completed in June 2022, and the Company started production in the new central factory in August 2022. The second stage is expected to start in the second half of 2023, and includes construction of two new production lines of approximately RMB2.5 million (approximately $0.4 million). Depreciation expenses were $701,461, $605,253, and $485,826 for the years ended December 31, 2022, 2021, and 2020, respectively. In connection with the Company’s RMB10 million short-term loans from Huaxia Bank as of December 31, 2021, the Company pledged its property and equipment with net book values of $319,832 as collateral for these loans (see Note 9). |
Short-Term Bank Loans
Short-Term Bank Loans | 12 Months Ended |
Dec. 31, 2022 | |
Short-Term Bank Loans [Abstract] | |
SHORT-TERM BANK LOANS | NOTE 9 — SHORT-TERM BANK LOANS On May 31, 2021, Xinjiang United Family entered into a loan agreement with Huaxia Bank to borrow RMB10.0 million ($1,559,314) as working capital for a year, with a maturity date of May 31, 2022. The loan bore a fixed interest rate of 5.54%. The loan was repaid in full upon maturity. The loan was guaranteed by Ms. Baolin Wang, the legal representative of Xinjiang United Family, and XJ Financing Guaranty. In order for XJ Financing Guaranty to endorse the guarantee with the bank, the Company’s controlling shareholder Mr. Gang Li and his wife, Ms. Ying Xiong, jointly signed a personal guarantee agreement with XJ Financing Guaranty and pledged their residential property as collateral to XJ Financing Guaranty. In addition, Xinjiang United Family pledged all its equipment in the PRC as collateral to XJ Financing Guaranty. Three affiliated entities controlled by Mr. Gang Li also signed guarantee agreements with XJ Financing Guaranty. On December 23, 2022, Xinjiang United Family entered into a new loan agreement with Huaxia Bank to borrow RMB3.0 million ($434,959) as working capital for a year, with a maturity date of December 23, 2023. The loan bore a fixed interest rate of 3.95%. The loan is guaranteed by Ms. Baolin Wang, the legal representative of Xinjiang United Family, and Urumqi Plastic Surgery Hospital Co., Ltd., that is controlled by the Chairman of the Company The Company incurred interest expenses of $37,277, $98,033, and $108,852 for the years ended December 31, 2022, 2021, and 2020, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 10 — RELATED PARTY TRANSACTIONS a. Due to a related party As of December 31, 2022, due to a related party of $1,798,605 primarily represented advances provided by Mr. Gang Li, Chairman of the Company, to fund the Company’s operations. These payables were unsecured, non-interest bearing, and due on demand. All expenses and liabilities were paid by Mr. Gang Li on behalf of the Company, and recorded in the Company’s consolidated financial statements in a timely manner. The outstanding amount is expected to be repaid before June 30, 2023. b. Other related party transaction Several related parties provided guarantees in connection with the Company’s loans borrowed from Huaxia Bank (see Note 9). |
Taxes
Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax [Abstract] | |
TAXES | NOTE 11 — TAXES (a) Corporate Income Taxes (“CIT”) Cayman Islands Under the current tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders. British Virgin Islands Deen Global is incorporated in the BVI as an offshore holding company and is not subject to tax on income or capital gain under the laws of BVI. Hong Kong Jenyd is incorporated in Hong Kong and is subject to profit taxes in Hong Kong at a rate of 8.25% on assessable profits up to HK$2,000,000, and 16.5% on any part of assessable profits over HK$2,000,000. However, Jenyd did not generate any assessable profits arising in or derived from Hong Kong for the years ended December 31, 2022, 2021, and 2020, and accordingly no provision for Hong Kong profits tax was made in these periods. PRC Under the Enterprise Income Tax (“EIT”) Law of the PRC, domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays, or exemptions may be granted on a case-by-case basis. The Company’s subsidiary Xinjiang United Family and its three branch offices are incorporated in the PRC. During the years ended December 31, 2022, 2021, and 2020, Xinjiang United Family and all its three branch offices qualified as small-scaled minimal profit enterprises. Based on the EIT Law of PRC, and according to the Announcement on Issues Related to the Implementation of Inclusive Income Tax Reduction and Exemption Policy for Small and Low Profit Enterprises issued by the State Administration of Taxation on January 18, 2019, from January 1, 2019 to December 31, 2021, once an enterprise meets certain requirements and is identified as a small-scale minimal profit enterprise, the portion of its taxable income not more than RMB1 million is subject to a reduced rate of 5% and the portion between RMB1 million and RMB3 million is subject to a reduced rate of 10%. Furthermore, according to the Announcement on Implementing the Preferential Income Tax Policies for Small-Scale Minimal Profit Enterprise and Individually-Owned Businesses on April 2, 2021, the portion of its taxable income not more than RMB1 million is further reduced to 2.5% during the period from January 1, 2021 to December 31, 2022 and the portion between RMB1 million and RMB3 million remained at a reduced rate of 10%. The UFG entities are individually-owned businesses, which are not subject to the EIT Law of the PRC, but the Individual Income Tax. The Measures for Individual Income Tax Calculation of Individual Industrial and Commercial Households, or the “Measures,” were adopted by the State Administration of Taxation on December 19, 2014 and promulgated on December 27, 2014, and amended on June 15, 2018. According to Article 7 of the Measures, for the income from production and operation of individually-owned businesses, the amount of taxable income shall be the balance of the total income of each tax year after deducting costs, expenses, taxes, losses and other expenditures, and allowable compensation for losses in previous years. Income tax for an individually-owned business can generally be assessed on an actual basis or a deemed basis, which the UFG entities apply. Therefore, income tax for the UFG entities is levied as a fixed-rate income tax at 1% of TNI as assessed by the local tax authority. According to Announcement No. 12 [2021] of the State Taxation Administration, the tax rate is reduced by half to 0.5% during the period from January 1, 2021 to December 31, 2022. For the year ended December 31, 2022, 13 of these UFG entities were subject to income tax assessed at 0.5% of TNI that ranged from RMB33,000 to RMB180,000 per month. For the year ended December 31, 2021, 13 of these UFG entities were subject to income tax assessed at 0.5% of TNI that ranged from RMB25,000 to RMB180,000 per month. For the year ended December 31, 2020, 11 of these UFG entities were subject to income tax assessed at 1% of TNI that ranged from RMB33,000 to RMB120,000 per month. The rest of these UFG entities were exempted from paying income tax. During the years ended December 31, 2022, 2021, and 2020, the total tax exemption of the UFG entities were $15,711, $15,001, and $3,480, respectively. As of December 31, 2022, the tax years ended December 31, 2018 through December 31, 2022 for the Company’s UFG entities remain open for statutory examination by PRC tax authorities. In addition, the TNI and tax rate of the Company’s UFG entities are subject to periodical reassessment by the local tax authority. If the local tax authority determined that income tax for the UFG entities should be levied at a higher TNI or higher tax rate, the Company would be obligated to pay additional income tax for the UFG entities. Along with the continuing growth of business, the Company expects that the tax rates of these UFG entities are likely to increase in the future in the annual assessment based on the past performance. United States The Company’s subsidiaries in the U.S. are subject to a U.S. federal corporate income tax rate of 21%. The components of the income tax provision were as follows: For the Years Ended December 31, 2022 2021 2020 Current tax provision Cayman Islands $ - $ - $ - BVI - - - Hong Kong - - - PRC 9,547 16,277 14,584 United States - - - $ 9,547 $ 16,277 $ 14,584 Deferred tax provision Cayman Islands $ - $ - $ - BVI - - - Hong Kong - - - PRC - - - United States - - - - - - Income tax provisions $ 9,547 $ 16,277 $ 14,584 The Company’s deferred tax assets, net were comprised of the following: December 31, December 31, Net operating loss $ 2,500,664 $ 1,802,625 Total deferred tax assets 2,500,664 1,802,625 Valuation allowance (2,500,664 ) (1,802,625 ) Deferred tax assets, net $ - $ - The Company’s operations in the U.S. incurred a cumulative net operating loss (“NOL”) which may reduce future federal taxable income. As of December 31, 2021, the cumulative NOL was $9,695,396. During the year ended December 31, 2022, the U.S. operations incurred an additional NOL of $2,212,526, resulting in a cumulative NOL of $11,907,922 as of December 31, 2022, among which approximately $2,882,465 will expire in 2037 and the remaining balance is carried forward indefinitely. The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that could affect the Company’s future realization of deferred tax assets including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company determined that it is more likely than not its deferred tax assets could not be realized due to uncertainty on future earnings in the U.S. operations. The Company provided a 100% allowance for its deferred tax assets as of December 31,2022 and 2021, respectively. Income / (loss) before provision for income taxes is attributable to the following geographic locations for the years ended December 31: For the Years Ended December 31, 2022 2021 2020 PRC $ 933,868 $ 2,044,086 $ 1,491,960 US (2,212,526 ) (1,521,040 ) (1,641,405 ) Total Income (Loss) before Income Taxes $ (1,278,658 ) $ (523,046 ) $ 149,445 Reconciliation of the differences between the income tax provision computed based on PRC statutory income tax rate and the Company’s actual income tax provision for the years ended December 31, 2022, 2021, and 2020 are as follows: For the Years Ended December 31, 2022 2021 2020 Income tax expense (benefit) computed based on PRC statutory rate $ (319,664 ) $ 130,761 $ (37,361 ) Favorable tax rate and tax exemption impact in PRC entities (a) (223,920 ) (494,744 ) (358,406 ) Effect of rate differential for U.S. subsidiaries 88,501 60,842 65,656 Change in valuation allowance 464,630 319,418 344,695 Actual income tax provision $ 9,547 $ 16,277 $ 14,584 (a) During the years ended December 31, 2022 and 2021, the Company’s subsidiary, Xinjiang United Family, and its three branch offices, were subject to a favorable tax rate of 2.5%. During the year ended December 31, 2020, the Company’s subsidiary, Xinjiang United Family, and its three branch offices, were subject to a favorable tax rate of 5.0%. For the year ended December 31, 2022, 13 of these UFG entities were subject to income tax assessed at 0.5% of TNI that ranged from RMB33,000 to RMB180,000 per month. For the year ended December 31, 2021, 13 of these UFG entities were subject to income tax assessed at 0.5% of TNI that ranged from RMB25,000 to RMB180,000 per month. During the year ended December 31, 2020, 11 of the UFG entities were subject to income tax assessed at 1% of TNI ranging from RMB33,000 to RMB120,000 per month. The rest of the UFG entities were exempted from paying income tax. For the years ended December 31, 2022, 2021, and 2020, the tax saving as the result of the favorable tax rates and tax exemption amounted to $223,920, $494,744, and $358,406, respectively, and per share effect of the favorable tax rate and tax exemption was $0.02, $0.05, and $0.04, respectively. (b) Taxes payable Taxes payable consisted of the following: December 31, 2022 December 31, Income tax payable (recoverable) $ (3,404 ) $ 1,463 Value added tax payable 93,924 4,850 Other taxes payable 40,207 24,526 Total taxes payable $ 130,727 $ 30,839 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 12 – SHAREHOLDERS’ EQUITY Ordinary shares Chanson International was established under the laws of the Cayman Islands on July 26, 2019. The authorized number of ordinary shares was 50,000 shares with par value of $1 per share and 100 ordinary shares were issued, prior to the 1,000-for-1 forward split and the share issuances described below. The issuance of these 100 ordinary shares, and the 1,000-for-1 forward split and the share issuances are considered as a part of the Reorganization of the Company, which was retroactively applied as if the transaction occurred at the beginning of the period presented (see Note 1). On March 27, 2021, the Company’s shareholders and board of directors approved (i) a forward split of the Company’s ordinary shares at a ratio of 1,000-for-1 share to increase the authorized ordinary shares from 50,000 shares to 50,000,000 shares and subdivide the 100 ordinary shares of a par value of $1 then outstanding into 100,000 ordinary shares of a par value of $0.001 (the “1,000-for-1 forward split”); (ii) the creation of Class A Ordinary Shares and Class B Ordinary Shares. Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except for voting and conversion rights. In respect of matters requiring a vote of all shareholders, each holder of Class A Ordinary Shares will be entitled to one vote per one Class A Ordinary Share and each holder of Class B Ordinary Shares will be entitled to 10 votes per one Class B Ordinary Share. 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; and (iii) issuances of Class A Ordinary Shares and Class B Ordinary Shares to the existing shareholders, to increase the number of total ordinary shares issued and outstanding prior to the completion of this offering from 100,000 to 9,000,000 (the “share issuances”). The Company believes the 1,000-for-1 forward split and the share issuances should be considered as a part of the Reorganization of the Company and accounted for on a retroactive basis pursuant to ASC 260. The Company has retroactively restated all shares and per share data for all periods presented. As a result, the Company had 44,000,000 authorized Class A Ordinary Shares of a par value of $0.001, of which 3,060,000 Class A Ordinary Shares were issued and outstanding as of December 31, 2022 and 2021, and the Company had 6,000,000 authorized Class B Ordinary Shares of a par value of $0.001, of which 5,940,000 Class B Ordinary Shares were issued and outstanding as of December 31, 2022 and 2021. In total, the Company had 50,000,000 authorized ordinary shares of a par value of $0.001, of which 9,000,000 were issued and outstanding as of December 31, 2022 and 2021. Statutory Reserve The Company’s PRC subsidiary is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory reserve may be applied against prior year losses, if any, and may be used for general business expansion and production or increase in registered capital, but are not distributable as cash dividends. As of December 31, 2022 and 2021, the balance of the statutory reserves was $447,231 and $447,231, respectively, which is equal to 50% of the entity’s registered capital. Restricted net assets The Company’s PRC subsidiary and the UFG entities are restricted in their ability to transfer a portion of their net assets, equivalent to their statutory reserves and their share capital to the Company in the form of loans, advances, or cash dividends. The payment of dividends by entities organized in China is subject to limitations, procedures, and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. As of December 31, 2022 and 2021, the total restricted net assets amounted to $1,325,631 and $1,325,631, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 – COMMITMENTS AND CONTINGENCIES Contingencies From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. As of December 31, 2022 and 2021, there were no legal claims and litigation against the Company. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 14 – SEGMENT REPORTING In accordance with ASC 280, Segment Reporting The following table presents the segment information for the years ended December 31, 2022, 2021, and 2020, respectively: For the Year Ended December 31, 2022 China United Total Revenue $ 9,491,208 $ 3,780,867 $ 13,272,075 Cost of revenue 5,080,616 2,088,788 7,169,404 Gross profit $ 4,410,592 $ 1,692,079 $ 6,102,671 Net income (loss) $ 924,321 $ (2,212,526 ) $ (1,288,205 ) Interest expense $ (35,457 ) $ - $ (35,457 ) Provision for income tax $ 9,547 $ - $ 9,547 Depreciation and amortization $ 385,736 $ 315,725 $ 701,461 Capital expenditures $ 671,965 $ 188,069 $ 860,034 For the Year Ended December 31, 2021 China United Total Revenue $ 12,796,089 $ 1,894,206 $ 14,690,295 Cost of revenue 6,582,462 1,177,410 7,759,872 Gross profit $ 6,213,627 $ 716,796 $ 6,930,423 Net income (loss) $ 2,027,809 $ (1,521,040 ) $ 506,769 Interest expense $ (98,033 ) $ - $ (98,033 ) Provision for income tax $ 16,277 $ - $ 16,277 Depreciation and amortization $ 317,702 $ 287,551 $ 605,253 Capital expenditures $ 1,096,051 $ 942,003 $ 2,038,054 For the Year Ended December 31, 2020 China United Total Revenue $ 8,973,742 $ 1,339,770 $ 10,313,512 Cost of revenue 4,410,288 753,890 5,164,178 Gross profit $ 4,563,454 $ 585,880 $ 5,149,334 Net income (loss) $ 1,477,377 $ (1,641,406 ) $ (164,029 ) Interest expense $ (108,852 ) $ - $ (108,852 ) Provision for income tax $ 14,584 $ - $ 14,584 Depreciation and amortization $ 276,981 $ 208,845 $ 485,826 Capital expenditures $ 262,284 $ 312,049 $ 574,333 December 31, 2022 December 31, Total assets: China $ 11,704,732 $ 12,625,783 United Stated 15,624,454 12,370,311 Total assets $ 27,329,186 $ 24,996,094 Total liabilities: China $ 12,102,414 $ 13,163,745 United Stated 14,049,723 8,997,390 Total liabilities $ 26,152,137 $ 22,161,135 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS On April 3, 2023, the Company closed its IPO of Net proceeds of the Company’s IPO were approximately $12.0 million. Class A ordinary shares ticker CHSN March 30, 2023 The Company evaluated the subsequent events through May 1, 2023, which is the date of the issuance of these consolidated financial statements, and concluded that there are no additional subsequent events except disclosed above 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 of the Parent Company [Abstract] | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | NOTE 16 – CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY Pursuant to the requirements of Rules 12-04(a), 5-04(c), and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with such requirements and concluded that it was applicable to the Company as the restricted net assets of the Company’s PRC subsidiary and the UFG entities exceeded 25% of the consolidated net assets of the Company. Therefore, the condensed financial statements for the parent company are included herein. For purposes of the above test, restricted net assets of consolidated subsidiaries and VIEs shall mean that amount of the Company’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries and VIEs in the form of loans, advances, or cash dividends without the consent of a third party. The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries and VIEs. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries and VIEs” and the respective profit or loss as “Equity in earnings of subsidiaries and VIEs” on the condensed statements of operations and comprehensive income (loss). The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The Company did not pay any dividend for the periods presented. As of December 31, 2022 and 2021, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any. CHANSON INTERNATIONAL HOLDING PARENT COMPANY BALANCE SHEETS December 31, 2022 December 31, ASSETS Current assets Intercompany receivable $ 9,000 $ 9,000 Total current assets 9,000 9,000 Non-current assets Loss from investment in subsidiaries $ (5,634,277 ) $ (4,346,072 ) Total assets $ (5,625,277 ) $ (4,337,072 ) LIABILITIES AND SHAREHOLDERS’ DEFICIT LIABILITIES $ - $ - COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ DEFICIT Ordinary shares, $0.001 par value, 50,000,000 shares authorized; 9,000,000 shares issued and outstanding as of December 31, 2022 and 2021: Class A ordinary share, $0.001 par value, 44,000,000 shares authorized; 3,060,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively 3,060 3,060 Class B ordinary share, $0.001 par value, 6,000,000 shares authorized; 5,940,000 shares issued and outstanding as of December 31, 2022 and 2021 5,940 5,940 Additional paid-in capital - - Accumulated deficit (5,634,277 ) $ (4,346,072 ) Accumulated other comprehensive income - - Total shareholders’ deficit (5,625,277 ) $ (4,337,072 ) Total liabilities and shareholders’ deficit $ (5,625,277 ) $ (4,337,072 ) CHANSON INTERNATIONAL HOLDING PARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Years Ended December 31, 2022 2021 2020 EQUITY IN EARNINGS (LOSS) OF SUBSIDIARIES AND VIES $ (1,288,205 ) $ 506,769 $ (447,151 ) NET INCOME (LOSS) (1,288,205 ) 506,769 (447,151 ) FOREIGN CURRENCY TRANSLATION ADJUSTMENTS - - - COMPREHENSIVE INCOME (LOSS) $ (1,288,205 ) $ 506,769 $ (447,151 ) CHANSON INTERNATIONAL HOLDING PARENT COMPANY STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2022 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (1,288,205 ) $ 506,769 $ (447,151 ) Adjustments to reconcile net cash flows from operating activities: Equity in earnings (loss) of subsidiaries and VIEs 1,288,205 (506,769 ) 447,151 Net cash used in operating activities - - - CHANGES IN CASH - - - CASH, beginning of year - - - CASH, end of year $ - $ - $ - |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission and have been consistently applied. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying consolidated financial statements include the financial statements of the Company and its subsidiaries and the VIEs. All intercompany balances and transactions are eliminated upon consolidation. |
Uses of estimates | Uses of estimates In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, useful lives of property and equipment, the recoverability of long-lived assets, provision necessary for contingent liabilities, and revenue recognition. Actual results could differ from those estimates. |
Cash and cash equivalents | Cash and cash equivalents Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. The Company maintains a significant amount of its bank accounts in the PRC. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. |
Restricted cash | Restricted cash Restricted cash represents funds set aside and placed with the bank and serves as the security deposit which is not available to fund general liquidity needs of the Company. |
Accounts receivable, net | Accounts receivable Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trend. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivable balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income (loss). Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of December 31, 2022 and 2021, there was no allowance recorded as the Company considers all of the accounts receivable fully collectible. |
Leases | Leases The Company follows FASB ASC No. 842, Leases 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 ROU 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 ROU assets are reviewed for impairment annually. There was no impairment for ROU lease assets as of December 31, 2022 and 2021. In response to the large volume of anticipated lease concessions to be granted related to the effects of the COVID-19 pandemic, and the resultant expected cost and complexity of applying the lease modification requirements in Topic 842, the FASB issued Staff Q&A—Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic Due to the COVID-19 pandemic, the Company renegotiated the leases for some of its PRC stores and New York stores. Based on the nature of the agreements reached with the landlords, the Company has accounted for rent concessions as if they were part of the enforceable rights and obligations of the existing lease contracts and did not account for the concessions as lease modifications. As the date of this report, the Company has received a total of lease concessions amounting to $1,081,885, and among which, $341,396, $141,499, and $598,990 was received during the years ended December 31, 2022, 2021, and 2020, respectively. The Company accounted for the concession as negative variable lease payments with a corresponding reduction in the lease liability. The Company has continued to recognize lease expenses on a straight-line basis for its leases over the related lease terms. |
Inventories | Inventories Inventories of the Company consist of ingredient materials, finished goods, packing materials, and other materials. Inventories are stated at the lower of cost or net realizable value, on a weighted average basis. Costs include the cost of ingredient materials, direct labor, and related production overhead. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. The Company periodically evaluates inventories for their net realizable value adjustments, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and expiration dates, as applicable, taking into consideration historical and expected future product sales. For the years ended December 31, 2022, 2021, and 2020, no inventory reserve was recorded because no slow-moving, obsolete, or damaged inventory was identified. |
Property and equipment | Property and equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment are provided using the straight-line method over their expected useful lives, as follows: Useful life Bakery production equipment 5-8 years Office equipment and furniture 3-5 years Transportation vehicles 5 years Leasehold improvement Lesser of useful life and lease term Expenditures for repair and maintenance, which do not materially extend the useful lives of the assets, are charged to expenses as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operations and comprehensive income (loss) in other income or expenses. |
Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets with finite lives, primarily property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There were no impairments of these assets as of December 31, 2022 and 2021. |
Revenue recognition | Revenue recognition The Company follows ASC 606, Revenue from Contracts with Customers The Company currently generates its revenue through its bakery/café stores as well as through online sales. The Company recognizes revenue from bakery/café sales upon delivery of the related food and other products to the customer and fulfillment of all performance obligations. Revenue is recognized net of any discounts, sales incentives, sales taxes, and value added taxes that are collected from customers and remitted to tax authorities. In the PRC Stores, the Company sells membership cards that do not have an expiration date and from which the Company does not deduct non-usage fees from outstanding card balances. Membership cards are reloadable and redeemable at any of the Company’s store locations. Amounts loaded into these cards are initially recorded as deferred revenue. When membership cards are redeemed at stores, the Company recognizes revenue and reduces the deferred revenue. While the Company continues to honor all membership cards presented for payments, management determines the likelihood of redemption to be remote for certain cards with long periods of inactivity (“breakage”), which is five years after the last usage, based upon the Company’s historical redemption patterns. Membership card breakage is recorded as revenue in the consolidated statements of operations and comprehensive income (loss). Membership card breakage was immaterial for the years ended December 31, 2022, 2021, and 2020. In the PRC Stores, the Company maintains a customer loyalty program in which customers earn free cash vouchers when purchasing or reloading membership cards at certain amount. These cash vouchers typically do not expire, except for certain vouchers given out at special occasions, which usually state an expiration date and can only be exchanged for certain seasonal products or specialty cakes. The Company establishes corresponding liabilities in deferred revenue for the membership cards and the free cash vouchers upon issuance. The Company allocates the consideration received proportionately between the membership cards and cash vouchers based on their face values. Revenue is recognized at the allocated amount upon redemption of membership cards and cash vouchers, at which point, the Company delivers products to customers and reduces the deferred revenue. Unredeemed cash vouchers will be recognized as revenue upon their expiration dates, if any, or five years after their issuance if there are no stated expiration dates, when management determines the likelihood of redemption to be remote. Contract balances and remaining performance obligations Contract balances typically arise when a difference in timing between the transfer of control to the customer and receipt of consideration occurs. The Company did not have contract assets as of December 31, 2022 and 2021. The Company’s contract liabilities, which are reflected in its consolidated balance sheets as deferred revenue of $6,958,160 and $6,051,683 as of December 31, 2022 and 2021, respectively, consist primarily of customer payments for the membership cards and the fair value of the cash vouchers under the Company’s customer loyalty programs. These amounts represent the Company’s unsatisfied performance obligations as of the balance sheet dates. The amount of revenue recognized in the years ended December 31, 2022, 2021, and 2020 that was included in the opening deferred revenue was $4,920,442, $4,823,134, and $2,936,748, respectively. As of December 31, 2022, the aggregate amount of unredeemed membership cards and cash vouchers was $6,958,160. The Company will recognize revenue when customers redeem the membership cards or cash vouchers in store purchases. Based on the Company’s historical experience, a significant portion of the redemption is expected to occur during the first two years after December 31, 2022 and the remaining between the third and fifth year. Disaggregation of revenue The Company disaggregates its revenue by geographic areas, as the Company believes it best depicts how the nature, amount, timing, and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenue for the years ended December 31, 2022, 2021, and 2020 is disclosed in Note 14 of the consolidated financial statements. |
Fair value of financial instruments | Fair value of financial instruments 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. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● 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, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. ● Level 3 — inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, short-term bank loans, accounts payable, due to a related party, taxes payable, operating lease liabilities, current and other current liabilities, approximates the fair value of the respective assets and liabilities as of December 31, 2022 and 2021 based upon the short-term nature of the assets and liabilities. The fair value of longer-term operating lease liabilities approximates their recorded values as their stated interest rates approximate the rates currently available. |
Foreign currency translation | Foreign currency translation The functional currency of the Company’s PRC subsidiary and the UFG entities is the Chinese Yuan (“RMB”) and the functional currency of the Company’s U.S. subsidiaries is the U.S. Dollars (“US$”). RMB amounts in the Company’s consolidated financial statements have been translated into the reporting currency US$. Assets and liabilities of the Company are translated at the exchange rate at each reporting period end date. Equity is translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income (loss). Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations. RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: December 31, December 31, December 31, Year-end spot rate US$1=RMB6.8972 US$1=RMB6.3614 US$1=RMB6.5326 Average rate US$1=RMB6.7290 US$1=RMB6.4490 US$1=RMB6.9020 |
Income taxes | Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. 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. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No penalties or interest relating to income taxes were incurred during the years ended December 31, 2022, 2021, and 2020. The Company does not believe there was any uncertain tax provision at December 31, 2022 and 2021. The Company’s operating subsidiary in China is subject to the income tax laws of the PRC. The Company’s operating subsidiary in United States is subject to the tax law of the United States. As of December 31, 2022, the tax years ended December 31, 2018 through December 31, 2022 for the Company’s PRC subsidiary remain open for statutory examination by PRC tax authorities, and the tax years ended December 31, 2020 through December 31, 2022 for the Company’s United States subsidiary remain open for statutory examination by U.S. tax authorities. |
Value added tax (“VAT”) | Value added tax (“VAT”) The Company’s subsidiary Xinjiang United Family and its three branch offices are general tax payers. The applicable VAT rate is 13% based on the Chinese tax law. VAT is reported as a deduction to revenue when incurred. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. The UFG entities were formed as individually-owned businesses, which are generally subject to a lower VAT rate of 3% and the local PRC tax authority has the jurisdiction to assess and determine their VAT obligation or exemption on a case-by-case basis. Before April 1, 2021, 16 of the UFG entities were exempted from paying VAT while nine of these UFG entities were subject to VAT rate of 3% as determined by the local tax authority. From April 1, 2021 to December 31, 2022, based on the new tax regulation, individually-owned businesses whose monthly deemed Taxable Net Income (“TNI”) is less than RMB150,000 are exempted from paying VAT. All but one of the UFG entities are currently exempted from paying VAT, since the deemed TNI of each of these UFG entities is currently less than RMB150,000. Their VAT eligibility is subject to periodical reassessment, and they may lose or regain the exemption status as determined by the tax authorities on a case-by-case basis. |
Earnings (loss) per share | Earnings (loss) per share The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, Earnings per Share |
Comprehensive income (loss) | Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). The foreign currency translation gain (loss) resulting from the translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of operations and comprehensive income (loss). |
Risks and uncertainties | Risks and uncertainties Political and economic risk The operations of the Company are located in the PRC and United States. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC and United States, as well as by the general state of the PRC and United States economy. The Company’s results may be adversely affected by changes in the political, regulatory, and social conditions in the PRC and United States. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, such experience may not be indicative of future results. Foreign currency exchange risk A majority of the Company’s revenue and expense transactions are denominated in RMB and most of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to effect the remittance. Credit risk As of December 31, 2022 and 2021, $2,747,940 and $3,647,342 of the Company’s cash was on deposit at financial institutions in the PRC where there currently is no rule or regulation requiring such financial institutions to maintain insurance to cover bank deposits in the event of bank failure. As of December 31, 2022 and 2021, $115,452 and $162,018 of the Company’s cash was on deposit at financial institutions in the U.S. which were insured by the Federal Deposit Insurance Corporation subject to certain limitations. The Company has not experienced any losses in such accounts. For the years ended December 31, 2022, 2021, and 2020, the Company’s substantial assets were located in the PRC and the U.S. and the Company’s substantial revenue was derived from its subsidiaries and the UFG entities located in the PRC and the U.S. Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. Concentrations No single customer accounted for more than 10% of the Company’s revenue for the years ended December 31, 2022, 2021, and 2020. As of December 31, 2022, one customer accounted for 11.7% of the Company’s total accounts receivable balance. As of December 31, 2021, one customer accounted for 11.6% of the Company’s total accounts receivable balance. For the year ended December 31, 2022, no supplier accounted for more than 10% of the Company’s total purchases. For the years ended December 31, 2021 and 2020, one supplier accounted for 14.7% and 21.5% of the Company’s total purchases, respectively. |
Recent accounting pronouncements | Recent accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses,” which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Further, the FASB issued ASU No. 2019-04, ASU 2019-05, ASU 2019-10, ASU 2019-11, and ASU 2020-02 to provide additional guidance on the credit losses standard. The new effective date for SEC filers that are eligible to be smaller reporting companies under the SEC’s definition, as well as private companies and not-for-profit entities is for annual and interim periods in fiscal years beginning after December 15, 2022. Adoption of the ASUs is on a modified retrospective basis. The Company adopted ASU 2016-13 on January 1, 2023, and the adoption of this ASU did not have a material impact on its consolidated financial statements. Except for the above-mentioned pronouncement, there are no new recently issued accounting standards that will have material impact on the Company’s consolidated financial position, statements of operations, and cash flows. |
Organization and Business Des_2
Organization and Business Description (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization and Business Description [Abstract] | |
Schedule of consolidated financial statements | Name of Entity Date of Place of % of Principal Activities Chanson International July 26, 2019 Cayman Islands Parent, 100% Investment holding Deen Global August 13, 2019 British Virgin Islands 100% Investment holding Jenyd September 13, 2019 Hong Kong 100% Investment holding Xinjiang United Family August 7, 2009 PRC 100% Consultancy and information technology support; sells bakery products to customers 29 UFG entities 2012 to 2023 PRC VIEs Sells bakery products to customers Chanson NY April 17, 2015 New York 100% Holding company. Consultancy and information technology support Chanson 23rd Street December 18, 2015 New York 100% Eat-in services and bakery products and beverage products Chanson Greenwich February 20, 2020 New York 100% Eat-in services and bakery products and beverage products Chanson Management LLC April 21, 2021 Delaware 100% Consultancy and management support Chanson 3rd Ave August 5, 2021 New York 100% Eat-in services and bakery products and beverage products Chanson Broadway March 21, 2022 New York 100% Newly incorporated – not in operation yet |
Schedule of balance sheet of the UFG entities | December 31, 2022 December 31, 2021 Current assets $ 7,123,635 $ 6,574,394 Non-current assets 4,078,979 6,191,804 Total assets $ 11,202,614 $ 12,766,198 Current liabilities $ 5,858,647 $ 6,619,273 Non-current liabilities 1,448,744 2,362,218 Total liabilities $ 7,307,391 $ 8,981,491 |
Schedule of operation of the UFG entities | For the Years Ended December 31, 2022 2021 2020 Net revenue $ 5,198,990 $ 8,251,610 $ 7,831,994 Net income $ 829,557 $ 1,875,684 $ 1,288,630 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment are stated at cost less | Useful life Bakery production equipment 5-8 years Office equipment and furniture 3-5 years Transportation vehicles 5 years Leasehold improvement Lesser of useful life and lease term |
Schedule of currency exchange rates | December 31, December 31, December 31, Year-end spot rate US$1=RMB6.8972 US$1=RMB6.3614 US$1=RMB6.5326 Average rate US$1=RMB6.7290 US$1=RMB6.4490 US$1=RMB6.9020 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounts Receivable, Net [Abstract] | |
Schedule of accounts receivable, net | December 31, 2022 December 31, Accounts receivable $ 1,260,453 $ 1,134,532 Less: allowance for doubtful accounts - - Accounts receivable, net $ 1,260,453 $ 1,134,532 |
Prepaid Expenses And Other Cu_2
Prepaid Expenses And Other Current Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of prepaid expenses and other current assets | December 31, 2022 December 31, Advance to suppliers (1) $ 512,900 $ 70,228 Prepaid expenses (2) 217,064 257,479 Other receivables (3) 103,274 110,338 Less: allowance for doubtful accounts - - Prepaid expenses and other current assets, net $ 833,238 $ 438,045 (1) Advance to suppliers primarily consists of advance payments paid to suppliers for purchases of raw materials for bakery products. (2) Prepaid expenses primarily represent prepaid rental expenses and other miscellaneous expenses for the Company’s bakery stores. (3) Other receivables are mainly business advances to officers and staff for business travel and sundry expenses. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory [Abstract] | |
Schedule of inventories | December 31, 2022 December 31, Ingredient materials $ 540,689 $ 418,247 Package and other materials 60,904 38,959 Finished goods 91,913 69,656 Total inventories $ 693,506 $ 526,862 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of operating lease related assets and liabilities recorded on the balance sheets | December 31, 2022 December 31, ROU lease assets $ 13,921,825 $ 11,644,192 Operating lease liabilities – current $ 1,770,398 $ 1,622,642 Operating lease liabilities – non-current 12,620,070 9,846,224 Total operating lease liabilities $ 14,390,468 $ 11,468,866 |
Schedule of weighted average remaining lease terms and discount rates for all of operating leases | December 31, 2022 December 31, Remaining lease term and discount rate: Weighted average remaining lease term (years) 8.53 7.22 Weighted average discount rate * 4.35 % 4.87 % * The Company used incremental borrowing rate of 6.98% for its lease contracts entered prior to fiscal year 2022 in the PRC, and for lease contracts entered in fiscal year 2022, the Company used new incremental borrowing rate of 3.95%. The Company used incremental borrowing rate 3.75% for its lease contracts in the United States. |
Schedule of maturities of lease liabilities | 2023 $ 2,433,761 2024 2,151,340 2025 1,924,110 2026 1,793,273 2027 1,761,804 Thereafter 7,478,878 Total lease payments 17,543,166 Less: imputed interest (3,152,698 ) Present value of lease liabilities $ 14,390,468 |
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, 2022 December 31, Bakery production equipment $ 1,618,358 $ 1,333,182 Automobiles 85,149 65,471 Office equipment and furniture 596,579 509,426 Leasehold improvements 6,289,217 4,307,500 Construction in progress* - 1,337,565 Subtotal 8,589,303 7,553,144 Less: accumulated depreciation (2,717,528 ) (2,105,426 ) Property and equipment, net $ 5,871,775 $ 5,447,718 * The Company constructed a new central factory in Urumqi, Xinjiang, to expand the production capacity of its PRC Stores. The investment budget for the new central factory is approximately RMB18.1 million (approximately $2.6 million) after VAT deduction. The construction has two stages. The first stage includes: 1) construction and renovation that cost approximately RMB13.1 million (approximately $1.9 million); 2) installation of production equipment of approximately RMB1.4 million (approximately $0.2 million); and 3) miscellaneous projects of approximately RMB1.1 million (approximately $0.1 million). The first stage of the construction was completed in June 2022, and the Company started production in the new central factory in August 2022. The second stage is expected to start in the second half of 2023, and includes construction of two new production lines of approximately RMB2.5 million (approximately $0.4 million). |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax [Abstract] | |
Schedule of components of the income tax provision | For the Years Ended December 31, 2022 2021 2020 Current tax provision Cayman Islands $ - $ - $ - BVI - - - Hong Kong - - - PRC 9,547 16,277 14,584 United States - - - $ 9,547 $ 16,277 $ 14,584 Deferred tax provision Cayman Islands $ - $ - $ - BVI - - - Hong Kong - - - PRC - - - United States - - - - - - Income tax provisions $ 9,547 $ 16,277 $ 14,584 |
Schedule of deferred tax assets net | December 31, December 31, Net operating loss $ 2,500,664 $ 1,802,625 Total deferred tax assets 2,500,664 1,802,625 Valuation allowance (2,500,664 ) (1,802,625 ) Deferred tax assets, net $ - $ - |
Schedule of income(loss) before provision for income taxes | For the Years Ended December 31, 2022 2021 2020 PRC $ 933,868 $ 2,044,086 $ 1,491,960 US (2,212,526 ) (1,521,040 ) (1,641,405 ) Total Income (Loss) before Income Taxes $ (1,278,658 ) $ (523,046 ) $ 149,445 |
Schedule of income(loss) before provision for income taxes | For the Years Ended December 31, 2022 2021 2020 Income tax expense (benefit) computed based on PRC statutory rate $ (319,664 ) $ 130,761 $ (37,361 ) Favorable tax rate and tax exemption impact in PRC entities (a) (223,920 ) (494,744 ) (358,406 ) Effect of rate differential for U.S. subsidiaries 88,501 60,842 65,656 Change in valuation allowance 464,630 319,418 344,695 Actual income tax provision $ 9,547 $ 16,277 $ 14,584 (a) During the years ended December 31, 2022 and 2021, the Company’s subsidiary, Xinjiang United Family, and its three branch offices, were subject to a favorable tax rate of 2.5%. During the year ended December 31, 2020, the Company’s subsidiary, Xinjiang United Family, and its three branch offices, were subject to a favorable tax rate of 5.0%. For the year ended December 31, 2022, 13 of these UFG entities were subject to income tax assessed at 0.5% of TNI that ranged from RMB33,000 to RMB180,000 per month. For the year ended December 31, 2021, 13 of these UFG entities were subject to income tax assessed at 0.5% of TNI that ranged from RMB25,000 to RMB180,000 per month. During the year ended December 31, 2020, 11 of the UFG entities were subject to income tax assessed at 1% of TNI ranging from RMB33,000 to RMB120,000 per month. The rest of the UFG entities were exempted from paying income tax. For the years ended December 31, 2022, 2021, and 2020, the tax saving as the result of the favorable tax rates and tax exemption amounted to $223,920, $494,744, and $358,406, respectively, and per share effect of the favorable tax rate and tax exemption was $0.02, $0.05, and $0.04, respectively. |
Schedule of taxes payable | December 31, 2022 December 31, Income tax payable (recoverable) $ (3,404 ) $ 1,463 Value added tax payable 93,924 4,850 Other taxes payable 40,207 24,526 Total taxes payable $ 130,727 $ 30,839 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment information | For the Year Ended December 31, 2022 China United Total Revenue $ 9,491,208 $ 3,780,867 $ 13,272,075 Cost of revenue 5,080,616 2,088,788 7,169,404 Gross profit $ 4,410,592 $ 1,692,079 $ 6,102,671 Net income (loss) $ 924,321 $ (2,212,526 ) $ (1,288,205 ) Interest expense $ (35,457 ) $ - $ (35,457 ) Provision for income tax $ 9,547 $ - $ 9,547 Depreciation and amortization $ 385,736 $ 315,725 $ 701,461 Capital expenditures $ 671,965 $ 188,069 $ 860,034 For the Year Ended December 31, 2021 China United Total Revenue $ 12,796,089 $ 1,894,206 $ 14,690,295 Cost of revenue 6,582,462 1,177,410 7,759,872 Gross profit $ 6,213,627 $ 716,796 $ 6,930,423 Net income (loss) $ 2,027,809 $ (1,521,040 ) $ 506,769 Interest expense $ (98,033 ) $ - $ (98,033 ) Provision for income tax $ 16,277 $ - $ 16,277 Depreciation and amortization $ 317,702 $ 287,551 $ 605,253 Capital expenditures $ 1,096,051 $ 942,003 $ 2,038,054 For the Year Ended December 31, 2020 China United Total Revenue $ 8,973,742 $ 1,339,770 $ 10,313,512 Cost of revenue 4,410,288 753,890 5,164,178 Gross profit $ 4,563,454 $ 585,880 $ 5,149,334 Net income (loss) $ 1,477,377 $ (1,641,406 ) $ (164,029 ) Interest expense $ (108,852 ) $ - $ (108,852 ) Provision for income tax $ 14,584 $ - $ 14,584 Depreciation and amortization $ 276,981 $ 208,845 $ 485,826 Capital expenditures $ 262,284 $ 312,049 $ 574,333 |
Schedule of total assets and Liabilities | December 31, 2022 December 31, Total assets: China $ 11,704,732 $ 12,625,783 United Stated 15,624,454 12,370,311 Total assets $ 27,329,186 $ 24,996,094 Total liabilities: China $ 12,102,414 $ 13,163,745 United Stated 14,049,723 8,997,390 Total liabilities $ 26,152,137 $ 22,161,135 |
Condensed Financial Informati_2
Condensed Financial Information of the Parent Company (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule of Parent Company Balance Sheets [Abstract] | |
Schedule of parent company balance sheets | December 31, 2022 December 31, ASSETS Current assets Intercompany receivable $ 9,000 $ 9,000 Total current assets 9,000 9,000 Non-current assets Loss from investment in subsidiaries $ (5,634,277 ) $ (4,346,072 ) Total assets $ (5,625,277 ) $ (4,337,072 ) LIABILITIES AND SHAREHOLDERS’ DEFICIT LIABILITIES $ - $ - COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ DEFICIT Ordinary shares, $0.001 par value, 50,000,000 shares authorized; 9,000,000 shares issued and outstanding as of December 31, 2022 and 2021: Class A ordinary share, $0.001 par value, 44,000,000 shares authorized; 3,060,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively 3,060 3,060 Class B ordinary share, $0.001 par value, 6,000,000 shares authorized; 5,940,000 shares issued and outstanding as of December 31, 2022 and 2021 5,940 5,940 Additional paid-in capital - - Accumulated deficit (5,634,277 ) $ (4,346,072 ) Accumulated other comprehensive income - - Total shareholders’ deficit (5,625,277 ) $ (4,337,072 ) Total liabilities and shareholders’ deficit $ (5,625,277 ) $ (4,337,072 ) |
Schedule of parent company statements of operations and comprehensive income (loss) | For the Years Ended December 31, 2022 2021 2020 EQUITY IN EARNINGS (LOSS) OF SUBSIDIARIES AND VIES $ (1,288,205 ) $ 506,769 $ (447,151 ) NET INCOME (LOSS) (1,288,205 ) 506,769 (447,151 ) FOREIGN CURRENCY TRANSLATION ADJUSTMENTS - - - COMPREHENSIVE INCOME (LOSS) $ (1,288,205 ) $ 506,769 $ (447,151 ) |
Schedule of parent company statements of cash flows | For the Years Ended December 31, 2022 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (1,288,205 ) $ 506,769 $ (447,151 ) Adjustments to reconcile net cash flows from operating activities: Equity in earnings (loss) of subsidiaries and VIEs 1,288,205 (506,769 ) 447,151 Net cash used in operating activities - - - CHANGES IN CASH - - - CASH, beginning of year - - - CASH, end of year $ - $ - $ - |
Organization and Business Des_3
Organization and Business Description (Details) $ / shares in Units, ¥ in Millions | 12 Months Ended | |||||||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Apr. 03, 2023 $ / shares shares | Sep. 27, 2020 | Sep. 13, 2019 | Aug. 13, 2019 | Aug. 07, 2009 USD ($) | Aug. 07, 2009 CNY (¥) | |
Organization and Business Description (Details) [Line Items] | ||||||||
Registered capital | $ 880,000 | ¥ 6 | ||||||
Revenue-producing assets | $ 1,626,516 | $ 1,692,838 | ||||||
Accumulated depreciation | 934,222 | 762,803 | ||||||
Property, plant and equipment net | 692,294 | 930,035 | ||||||
Deen Global [Member] | ||||||||
Organization and Business Description (Details) [Line Items] | ||||||||
Equity interest percentage | 100% | 100% | ||||||
Xinjiang United Family [Member] | ||||||||
Organization and Business Description (Details) [Line Items] | ||||||||
Equity interest percentage | 100% | |||||||
Forecast [Member] | ||||||||
Organization and Business Description (Details) [Line Items] | ||||||||
Ordinary shares (in Shares) | shares | 3,390,000 | |||||||
Offering price per share (in Dollars per share) | $ / shares | $ 4 | |||||||
Bakery production equipment [Member] | ||||||||
Organization and Business Description (Details) [Line Items] | ||||||||
Revenue-producing assets | 422,226 | 323,931 | ||||||
Office equipment and furniture [Member] | ||||||||
Organization and Business Description (Details) [Line Items] | ||||||||
Revenue-producing assets | 75,555 | 63,643 | ||||||
Leasehold Improvements [Member] | ||||||||
Organization and Business Description (Details) [Line Items] | ||||||||
Revenue-producing assets | $ 1,128,735 | $ 1,305,264 |
Organization and Business Des_4
Organization and Business Description (Details) - Schedule of consolidated financial statements | 12 Months Ended |
Dec. 31, 2022 | |
Chanson International [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | July 26, 2019 |
Place of Incorporation | Cayman Islands |
% of Ownership | Parent, 100% |
Principal Activities | Investment holding |
Deen Global [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | August 13, 2019 |
Place of Incorporation | British Virgin Islands |
% of Ownership | 100% |
Principal Activities | Investment holding |
Jenyd [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | September 13, 2019 |
Place of Incorporation | Hong Kong |
% of Ownership | 100% |
Principal Activities | Investment holding |
Xinjiang United Family [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | August 7, 2009 |
Place of Incorporation | PRC |
% of Ownership | 100% |
Principal Activities | Consultancy and information technology support; sells bakery products to customers |
29 UFG entities [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | 2012 to 2023 |
Place of Incorporation | PRC |
% of Ownership | VIEs |
Principal Activities | Sells bakery products to customers |
Chanson NY [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | April 17, 2015 |
Place of Incorporation | New York |
% of Ownership | 100% |
Principal Activities | Holding company. Consultancy and information technology support |
Chanson 23rd Street [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | December 18, 2015 |
Place of Incorporation | New York |
% of Ownership | 100% |
Principal Activities | Eat-in services and bakery products and beverage products |
Chanson Greenwich [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | February 20, 2020 |
Place of Incorporation | New York |
% of Ownership | 100% |
Principal Activities | Eat-in services and bakery products and beverage products |
Chanson Management LLC [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | April 21, 2021 |
Place of Incorporation | Delaware |
% of Ownership | 100% |
Principal Activities | Consultancy and management support |
Chanson 3rd Ave [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | August 5, 2021 |
Place of Incorporation | New York |
% of Ownership | 100% |
Principal Activities | Eat-in services and bakery products and beverage products |
Chanson Broadway [Member] | |
Condensed Financial Statements, Captions [Line Items] | |
Date of Incorporation | March 21, 2022 |
Place of Incorporation | New York |
% of Ownership | 100% |
Principal Activities | Newly incorporated – not in operation yet |
Organization and Business Des_5
Organization and Business Description (Details) - Schedule of balance sheet of the UFG entities - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Balance Sheet of the UFG Entities [Abstract] | ||
Current assets | $ 7,123,635 | $ 6,574,394 |
Non-current assets | 4,078,979 | 6,191,804 |
Total assets | 11,202,614 | 12,766,198 |
Current liabilities | 5,858,647 | 6,619,273 |
Non-current liabilities | 1,448,744 | 2,362,218 |
Total liabilities | $ 7,307,391 | $ 8,981,491 |
Organization and Business Des_6
Organization and Business Description (Details) - Schedule of operation of the UFG entities - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Operation of the UFG Entities [Abstract] | |||
Net revenue | $ 5,198,990 | $ 8,251,610 | $ 7,831,994 |
Net income | $ 829,557 | $ 1,875,684 | $ 1,288,630 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Lease received | $ 1,081,885 | |||
Lease concessions amount | 341,396 | $ 141,499 | $ 598,990 | |
Deferred revenue | 6,958,160 | 6,051,683 | ||
Opening deferred revenue | 4,920,442 | 4,823,134 | $ 2,936,748 | |
Aggregated amount | $ 6,958,160 | |||
Tax benefit amount | 50% | 50% | ||
VAT tax rate | 3% | 3% | ||
Taxable net income (in Yuan Renminbi) | ¥ | ¥ 150,000 | |||
Cash | $ 2,747,940 | 3,647,342 | ||
Federal deposit insurance corporation | $ 115,452 | $ 162,018 | ||
Company revenue percentage | 10% | 10% | 10% | |
Total purchases percentage | 10% | 10% | 14.70% | 21.50% |
One Customer [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Accounts receivable percentage | 11.70% | 11.70% | 11.60% | |
Value Added Tax [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
VAT tax rate | 13% | 13% | ||
Taxable net income (in Yuan Renminbi) | ¥ | ¥ 150,000 | |||
Local PRC Tax Authority [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
VAT tax rate | 3% | 3% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment are stated at cost less | 12 Months Ended |
Dec. 31, 2022 | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Leasehold improvement | Lesser of useful life and lease term |
Bakery production equipment [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Bakery production equipment [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 8 years |
Office equipment and furniture [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Office equipment and furniture [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Transportation vehicles [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of currency exchange rates | 12 Months Ended | |||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 CNY (¥) | |
Year-end spot rate [Member] | ||||||
Summary of Significant Accounting Policies (Details) - Schedule of currency exchange rates [Line Items] | ||||||
Foreign currency translation | $ 1 | ¥ 6.8972 | $ 1 | ¥ 6.3614 | $ 1 | ¥ 6.5326 |
Average rate [Member] | ||||||
Summary of Significant Accounting Policies (Details) - Schedule of currency exchange rates [Line Items] | ||||||
Foreign currency translation | $ 1 | ¥ 6.729 | $ 1 | ¥ 6.449 | $ 1 | ¥ 6.902 |
Liquidity (Details)
Liquidity (Details) - USD ($) | 12 Months Ended | |||||
Apr. 03, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | [1] | ||
Liquidity (Details) [Line Items] | ||||||
Net income (loss) | $ (1,288,205) | $ 506,769 | [1] | $ (164,029) | ||
Operating activities | 600,000 | 1,800,000 | ||||
Cash and cash equivalents decreased | 981,342 | 201,734 | ||||
Working capital | 7,100,000 | |||||
Deferred revenue | 7,000,000 | |||||
Realizes deferred revenue | 2,800,000 | |||||
Cash | $ 2,900,000 | |||||
Decreased percentage | 9.70% | |||||
Incurred net loss | $ 1,300,000 | |||||
Net proceeds | 12,000,000 | |||||
Consolidated Financial Statements [Member] | ||||||
Liquidity (Details) [Line Items] | ||||||
Net income (loss) | $ 1,300,000 | $ 500,000 | ||||
Forecast [Member] | ||||||
Liquidity (Details) [Line Items] | ||||||
Initial public offering (in Shares) | 3,390,000 | |||||
Offering price per shares (in Dollars per share) | $ 4 | |||||
Total gross proceeds | $ 13,600,000 | |||||
[1]Retrospectively restated for effect of 1,000-for-1 forward split and share issuances on March 27, 2021 (see Note 12) |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Accounts Receivable, Net [Abstract] | |
Financial statements accounts receivable | 44% |
Financial statements accounts receivable | $ 0.6 |
Remaining balance | $ 0.7 |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details) - Schedule of accounts receivable, net - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Accounts Receivable Net [Abstract] | ||
Accounts receivable | $ 1,260,453 | $ 1,134,532 |
Less: allowance for doubtful accounts | ||
Accounts receivable, net | $ 1,260,453 | $ 1,134,532 |
Prepaid Expenses And Other Cu_3
Prepaid Expenses And Other Current Assets, Net (Details) - Schedule of prepaid expenses and other current assets - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Schedule of prepaid expenses and other current assets [Abstract] | |||
Advance to suppliers | [1] | $ 512,900 | $ 70,228 |
Prepaid expenses | [2] | 217,064 | 257,479 |
Other receivables | [3] | 103,274 | 110,338 |
Less: allowance for doubtful accounts | |||
Prepaid expenses and other current assets, net | $ 833,238 | $ 438,045 | |
[1]Advance to suppliers primarily consists of advance payments paid to suppliers for purchases of raw materials for bakery products.[2]Prepaid expenses primarily represent prepaid rental expenses and other miscellaneous expenses for the Company’s bakery stores.[3]Other receivables are mainly business advances to officers and staff for business travel and sundry expenses. |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventories - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Inventories [Abstract] | ||
Ingredient materials | $ 540,689 | $ 418,247 |
Package and other materials | 60,904 | 38,959 |
Finished goods | 91,913 | 69,656 |
Total inventories | $ 693,506 | $ 526,862 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases (Details) [Line Items] | |||
Leases with initial term | 12 months | ||
Incremental borrowing rate | 3.95% | ||
Total operating lease expenses | $ 2,333,412 | $ 2,636,019 | $ 1,749,258 |
Minimum [Member] | |||
Leases (Details) [Line Items] | |||
Operating leases, with terms | 1 year | ||
Incremental borrowing rate | 6.98% | ||
Maximum [Member] | |||
Leases (Details) [Line Items] | |||
Operating leases, with terms | 15 years | ||
Incremental borrowing rate | 3.75% |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating lease related assets and liabilities recorded on the balance sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Operating Lease Related Assets and Liabilities Recorded on the Balance Sheets [Abstract] | ||
ROU lease assets | $ 13,921,825 | $ 11,644,192 |
Operating lease liabilities – current | 1,770,398 | 1,622,642 |
Operating lease liabilities – non-current | 12,620,070 | 9,846,224 |
Total operating lease liabilities | $ 14,390,468 | $ 11,468,866 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of weighted average remaining lease terms and discount rates for all of operating leases | Dec. 31, 2022 | Dec. 31, 2021 | |
Remaining lease term and discount rate: | |||
Weighted average remaining lease term (years) | 8 years 6 months 10 days | 7 years 2 months 19 days | |
Weighted average discount rate | [1] | 4.35% | 4.87% |
[1] The Company used incremental borrowing rate of 6.98% for its lease contracts entered prior to fiscal year 2022 in the PRC, and for lease contracts entered in fiscal year 2022, the Company used new incremental borrowing rate of 3.95%. The Company used incremental borrowing rate 3.75% for its lease contracts in the United States. |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of maturities of lease liabilities | Dec. 31, 2022 USD ($) |
Schedule of Maturities of Lease Liabilities [Abstract] | |
2023 | $ 2,433,761 |
2024 | 2,151,340 |
2025 | 1,924,110 |
2026 | 1,793,273 |
2027 | 1,761,804 |
Thereafter | 7,478,878 |
Total lease payments | 17,543,166 |
Less: imputed interest | (3,152,698) |
Present value of lease liabilities | $ 14,390,468 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) | 12 Months Ended | |||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 CNY (¥) | |
Property, Plant and Equipment [Abstract] | ||||||
Investment budget | $ 2,600,000 | ¥ 18,100,000 | ||||
Construction and renovation | 1,900,000 | ¥ 13,100,000 | ||||
Production equipment | 200,000 | 1,400,000 | ||||
Miscellaneous projects | 100,000 | ¥ 1,100,000 | ||||
Constructions payments | 0.4 | ¥ 2.5 | ||||
Depreciation expenses | $ 701,461 | $ 605,253 | $ 485,826 | |||
Total cost | $ 10 | ¥ 319,832 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of property and equipment net - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Property and Equipment Net [Abstract] | |||
Bakery production equipment | $ 1,618,358 | $ 1,333,182 | |
Automobiles | 85,149 | 65,471 | |
Office equipment and furniture | 596,579 | 509,426 | |
Leasehold improvements | 6,289,217 | 4,307,500 | |
Construction in progress | [1] | 1,337,565 | |
Subtotal | 8,589,303 | 7,553,144 | |
Less: accumulated depreciation | (2,717,528) | (2,105,426) | |
Property and equipment, net | $ 5,871,775 | $ 5,447,718 | |
[1] The Company constructed a new central factory in Urumqi, Xinjiang, to expand the production capacity of its PRC Stores. The investment budget for the new central factory is approximately RMB18.1 million (approximately $2.6 million) after VAT deduction. The construction has two stages. The first stage includes: 1) construction and renovation that cost approximately RMB13.1 million (approximately $1.9 million); 2) installation of production equipment of approximately RMB1.4 million (approximately $0.2 million); and 3) miscellaneous projects of approximately RMB1.1 million (approximately $0.1 million). The first stage of the construction was completed in June 2022, and the Company started production in the new central factory in August 2022. The second stage is expected to start in the second half of 2023, and includes construction of two new production lines of approximately RMB2.5 million (approximately $0.4 million). |
Short-Term Bank Loans (Details)
Short-Term Bank Loans (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | |||||
May 31, 2021 USD ($) | May 31, 2021 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 23, 2022 USD ($) | Dec. 23, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Short-Term Bank Loans (Details) [Line Items] | |||||||
Working capital | $ (434,959) | ¥ 3 | |||||
Incurred interest expense | $ 37,277 | $ 98,033 | $ 108,852 | ||||
Short-term bank loans [Member] | |||||||
Short-Term Bank Loans (Details) [Line Items] | |||||||
Working capital | $ (1,559,314) | ¥ 10 | |||||
Interest rate, percentage | 5.54% | 5.54% | 3.95% |
Related Party Transactions (Det
Related Party Transactions (Details) | Dec. 31, 2022 USD ($) |
Mr. Gang Li [Member] | |
Related Party Transactions (Details) [Line Items] | |
Due to related party | $ 1,798,605 |
Taxes (Details)
Taxes (Details) | 12 Months Ended | ||||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2022 HKD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 CNY (¥) | |
Taxes (Details) [Line Items] | |||||||
Tax rate | 3% | 3% | 3% | ||||
Income tax rate | 25% | 25% | 25% | ||||
Enterprise Income Tax, description | During the years ended December 31, 2022, 2021, and 2020, Xinjiang United Family and all its three branch offices qualified as small-scaled minimal profit enterprises. Based on the EIT Law of PRC, and according to the Announcement on Issues Related to the Implementation of Inclusive Income Tax Reduction and Exemption Policy for Small and Low Profit Enterprises issued by the State Administration of Taxation on January 18, 2019, from January 1, 2019 to December 31, 2021, once an enterprise meets certain requirements and is identified as a small-scale minimal profit enterprise, the portion of its taxable income not more than RMB1 million is subject to a reduced rate of 5% and the portion between RMB1 million and RMB3 million is subject to a reduced rate of 10%. Furthermore, according to the Announcement on Implementing the Preferential Income Tax Policies for Small-Scale Minimal Profit Enterprise and Individually-Owned Businesses on April 2, 2021, the portion of its taxable income not more than RMB1 million is further reduced to 2.5% during the period from January 1, 2021 to December 31, 2022 and the portion between RMB1 million and RMB3 million remained at a reduced rate of 10%. | During the years ended December 31, 2022, 2021, and 2020, Xinjiang United Family and all its three branch offices qualified as small-scaled minimal profit enterprises. Based on the EIT Law of PRC, and according to the Announcement on Issues Related to the Implementation of Inclusive Income Tax Reduction and Exemption Policy for Small and Low Profit Enterprises issued by the State Administration of Taxation on January 18, 2019, from January 1, 2019 to December 31, 2021, once an enterprise meets certain requirements and is identified as a small-scale minimal profit enterprise, the portion of its taxable income not more than RMB1 million is subject to a reduced rate of 5% and the portion between RMB1 million and RMB3 million is subject to a reduced rate of 10%. Furthermore, according to the Announcement on Implementing the Preferential Income Tax Policies for Small-Scale Minimal Profit Enterprise and Individually-Owned Businesses on April 2, 2021, the portion of its taxable income not more than RMB1 million is further reduced to 2.5% during the period from January 1, 2021 to December 31, 2022 and the portion between RMB1 million and RMB3 million remained at a reduced rate of 10%. | During the years ended December 31, 2022, 2021, and 2020, Xinjiang United Family and all its three branch offices qualified as small-scaled minimal profit enterprises. Based on the EIT Law of PRC, and according to the Announcement on Issues Related to the Implementation of Inclusive Income Tax Reduction and Exemption Policy for Small and Low Profit Enterprises issued by the State Administration of Taxation on January 18, 2019, from January 1, 2019 to December 31, 2021, once an enterprise meets certain requirements and is identified as a small-scale minimal profit enterprise, the portion of its taxable income not more than RMB1 million is subject to a reduced rate of 5% and the portion between RMB1 million and RMB3 million is subject to a reduced rate of 10%. Furthermore, according to the Announcement on Implementing the Preferential Income Tax Policies for Small-Scale Minimal Profit Enterprise and Individually-Owned Businesses on April 2, 2021, the portion of its taxable income not more than RMB1 million is further reduced to 2.5% during the period from January 1, 2021 to December 31, 2022 and the portion between RMB1 million and RMB3 million remained at a reduced rate of 10%. | ||||
Income tax assessed rate | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 1% | 1% |
Total tax exemption (in Dollars) | $ 15,711 | $ 15,001 | $ 3,480 | ||||
Federal income tax rate | 21% | 21% | 21% | ||||
Cumulative NOL (in Dollars) | $ 2,882,465 | $ 9,695,396 | |||||
Allowance for deferred tax assets | 100% | 100% | 100% | 100% | 100% | ||
Favorable tax rate | 2.50% | 2.50% | 2.50% | 2.50% | 2.50% | 5% | 5% |
Tax rates and tax exemption amount (in Dollars) | $ 223,920 | $ 494,744 | $ 358,406 | ||||
Tax exemption rate | 0.02% | 0.02% | 0.02% | 0.05% | 0.05% | 0.04% | 0.04% |
Minimum [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Income tax fixed-rate | 0.50% | ||||||
Income tax assessed (in Yuan Renminbi) | ¥ | ¥ 180,000 | ¥ 180,000 | ¥ 120,000 | ||||
Maximum [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Income tax assessed (in Yuan Renminbi) | ¥ | ¥ 33,000 | ¥ 25,000 | ¥ 33,000 | ||||
Hong Kong [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Tax rate | 8.25% | 8.25% | 8.25% | ||||
Assessable profit percentage | 16.50% | 16.50% | 16.50% | ||||
Hong Kong [Member] | Minimum [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Assessable profits (in Dollars) | $ 2,000,000 | ||||||
Hong Kong [Member] | Maximum [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Assessable profits (in Dollars) | $ 2,000,000 | ||||||
U.S. [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Cumulative NOL (in Dollars) | $ 11,907,922 | ||||||
Additional NOL (in Dollars) | $ 2,212,526 | ||||||
UFG entities [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Income tax assessed rate | 0.50% | 0.50% | 0.50% | 0.50% | 0.50% | 1% | 1% |
UFG entities [Member] | Minimum [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Income tax assessed (in Yuan Renminbi) | ¥ | ¥ 180,000 | ¥ 180,000 | ¥ 120,000 | ||||
UFG entities [Member] | Maximum [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Income tax assessed (in Yuan Renminbi) | ¥ | ¥ 33,000 | ¥ 25,000 | ¥ 33,000 |
Taxes (Details) - Schedule of c
Taxes (Details) - Schedule of components of the income tax provision - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current tax provision | |||
Current tax provision | $ 9,547 | $ 16,277 | $ 14,584 |
Deferred tax provision | |||
Deferred tax provision | |||
Income tax provisions | 9,547 | 16,277 | 14,584 |
Cayman Islands [Member] | |||
Current tax provision | |||
Current tax provision | |||
Deferred tax provision | |||
Deferred tax provision | |||
BVI [Member] | |||
Current tax provision | |||
Current tax provision | |||
Deferred tax provision | |||
Deferred tax provision | |||
Hong Kong [Member] | |||
Current tax provision | |||
Current tax provision | |||
Deferred tax provision | |||
Deferred tax provision | |||
PRC [Member] | |||
Current tax provision | |||
Current tax provision | 9,547 | 16,277 | 14,584 |
Deferred tax provision | |||
Deferred tax provision | |||
United States [Member] | |||
Current tax provision | |||
Current tax provision | |||
Deferred tax provision | |||
Deferred tax provision | |||
Income tax provisions |
Taxes (Details) - Schedule of d
Taxes (Details) - Schedule of deferred tax assets net - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule Of Deferred Tax Assets Net [Abstract] | ||
Net operating loss | $ 2,500,664 | $ 1,802,625 |
Total deferred tax assets | 2,500,664 | 1,802,625 |
Valuation allowance | (2,500,664) | (1,802,625) |
Deferred tax assets, net |
Taxes (Details) - Schedule of i
Taxes (Details) - Schedule of income(loss) before provision for income taxes - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
PRC [Member] | |||
Schedule of income(loss) before provision for income taxes [Line Items] | |||
Income tax provision | $ 933,868 | $ 2,044,086 | $ 1,491,960 |
US [Member] | |||
Schedule of income(loss) before provision for income taxes [Line Items] | |||
Income tax provision | (2,212,526) | (1,521,040) | (1,641,405) |
Total Income (Loss) before Income Taxes | $ (1,278,658) | $ (523,046) | $ 149,445 |
Taxes (Details) - Schedule of_2
Taxes (Details) - Schedule of income tax provision computed based on PRC statutory income tax rate - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Schedule of Income Tax Provision Computed based on PRC Statutory Income Tax Rate [Abstract] | ||||
Income tax expense (benefit) computed based on PRC statutory rate | $ (319,664) | $ 130,761 | $ (37,361) | |
Favorable tax rate and tax exemption impact in PRC entities (a) | [1] | (223,920) | (494,744) | (358,406) |
Effect of rate differential for U.S. subsidiaries | 88,501 | 60,842 | 65,656 | |
Change in valuation allowance | 464,630 | 319,418 | 344,695 | |
Actual income tax provision | $ 9,547 | $ 16,277 | $ 14,584 | |
[1] During the years ended December 31, 2022 and 2021, the Company’s subsidiary, Xinjiang United Family, and its three branch offices, were subject to a favorable tax rate of 2.5%. During the year ended December 31, 2020, the Company’s subsidiary, Xinjiang United Family, and its three branch offices, were subject to a favorable tax rate of 5.0%. For the year ended December 31, 2022, 13 of these UFG entities were subject to income tax assessed at 0.5% of TNI that ranged from RMB33,000 to RMB180,000 per month. For the year ended December 31, 2021, 13 of these UFG entities were subject to income tax assessed at 0.5% of TNI that ranged from RMB25,000 to RMB180,000 per month. During the year ended December 31, 2020, 11 of the UFG entities were subject to income tax assessed at 1% of TNI ranging from RMB33,000 to RMB120,000 per month. The rest of the UFG entities were exempted from paying income tax. For the years ended December 31, 2022, 2021, and 2020, the tax saving as the result of the favorable tax rates and tax exemption amounted to $223,920, $494,744, and $358,406, respectively, and per share effect of the favorable tax rate and tax exemption was $0.02, $0.05, and $0.04, respectively. |
Taxes (Details) - Schedule of t
Taxes (Details) - Schedule of taxes payable - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Taxes Payable [Abstract] | ||
Income tax payable (recoverable) | $ (3,404) | $ 1,463 |
Value added tax payable | 93,924 | 4,850 |
Other taxes payable | 40,207 | 24,526 |
Total taxes payable | $ 130,727 | $ 30,839 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 12 Months Ended | ||
Mar. 27, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Shareholders' Equity (Details) [Line Items] | |||
Ordinary shares, Description | The authorized number of ordinary shares was 50,000 shares with par value of $1 per share and 100 ordinary shares were issued, prior to the 1,000-for-1 forward split and the share issuances described below. The issuance of these 100 ordinary shares, and the 1,000-for-1 forward split and the share issuances are considered as a part of the Reorganization of the Company | ||
Shareholders and board of directors description | (i) a forward split of the Company’s ordinary shares at a ratio of 1,000-for-1 share to increase the authorized ordinary shares from 50,000 shares to 50,000,000 shares and subdivide the 100 ordinary shares of a par value of $1 then outstanding into 100,000 ordinary shares of a par value of $0.001 (the “1,000-for-1 forward split”); (ii) the creation of Class A Ordinary Shares and Class B Ordinary Shares. Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except for voting and conversion rights. In respect of matters requiring a vote of all shareholders, each holder of Class A Ordinary Shares will be entitled to one vote per one Class A Ordinary Share and each holder of Class B Ordinary Shares will be entitled to 10 votes per one Class B Ordinary Share. 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; and (iii) issuances of Class A Ordinary Shares and Class B Ordinary Shares to the existing shareholders, to increase the number of total ordinary shares issued and outstanding prior to the completion of this offering from 100,000 to 9,000,000 (the “share issuances”). The Company believes the 1,000-for-1 forward split and the share issuances should be considered as a part of the Reorganization of the Company and accounted for on a retroactive basis pursuant to ASC 260. | ||
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 | |
Ordinary shares, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Ordinary shares, shares issued | 9,000,000 | 9,000,000 | |
Ordinary shares, shares outstanding | 9,000,000 | 9,000,000 | |
After-tax net income percentage | 10% | ||
Registered capital percentage | 50% | 50% | |
Statutory reserves (in Dollars) | $ 447,231 | $ 447,231 | |
Net assets (in Dollars) | $ 1,325,631 | $ 1,325,631 | |
Class A Ordinary Shares [Member] | |||
Shareholders' Equity (Details) [Line Items] | |||
Ordinary shares, shares authorized | 44,000,000 | 44,000,000 | |
Ordinary shares, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Ordinary shares, shares issued | 3,060,000 | 3,060,000 | |
Ordinary shares, shares outstanding | 3,060,000 | 3,060,000 | |
Class B Ordinary Shares [Member] | |||
Shareholders' Equity (Details) [Line Items] | |||
Ordinary shares, shares authorized | 6,000,000 | 6,000,000 | |
Ordinary shares, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Ordinary shares, shares issued | 5,940,000 | 5,940,000 | |
Ordinary shares, shares outstanding | 5,940,000 | 5,940,000 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of segment information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 13,272,075 | $ 14,690,295 | $ 10,313,512 |
Cost of revenue | 7,169,404 | 7,759,872 | 5,164,178 |
Gross profit | 6,102,671 | 6,930,423 | 5,149,334 |
Net income (loss) | (1,288,205) | 506,769 | (164,029) |
Interest expense | (35,457) | (98,033) | (108,852) |
Provision for income tax | 9,547 | 16,277 | 14,584 |
Depreciation and amortization | 701,461 | 605,253 | 485,826 |
Capital expenditures | 860,034 | 2,038,054 | 574,333 |
China [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 9,491,208 | 12,796,089 | 8,973,742 |
Cost of revenue | 5,080,616 | 6,582,462 | 4,410,288 |
Gross profit | 4,410,592 | 6,213,627 | 4,563,454 |
Net income (loss) | 924,321 | 2,027,809 | 1,477,377 |
Interest expense | (35,457) | (98,033) | (108,852) |
Provision for income tax | 9,547 | 16,277 | 14,584 |
Depreciation and amortization | 385,736 | 317,702 | 276,981 |
Capital expenditures | 671,965 | 1,096,051 | 262,284 |
United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 3,780,867 | 1,894,206 | 1,339,770 |
Cost of revenue | 2,088,788 | 1,177,410 | 753,890 |
Gross profit | 1,692,079 | 716,796 | 585,880 |
Net income (loss) | (2,212,526) | (1,521,040) | (1,641,406) |
Interest expense | |||
Provision for income tax | |||
Depreciation and amortization | 315,725 | 287,551 | 208,845 |
Capital expenditures | $ 188,069 | $ 942,003 | $ 312,049 |
Segment Reporting (Details) -_2
Segment Reporting (Details) - Schedule of total assets and Liabilities - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Total assets: | ||
Total assets | $ 27,329,186 | $ 24,996,094 |
Total liabilities: | ||
Total liabilities | 26,152,137 | 22,161,135 |
China [Member] | ||
Total assets: | ||
Total assets | 11,704,732 | 12,625,783 |
Total liabilities: | ||
Total liabilities | 12,102,414 | 13,163,745 |
United Stated [Member] | ||
Total assets: | ||
Total assets | 15,624,454 | 12,370,311 |
Total liabilities: | ||
Total liabilities | $ 14,049,723 | $ 8,997,390 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] $ / shares in Units, $ in Millions | Apr. 03, 2023 USD ($) $ / shares shares |
IPO [Member] | |
Subsequent Events (Details) [Line Items] | |
Net proceeds | $ | $ 12 |
Class A Ordinary Shares [Member] | |
Subsequent Events (Details) [Line Items] | |
Additional shares | shares | 508,500 |
Class A Ordinary Shares [Member] | IPO [Member] | |
Subsequent Events (Details) [Line Items] | |
Ordinary shares | shares | 3,390,000 |
Public offering price | $ / shares | $ 4 |
Gross proceeds | $ | $ 13.6 |
Condensed Financial Informati_3
Condensed Financial Information of the Parent Company (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Consolidated net assets percentage | 25% |
Condensed Financial Informati_4
Condensed Financial Information of the Parent Company (Details) - Schedule of parent company balance sheets - Parent [Member] - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Intercompany receivable | $ 9,000 | $ 9,000 |
Total current assets | 9,000 | 9,000 |
Non-current assets | ||
Loss from investment in subsidiaries | (5,634,277) | (4,346,072) |
Total assets | (5,625,277) | (4,337,072) |
LIABILITIES | ||
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ DEFICIT | ||
Ordinary shares, $0.001 par value, 50,000,000 shares authorized; 9,000,000 shares issued and outstanding as of December 31, 2022 and 2021: | ||
Class A ordinary share, $0.001 par value, 44,000,000 shares authorized; 3,060,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 3,060 | 3,060 |
Class B ordinary share, $0.001 par value, 6,000,000 shares authorized; 5,940,000 shares issued and outstanding as of December 31, 2022 and 2021 | 5,940 | 5,940 |
Additional paid-in capital | ||
Accumulated deficit | (5,634,277) | (4,346,072) |
Accumulated other comprehensive income | ||
Total shareholders’ deficit | (5,625,277) | (4,337,072) |
Total liabilities and shareholders’ deficit | $ (5,625,277) | $ (4,337,072) |
Condensed Financial Informati_5
Condensed Financial Information of the Parent Company (Details) - Schedule of parent company balance sheets (Parentheticals) - Parent [Member] - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Condensed Financial Information of the Parent Company (Details) - Schedule of parent company balance sheets (Parentheticals) [Line Items] | ||
Ordinary shares, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 |
Ordinary shares, shares issued | 9,000,000 | 9,000,000 |
Ordinary shares, shares outstanding | 9,000,000 | 9,000,000 |
Class A Ordinary Share | ||
Condensed Financial Information of the Parent Company (Details) - Schedule of parent company balance sheets (Parentheticals) [Line Items] | ||
Ordinary shares, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 44,000,000 | 44,000,000 |
Ordinary shares, shares issued | 3,060,000 | 3,060,000 |
Ordinary shares, shares outstanding | 3,060,000 | 3,060,000 |
Class B Ordinary Share | ||
Condensed Financial Information of the Parent Company (Details) - Schedule of parent company balance sheets (Parentheticals) [Line Items] | ||
Ordinary shares, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 6,000,000 | 6,000,000 |
Ordinary shares, shares issued | 5,940,000 | 5,940,000 |
Ordinary shares, shares outstanding | 5,940,000 | 5,940,000 |
Condensed Financial Informati_6
Condensed Financial Information of the Parent Company (Details) - Schedule of parent company statements of operations and comprehensive income (loss) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of parent company statements of operations and comprehensive income (loss) [Abstract] | |||
EQUITY IN EARNINGS (LOSS) OF SUBSIDIARIES AND VIES | $ (1,288,205) | $ 506,769 | $ (447,151) |
NET INCOME (LOSS) | (1,288,205) | 506,769 | (447,151) |
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS | |||
COMPREHENSIVE INCOME (LOSS) | $ (1,288,205) | $ 506,769 | $ (447,151) |
Condensed Financial Informati_7
Condensed Financial Information of the Parent Company (Details) - Schedule of parent company statements of cash flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ (1,288,205) | $ 506,769 | $ (447,151) |
Adjustments to reconcile net cash flows from operating activities: | |||
Equity in earnings (loss) of subsidiaries and VIEs | 1,288,205 | (506,769) | 447,151 |
Net cash used in operating activities | |||
CHANGES IN CASH | |||
CASH, beginning of year | |||
CASH, end of year |