Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Apr. 15, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-41957 | ||
Entity Registrant Name | Wetouch Technology Inc. | ||
Entity Central Index Key | 0001826660 | ||
Entity Tax Identification Number | 20-4080330 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Address, Address Line One | No. 29, Third Main Avenue | ||
Entity Address, Address Line Two | Shigao Town, Renshou County | ||
Entity Address, Address Line Three | Meishan | ||
Entity Address, City or Town | Sichuan | ||
Entity Address, Country | CN | ||
Entity Address, Postal Zip Code | 620500 | ||
City Area Code | (86) | ||
Local Phone Number | 28-37390666 | ||
Title of 12(b) Security | Common Stock , par value $0.001 per share | ||
Trading Symbol | WETH | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Elected Not To Use the Extended Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 77 | ||
Entity Common Stock, Shares Outstanding | 11,931,534 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Name | BF Borgers CPA PC | ||
Auditor Firm ID | 5041 | ||
Auditor Location | Lakewood, CO |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | ||
CURRENT ASSETS | ||||
Cash | $ 98,040,554 | $ 51,250,505 | ||
Accounts receivable, net | 7,455,252 | 9,057,741 | ||
Inventories | 222,102 | 423,276 | ||
Prepaid expenses and other current assets | 1,063,627 | 1,450,620 | ||
TOTAL CURRENT ASSETS | 106,781,535 | 62,182,142 | ||
Property, plant and equipment, net | 12,859,863 | 10,923,610 | ||
TOTAL ASSETS | 119,641,398 | 73,105,752 | ||
CURRENT LIABILITIES | ||||
Accounts payable | 640,795 | 1,383,094 | ||
Loan from a third party | 469,591 | 385,791 | ||
Income tax payable | 22,152 | |||
Accrued expenses and other current liabilities | 3,992,905 | 944,624 | ||
Convertible promissory notes payable | 1,239,126 | 1,277,282 | ||
TOTAL CURRENT LIABILITIES | 6,342,417 | 4,014,608 | ||
Common stock purchase warrants liability | 378,371 | 256,957 | ||
TOTAL LIABILITIES | 6,720,788 | 4,271,565 | ||
COMMITMENTS AND CONTINGENCIES (Note 13) | ||||
STOCKHOLDERS’ EQUITY | ||||
Common stock, $0.001 par value, 15,000,000 shares authorized, 9,732,948 and 1,680,248 issued and outstanding as of December 31, 2023 and 2022, respectively | [1] | 9,733 | 1,680 | |
Additional paid in capital | [1] | 43,514,125 | 3,402,178 | |
Statutory reserve | 7,195,092 | 6,040,961 | ||
Retained earnings | 69,477,092 | 62,366,892 | ||
Accumulated other comprehensive loss | (7,275,432) | (2,977,524) | ||
TOTAL STOCKHOLDERS’ EQUITY | 112,920,610 | 68,834,187 | [2] | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 119,641,398 | 73,105,752 | ||
Related Party [Member] | ||||
CURRENT LIABILITIES | ||||
Due to a related party | $ 1,665 | |||
[1]Retrospectively restated for effect of reverse stock split (1-for-20) reverse stock split (1-for-20) |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, shares issued | 9,732,948 | 1,680,248 |
Common stock, shares outstanding | 9,732,948 | 1,680,248 |
Reverse stock split description | reverse stock split (1-for-20) |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Income Statement [Abstract] | |||
REVENUES | $ 39,705,939 | $ 37,923,112 | |
COST OF REVENUES | (22,515,219) | (23,872,632) | |
GROSS PROFIT | 17,190,720 | 14,050,480 | |
OPERATING EXPENSES | |||
Selling expenses | (608,524) | (1,288,467) | |
General and administrative expenses | (3,847,361) | (1,262,093) | |
Research and development expenses | (84,551) | (85,251) | |
OPERATING EXPENSES | (4,540,436) | (2,635,811) | |
INCOME FROM OPERATIONS | 12,650,284 | 11,414,669 | |
Interest income | 117,719 | 118,714 | |
Interest expense | (252,325) | (224,885) | |
Other expense | (47,328) | ||
Loss on conversion of convertible promissory notes payable | (96,927) | ||
Gain (loss)on changes in fair value of common stock purchase warrants liability | (121,413) | 871,677 | |
TOTAL OTHER INCOME (EXPENSE), NET | (303,347) | 668,579 | |
INCOME BEFORE INCOME TAX EXPENSE | 12,346,937 | 12,083,248 | |
INCOME TAX EXPENSE | (4,082,606) | (3,352,802) | |
NET INCOME | 8,264,331 | 8,730,446 | |
OTHER COMPREHENSIVE INCOME (LOSS) | |||
Foreign currency translation adjustment | (4,297,908) | (5,242,692) | |
COMPREHENSIVE INCOME (LOSS) | $ 3,966,423 | $ 3,487,754 | |
EARNINGS PER COMMON SHARE* | |||
Basic | [1] | $ 0.89 | $ 5.38 |
Diluted | [1] | $ 0.89 | $ 4.73 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING* | |||
Basic | [1] | 9,285,815 | 1,620,511 |
Diluted | [1] | 9,375,105 | 1,843,767 |
[1]Retrospectively restated for effect of reverse stock split (1-for-20) |
Consolidated Statements of In_2
Consolidated Statements of Income and Comprehensive Income (Parenthetical) | 12 Months Ended |
Dec. 31, 2023 | |
Income Statement [Abstract] | |
Reverse stock split | reverse stock split (1-for-20) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Statutory reserve [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total | |
Balance at Dec. 31, 2021 | [1] | $ 1,591 | $ 2,363,842 | $ 5,067,243 | $ 54,610,164 | $ 2,265,168 | $ 64,308,008 |
Balance, shares at Dec. 31, 2021 | [1] | 1,590,576 | |||||
Appropriation to statutory reserve | 973,718 | (973,718) | |||||
Exercise of warrants issued in conjunction with legal services in 2020 | $ 6 | (6) | |||||
Exercise of warrants issued in conjunction with legal services in 2020, shares | 6,211 | ||||||
Exercise of warrants issued to third parties in conjunction with debt issuance in 2021 | $ 14 | (14) | |||||
Exercise of warrants issued to third parties in conjunction with debt issuance in 2021, shares | 14,233 | ||||||
Stock issuance for convertible promissory notes payable | $ 69 | 1,038,356 | 1,038,425 | ||||
Stock issuance for convertible promissory notes payable, shares | 69,228 | ||||||
Net income | 8,730,446 | 8,730,446 | |||||
Foreign currency translation adjustment | (5,242,692) | (5,242,692) | |||||
Balance at Dec. 31, 2022 | [1] | $ 1,680 | 3,402,178 | 6,040,961 | 62,366,892 | (2,977,524) | 68,834,187 |
Balance, shares at Dec. 31, 2022 | [1] | 1,680,248 | |||||
Appropriation to statutory reserve | 1,154,131 | (1,154,131) | |||||
Exercise of warrants issued to third parties in conjunction with debt issuance in 2021 | $ 22 | (22) | |||||
Exercise of warrants issued to third parties in conjunction with debt issuance in 2021, shares | 22,338 | ||||||
Stock issuance for convertible promissory notes payable | $ 25 | 119,975 | 120,000 | ||||
Stock issuance for convertible promissory notes payable, shares | 25,000 | ||||||
Net income | 8,264,331 | 8,264,331 | |||||
Foreign currency translation adjustment | (4,297,908) | (4,297,908) | |||||
Shares issued to private placement | $ 8,000 | 39,992,000 | 40,000,000 | ||||
Shares issued to private placement,shares | 8,000,000 | ||||||
Fraction shares issued due to reverse stock split | $ 6 | (6) | |||||
Fraction shares issued due to reverse stock split,shares | 5,362 | ||||||
Balance at Dec. 31, 2023 | $ 9,733 | $ 43,514,125 | $ 7,195,092 | $ 69,477,092 | $ (7,275,432) | $ 112,920,610 | |
Balance, shares at Dec. 31, 2023 | 9,732,948 | ||||||
[1]Retrospectively restated for effect of reverse stock split (1-for-20) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | |
Reverse stock split | reverse stock split (1-for-20) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities | ||
Net income | $ 8,264,331 | $ 8,730,446 |
Adjustments to reconcile net income to cash provided by operating activities | ||
Inventory write-off | 74,100 | |
Depreciation and amortization | 9,403 | 9,891 |
Loss on convertible promissory notes payable | 96,927 | |
Amortization of discounts and issuance cost of the notes | 33,655 | 148,368 |
Loss (Gain) on changes in fair value of common stock purchase warrants liability | 121,413 | (871,677) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,347,497 | (1,497,237) |
Inventories | 187,532 | (197,453) |
Due from a related party | (51) | |
Prepaid expenses and other current assets | 333,415 | 853,426 |
Accounts payable | (704,696) | 637,372 |
Loans from a third party | 84,025 | |
Amounts due to related parties | (1,665) | (18,055) |
Income tax payable | (21,578) | (41,068) |
Accrued expenses and other current liabilities | 3,071,108 | 661,203 |
Net cash provided by operating activities | 12,724,389 | 8,586,243 |
Cash flows from investing activities | ||
Purchase of property, plant and equipment | (2,263,549) | |
Net cash used in investing activities | (2,263,549) | |
Cash flows from financing activities | ||
Proceeds from stock issuance of private placement | 40,000,000 | |
Repayments of convertible promissory notes payable | (55,000) | (1,038,426) |
Proceeds from interest-free advances from a third party | 385,791 | |
Net cash provided by (used in) financing activities | 39,945,000 | (652,635) |
Effect of changes of foreign exchange rates on cash | (3,615,791) | (2,846,807) |
Net increase in cash | 46,790,049 | 5,086,801 |
Cash, beginning of year | 51,250,505 | 46,163,704 |
Cash, end of year | 98,040,554 | 51,250,505 |
Supplemental disclosures of cash flow information | ||
Interest paid | 10,000 | |
Income taxes paid | 4,104,184 | 3,391,137 |
Non-cash financing activities | ||
Cashless stock issuance for convertible promissory notes payable | $ 22,338 | $ 284,654 |
BUSINESS DESCRIPTION
BUSINESS DESCRIPTION | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS DESCRIPTION | NOTE 1 — BUSINESS DESCRIPTION Wetouch Technology Inc. (“Wetouch”, or the “Company”), formerly known as Gulf West Investment Properties, Inc., was originally incorporated in August 1992, under the laws of the state of Nevada. On October 9, 2020, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Wetouch Holding Group Limited (“BVI Wetouch”) and all the shareholders of BVI Wetouch (each, a “BVI Shareholder” and collectively, the “BVI Shareholders”), to acquire all the issued and outstanding capital stock of BVI Wetouch in exchange for the issuance to the BVI Shareholders an aggregate of 28,000,000 1,400,000 2,800 140 31,396,394 1,569,820 BVI Wetouch is a holding company whose only asset, held through a subsidiary, is 100 The Reverse Merger was accounted for as a recapitalization effected by a share exchange, wherein BVI Wetouch is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of BVI Wetouch have been brought forward at their book value and no goodwill has been recognized. The number of shares, par value amount, and additional paid-in capital in the prior years are retrospectively adjusted accordingly. Corporate History of BVI Wetouch BVI Wetouch was incorporated under the laws of British Virgin Islands on August 14, 2020. It became the holding company of Hong Kong Wetouch Electronics Technology Limited (“Hong Kong Wetouch”) on September 11, 2020. Hong Kong Wetouch Technology Limited (“HK Wetouch”), was incorporated as a holding company under the laws of Hong Kong Special Administrative Region (the “SAR”) on December 3, 2020. On March 2, 2021, HK Wetouch acquired all shares of Hong Kong Wetouch. Due to the fact that Hong Kong Wetouch and HK Wetouch are both under the same sole stockholder, the acquisition is accounted for under common control. In June 2021, Hong Kong Wetouch completed its dissolution process pursuant to the minutes of its special shareholder meeting. Sichuan Wetouch was formed on May 6, 2011 in the PRC and became a Wholly Foreign-Owned Enterprise (WFOE”) in PRC on February 23, 2017. On July 19, 2016, Sichuan Wetouch was 100 On December 30, 2020, Sichuan Vtouch was incorporated in Chengdu, Sichuan, under the PRC laws. In March 2021, pursuant to local PRC government guidelines on local environmental issues and the national plan, Sichuan Wetouch was under the government directed relocation order. Sichuan Vtouch took over the operating business of Sichuan Wetouch. On March 30, 2023, an independent third party acquired all shares of Sichuan Wetouch for a nominal amount. As a result of the above restructuring, HK Wetouch became the sole shareholder of Sichuan Vtouch. The following diagram illustrates the Company’s current corporate structure: |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) 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 and Exchange Commission (the “SEC”). The accompanying consolidated financial statements include the financial statements of Wetouch and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation. Deconsolidation of Sichuan Wetouch On March 30, 2023, upon transferring Sichuan Wetouch to a third-party individual for a nominal value, the Company was no longer able to operate and exert control over this subsidiary whose operation has been taken over by Sichuan Vtouch since the first quarter of 2021. As a result, Sichuan Wetouch was deconsolidated accordingly since the disposal date. The deconsolidated Sichuan Wetouch had assets, liabilities and the non-controlling interest on disposal date as the following: SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS 2023 March 30, 2023 Total assets as of deconsolidated date $ - Total liabilities as of deconsolidated date - Total gain or loss from deconsolidation $ - Upon the deconsolidation, the Company was no longer entitled to the assets and also legally released from the liabilities previously held by the deconsolidated Sichuan Wetouch, derived nil gain or loss from the deconsolidation in the consolidated statements of operations and comprehensive income for the year ended December 31, 2023. The disposal of Sichuan Wetouch did not represent a strategic shift and did not have a major effect on the Company’s operation. There was no cash outflow for the disposal for the year ended December 31, 2023. (b) Uses of estimates In preparing the consolidated financial statements in conformity with US 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 revenues 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 allowance for estimated uncollectible receivables, fair values of financial instruments, inventory valuations, useful lives of property, plant and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, revenue recognition and realization of deferred tax assets. Actual results could differ from those estimates. (c) Cash and cash equivalents Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. (d) Accounts receivables, net Accounts receivables are presented net of allowance for doubtful 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. 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 collection is not probable. (e) Inventory Inventory consists of raw materials, work-in-process and finished goods and is stated at the lower of cost or net realizable value. Cost is determined using a weighted average. For work-in-process and manufactured inventories, cost consists of raw materials, direct labor and an allocated portion of the Company’s production overhead. The Company writes down excess and obsolete inventory to its estimated net realizable value based upon assumptions about future demand and market conditions. For finished goods and work-in-process, if the estimated net realizable value for an inventory item, which is the estimated selling price in the ordinary course of business, less reasonably predicable costs to completion and disposal, is lower than its cost, the specific inventory item is written down to its estimated net realizable value. Net realizable value for raw materials is based on replacement cost. Provisions for inventory write-downs are included in the cost of revenues in the consolidated statements of operations. Inventories are carried at this lower cost basis until sold or scrapped. Nil 74,100 (f) Convertible Promissory Notes The Company accounts for its convertible promissory notes according to guidance of ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies the accounting for convertible instruments by eliminating the requirement to separate embedded conversion features from the host contract when the conversion features are not required to be accounted for as derivatives under Topic 815. We analyze the convertible notes for the existence of a beneficial conversion feature. the Company considered the three characteristics of a derivative instrument listed in ASC 815-10-15-83: (i) having one or more underlyings and one or more notional amounts or payment provisions or both; (ii) requiring no initial net investment; (iii) permitting net settlement; Since the Company’s notes have fixed interest rate, specified notional principal and settlement date, which no other events would affect specified settlement, and the Company received net proceeds after issuance costs and discount, which the Company recorded as the net proceeds or net settled investment, the management assessed that the Notes did not meet the definition of a derivative instruments and an embedded feature would not be bifurcated. The discounts on the convertible notes, are amortized to interest expense, using the effective interest method, over the terms of the related convertible notes. (g) Common stock purchase warrants The Company also analyzed the Warrants in accordance with ASC 815, to determine whether the Warrants meet the definition of a derivative and, if so, whether the Warrants meet the scope exception of ASC 815-40, which is that contracts issued or held by the reporting entity that are both (1) indexed to its own stock and (2) classified in stockholders’ equity shall not be considered to be derivative instruments for purposes of ASC 815-40. The Company concluded that the warrants issued in the financings in November and December 2021 should be treated as a derivative liability because these warrants are entitled to a price adjustment to allow the exercise price to be increased or reduced in the event the Company issues or sells any additional shares of common stock at a price per share other than the then-applicable exercise price or without consideration, which is typically referred to as a “Down-round protection” or “anti-dilution” provision. According to ASC 815-40, the “Down-round protection” provision is not considered to be an input to the fair value of a fixed-for-fixed option on equity shares which leads the warrants to fail to be qualified as indexed to the Company’s own stock and then to fail to meet the scope exceptions of ASC 815. Therefore, the Company accounted for the warrants as derivative liabilities under ASC 815. Pursuant to ASC 815, derivatives are measured at fair value and re-measured at fair value with changes in fair value recorded in earnings at each reporting period. The Company used a black-scholes-pricing model to estimate the fair values of common stock purchase warrants at the balance sheet dates. As of December 31, 2023 and 2022, the Company recorded $ 378,371 256,957 121,413 871,677 (h) 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, accounts receivable, prepaid expenses and other current assets, accounts payable, short-term bank loans, accrued expenses and other current liabilities, taxes payable and due to related parties, common stock purchase warrants liability, approximate the fair value of the respective assets and liabilities as of December 31, 2023 and 2022 based upon the nature of the assets and liabilities. (i) Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows: SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY PLANT AND EQUIPMENT Useful life Buildings 20 Machinery and equipment 10 Office and electric equipment 3 Vehicles 10 Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense 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 income and other comprehensive income in other income or expenses. (l) Impairment of long-lived Assets Long-lived assets, such as property, plant and equipment, land use rights, are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. There was nil impairment of intangible assets recognized for the years ended December 31, 2023 and 2022. (m) Foreign Currency Translation The Company uses US dollars as the reporting currency. The Company’s subsidiary HK Wetouch’s functional currency for HK Wetouch is Hong Kong dollar. The functional currency of Sichuan Vtouch is the Chinese Yuan (“RMB”). The Company’s consolidated financial statements have been translated into US$. Assets and liabilities accounts are translated using the exchange rate at each reporting period end date. Equity accounts are translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations. The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ 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: SCHEDULE OF CURRENT EXCHANGE RATES December 31, 2023 December 31, 2022 Year-end spot rate US$1=RMB 7.0999 US$1=RMB 6.8972 Average rate US$1=RMB 7.0809 US$1=RMB 6.7312 (n) Revenue Recognition The Company adopted Accounting Standards Codification (“ASC”) 606 using the modified retrospective approach. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Therefore, no adjustments to opening retained earnings were necessary. ASC 606, Revenue from Contracts with customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. ASC 606 requires the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that would result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams. In accordance with ASC 606, the Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company accounts for the revenue generated from sales of its products primarily to its customers in PRC and overseas, as the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods, which the Company has control of the goods and has the ability to direct the use of goods to obtain substantially all the benefits. All of the Company’s contracts have one single performance obligation as the promise is to transfer the individual goods to customers, and there is no separately identifiable other promises in the contracts. The Company’s revenue streams are recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. The Company’s products are sold with no right of return and the Company does not provide other credits or sales incentive to customers. The Company’s sales are net of value added tax (“VAT”) and business tax and surcharges collected on behalf of tax authorities in respect of product sales. Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contract assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing when an order is placed and when shipment or delivery occurs. As of December 31, 2023 and 2022, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. Disaggregation of Revenues The Company disaggregates its revenue from contracts by geography, 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 revenues for the years ended December 31, 2023 and 2022 are disclosed in Note 14 to the financial statements. (o) Selling, General and Administrative Expenses Selling expenses represents primarily costs of payroll, benefits, commissions for sales representatives and advertising expenses. General and administrative expenses represent primarily payroll and benefits costs for administrative employees, rent and operating costs of office premises, depreciation and amortization of office facilities, professional fees and other administrative expenses. (p) Research and Development Expense Research and development costs are expensed as incurred. (q) Share-Based Compensation The Company awards share options and other equity-based instruments to its employees, directors and third party service providers (collectively “share-based payments”). Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date. The Company recognizes the compensation cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The amount of cost recognized is adjusted to reflect the expected forfeiture prior to vesting. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. (r) Government grant The Company follows other authoritative accounting guidance since there is no clear guidance with regard to government grants. Government grants are recognized at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognized as income over the periods necessary to match the grant to the costs it is compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis. (s) Income taxes The Company accounts for income taxes in accordance with the asset and liability method. Deferred taxes are recognized for the future tax consequences attributable to temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and income tax purposes using enacted rates expected to be in effect when such amounts are realized or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established, as needed, to reduce the amount of deferred tax assets if it is considered more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the effect of uncertain income tax positions only if those positions are more-likely-than-not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% On December 22, 2017, the Tax Cut and Jobs Act of 2017 (“the Tax Act”) was signed into law, which among other effects, reduces the U.S. federal corporate income tax rate to 21% from 34% (or 35% in certain cases) beginning in 2018 (t) Value added tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price. Since April 1, 2019, VAT rate was lowered from 16 13 For export sales, VAT is not imposed on gross sales price, but the VAT related to purchasing raw materials is refunded after the export is completed. (u) Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of December 31, 2023 and 2022, warrants were included for the dilutive EPS calculation, respectively. (v) Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of income and comprehensive income. (w) Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), which introduces new guidance for the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale (AFS) debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The pronouncement will be effective for public business entities that are SEC filers in fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application of the guidance will be permitted for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted ASU 2016-13 utilizing the modified retrospective transition method on January 1, 2022. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. In October 2021, the FASB issued ASU No. 2021-08, which will require companies to apply the definition of a performance obligation under ASC Topic 606 to recognize and measure contract assets and contract liabilities (i.e., deferred revenue) relating to contracts with customers that are acquired in a business combination. Under current U.S. GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. ASU No. 2021-08 will result in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC Topic 606. ASU No. 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted ASU No. 2021-08 on January 1, 2023. The adoption of ASU No. 2021-08 did not have a material impact on the Company’s consolidated financial statements. In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832). This ASU requires business entities to disclose information about government assistance they receive if the transactions were accounted for by analogy to either a grant or a contribution accounting model. The disclosure requirements include the nature of the transaction and the related accounting policy used, the line items on the balance sheets and statements of operations that are affected and the amounts applicable to each financial statement line item and the significant terms and conditions of the transactions. The ASU is effective for annual periods beginning after December 15, 2021. The disclosure requirements can be applied either retrospectively or prospectively to all transactions in the scope of the amendments that are reflected in the financial statements at the date of initial application and new transactions that are entered into after the date of initial application. The ASU is currently not expected to have a material impact on the Company’s financial results or financial position. From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on its consolidated financial statements upon adoption. Recently issued accounting pronouncements not yet adopted In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional expedients and exceptions for applying U.S. GAAP on contract modifications and hedge accounting to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. These optional expedients and exceptions provided in ASU No. 2020-04 are effective for the Company as of March 12, 2020 through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”), which deferred the application dates of Topic 848 to December 31, 2024. The Group currently does not have any financial instrument that reference to LIBOR and does not anticipate the adoption will have a material impact to the Group’s combined and consolidated financial statements. In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in the group including the additional required disclosures when adopted. The Group is currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024. In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Group has evaluated this ASU and expects to add additional disclosures to our combined and consolidated financial statements, once adopted. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE-3- ACCOUNTS RECEIVABLE Accounts receivable consists of the following: SCHEDULE OF ACCOUNTS RECEIVABLE December 31, 2023 December 31, 2022 Accounts receivable $ 7,455,252 $ 9,057,741 Allowance for doubtful accounts - - Accounts receivable, net $ 7,455,252 $ 9,057,741 The Company’s accounts receivable primarily includes balance due from customers when the Company’s products are sold and delivered to customers. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expenses And Other Current Assets | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE-4 — PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS December 31, 2023 December 31, 2022 Advance to suppliers $ 334,852 $ 333,920 VAT input credits - 355,482 Issue cost related to convertible promissory notes 64,802 81,614 Prepayment for land use right (i) 537,998 569,105 Security deposit (ii) 53,865 56,979 Others receivable (iv) 72,110 53,520 Prepaid expenses and other current assets $ 1,063,627 $ 1,450,620 (i) On July 23, 2021, Sichuan Vtouch entered into a contract with Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right of a parcel of land of 131,010 3,925,233 537,998 (ii) On July 28, 2021, Sichuan Vtouch made a security deposit of RMB 393,000 53,865 (iv) Other receivables are mainly employee advances, and prepaid expenses. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 5— PROPERTY, PLANT AND EQUIPMENT, NET SCHEDULE OF PROPERTY , PLANT AND EQUIPMENT September 30, 2023 December 31, 2022 Buildings $ 12,130 $ 12,487 Machinery and equipment 3,944 - Vehicles 41,241 42,453 Construction in progress 12,825,896 10,883,051 Subtotal 12,883,211 10,937,991 Less: accumulated depreciation (23,348 ) (14,381 ) Property, plant and equipment, net $ 12,859,863 $ 10,923,610 Depreciation expense was $ 9,465 9,891 Pursuant to local PRC government guidelines on local environment issues and the national overall plan, Sichuan Wetouch, was under the government directed relocation order to relocate no later than December 31, 2021 and received compensation accordingly. On March 18, 2021, pursuant to the agreement with the local government and an appraisal report issued by a mutual agreed appraiser, Sichuan Wetouch received a compensation of RMB 115.2 16.2 On March 16, 2021, in order to minimize interruption of the Company’s business, Sichuan Vtouch entered into a leasing agreement with Sichuan Renshou Shigao Tianfu Investment Co., Ltd. (later renamed as Meishan Huantian Industrial Co., Ltd.), a limited liability company owned by the local government, to lease the property, and all buildings, facilities and equipment thereon (the “Demised Properties) of Sichuan Wetouch, commencing from April 1, 2021 until December 31, 2021 at a monthly rent of RMB 300,000 42,254 renewed on December 31, 2021 at a monthly rent of RMB 400,000 56,339 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS Amounts due to a related party are as follows: SCHEDULE OF RELATED PARTY TRANSACTIONS Relationship December 31, 2023 December 31, 2022 Note Mr. Zongyi Lian President and CEO of the Company - 1,665 Payable to employee Total $ - $ 1,665 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7 — INCOME TAXES Wetouch Wetouch is subject to a tax rate of 21 BVI Wetouch Under the current laws of the British Virgin Islands, BVI Wetouch, a wholly owned subsidiary of Wetouch, is not subject to tax on its income or capital gains. In addition, no British Virgin Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders. Hong Kong HK Wetouch is subject to profit taxes in Hong Kong at a progressive rate of 16.5 PRC Sichuan Wetouch and Sichuan Vtouch files income tax returns in the PRC. Effective from January 1, 2008, the PRC statutory income tax rate is 25 Under PRC CIT Law, domestic enterprises and foreign investment enterprises (the “FIEs”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on a case-by-case basis by local government as preferential tax treatment to High and New Technology Enterprises (the “HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15 15 On October 21, 2020, Sichuan Wetouch was granted on a case-by-case basis by Sichuan Provincial government as an HNTE , entitled to a reduced income tax rate of 15% from October 21, 2020 until October 20, 2023. Sichuan Vtouch is subject to a 25 The CIT Law and its implementation rules impose a withholding income tax at 10%, unless reduced by a tax treaty or arrangement, on the amount of dividends distributed by a PRC-resident enterprise to its immediate holding company outside the PRC that are related to earnings accumulated beginning on January 1, 2008. Dividends relating to undistributed earnings generated prior to January 1, 2008 are exempt from such withholding income tax. The components of the income tax provision are as follows: SCHEDULE OF COMPONENTS OF THE INCOME TAX PROVISION For the Years Ended December 31, 2023 2022 Current tax provision PRC $ 4,082,606 $ 3,352,802 Total current tax provision $ 4,082,606 $ 3,352,802 Deferred tax provision BVI - - Hong Kong - - China - - Total deferred tax provision - - Income tax provision $ 4,082,606 $ 3,352,802 The following table reconciles the PRC statutory rates to the Company’s effective tax rate for the years ended December 31, 2023 and 2022: SCHEDULE OF INCOME TAX RATE For the Years Ended December 31, 2023 2022 PRC statutory income tax rate 25.0 % 25.0 % Effect of income tax holiday 0.0 % 0.0 % Tax rate differential on entities not subject to PRC income (1.1 )% (0.5 )% R&D additional deduction (0.7 )% (1.0 )% Non-deductible expenses in the PRC 2.2 % 4.2 % Effective tax rate 25.4 % 27.7 % Deferred tax assets The Company’s had no The Company follows ASC 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. As of December 31, 2023 and 2022, taxes for Sichuan Wetouch and Sichuan Vtouch remained open for statutory examination by PRC tax authorities. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 8— ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, 2023 December 31, 2022 Advance from customers (i) $ 182,277 $ 397,886 Accrued payroll and employee benefits 84,280 89,359 Accrued interest expenses 240,805 122,135 Accrued private placement agent fees (ii) 1,200,000 - Accrued consulting fees (iii) 1,370,972 - Accrued litigation charges (iv) 45,828 - Accrued professional fees 330,180 - Accrued director fees 106,824 - Other tax payables (v) 143,035 261 Other payable to a former stockholder (vi) - 191,180 Others (vii) 288,704 153,803 Accrued expenses and other current liabilities $ 3,992,905 $ 944,624 (i) RMB 2,587,825 365,465 (ii) On March 18, 2023, the Company entered into a private placement consent agreement with a third-party investment bank firm (see Note 10) on the agent fees of US$ 1.2 (iii) In May, 2023, the Company entered into two third-party consulting service agreements for a fee of $ 1.35 3.1 (iv) As of December 31, 2023, the Company accrued litigation compensation of RMB 324,501 45,705 10,627 1,497 (v) Other tax payables are mainly VAT payable. (vi) Other payable to a former shareholder was paid in March 2023. (vii) Others mainly represent accrued employee reimbursement payable and other accrued miscellaneous operating expenses. |
CONVERTIBLE PROMISSORY NOTES PA
CONVERTIBLE PROMISSORY NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE PROMISSORY NOTES PAYABLE | NOTE 9 – CONVERTIBLE PROMISSORY NOTES PAYABLE a) Convertible promissory notes In October, November, and December 2021, the Company, issued seven (7) convertible promissory notes (the “Notes”) of an aggregate principal amount of US$ 2,250,000 90.0 8.0 1,793,000 162,000 The details of the Notes are as follows: Unless the Notes are converted, the principal amounts of the Notes, and accrued interest at the rate of 8 16 The Lenders have the right to convert any or all of the principal and accrued interest on the Notes into shares of common stock of the Company on the earlier of (i) 180 calendar days after the issuance date of the Notes or (ii) the closing of a listing for trading of the common stock of the Company on a national securities exchange offering resulting in gross proceeds to the Company of $ 15,000,000 Uplist Offering th 70 15.0 Subject to customary exceptions, if the Company issues shares or any securities convertible into shares of common stock at an effective price per share lower than the conversion price of the Notes, the conversion rate of the Notes shall be reduced to such lower price. Until the Notes are either paid or converted in their entirety, the Company agreed with the Lenders not to sell any securities convertible into shares of common stock of the Company (i) at a conversion price that is based on the trading price of the stock or (ii) with a conversion price that is subject to being reset at a future date or upon an event directly or indirectly related to the business of the Company or the market for the common stock. The Company also agreed to not issue securities at a future determined price. The Lenders have the right to require the Company to repay the Notes if the Company receives cash proceeds, including proceeds from customers and the issuance of equity (including in the Uplist Offering). If the Company prepays the Notes prior to the Maturity Date, the Company shall pay a 10 The following table summarizes the outstanding promissory notes as of December 31, 2023 and December 31, 2022: SUMMARY OF OUTSTANDING PROMISSORY NOTES December 31, 2023 December 31, 2022 Interest rate Principal Amount Carrying Amount Principal Amount Carrying Amount Convertible Note - Talos Victory (Note 9 (b)) 8 % $ - $ - $ - - Convertible Note - Mast Hill (Note 9 (b)) 8 % 740,000 700,448 740,000 635,535 Convertible Note - First Fire (Note 9 (b)) 8 % 156,250 151,457 181,250 156,594 Convertible Note - LGH Note 9 (b)) 8 % 202,500 204,929 207,500 188,987 Convertible Note - Fourth Man (Note 9 (b)) 8 % 152,000 142,397 157,000 128,703 Convertible Note - Jeffery Street Note 9 (b)) 8 % 165,000 150,641 170,000 142,554 Convertible Note - Blue Lake Note 9 (b))Total 8 % - - - - Total $ 1,400,750 $ 1,349,872 $ 1,455,750 $ 1,252,373 Amortization of Discounts for the Year Ended December 31, 2023 (110,746 ) Convertible Promissory Notes payable as of December 31, 2023 $ 1,239,126 From December 28, 2022 to April 6, 2023, the lenders of five outstanding Notes and the Company entered into an amendment to the Notes (“Amendment to Promissory Note”) extending the term of the Notes for an additional 6 months. From August 29 to September 9, 2023, the lenders of the outstanding Notes and the Company entered into an amendment to the Notes (“Amendment to Promissory Note”) that the Company’s ordinary shares on the Nasdaq Capital Market (the “Uplist”), the Company shall within three (3) business days after the Uplist, pay to the Holders amounts equal to 105% of the total outstanding balance of the Convertible Debenture. During the year ended December 31, 2023, principal and default charges totaling $ 1,200,000 25,000 During the year ended December 31, 2022, principal, accrued and unpaid interest and default charges totaling $ 1,038,426 69,228 For the year ended December 31, 2023 and 2022, the Company recognized interest expenses of the Notes in the amount of US$ 252,325 224,885 *The Company prepaid $ 10,000 As of the date of the Report, the Company has repaid remaining Principal and interests accrued. b) Warrants Accounting for Warrants In connection with the issuance of the Notes, the Company also issued to the lenders seven (7) three-year warrants (the “Note Warrants”) to purchase an aggregate of 90,000 The Note Warrants issued to the lenders granted the holders the rights to purchase up to 10,000 25 th 125 25 The lenders have the right to exercise the Note Warrants on a cashless basis if the highest traded price of a share of common stock of the Company during the 150 trading days prior to exercise of the Note Warrants exceeds the exercise price, unless there is an effective registration statement of the Company which covers the resale of the Lenders. If the Company issues shares or any securities convertible into shares at an effective price per share lower than the exercise price of the Note Warrants, the exercise price of the Note Warrants shall be reduced to such lower price, subject to customary exceptions. The lenders may not convert the Notes or exercise the Note Warrants if such conversion or exercise will result in each of the lenders, together with any affiliates, beneficially owning in excess of 4.9 During the year ended December 31, 2022, three lenders exercised the Note Warrants cashlessly for 14,233 During the year ended December 31, 2023, two lenders exercised the Note Warrants cashlessly for 22,338 The fair values of these warrants as of December 31, 2023 were calculated using the Black-Scholes option-pricing model with the following assumptions: SCHEDULE OF FAIR VALUE OF WARRANTS December 31, 2023 Volatility (%) Expected dividends yield (%) Weighted average expected life (year) Risk-free interest rate (%) (per annum) Common stock purchase warrants liability as of December 31, 2022(US$) Changes of fair value of common stock purchase warrants liability Common stock purchase warrants liability as of December 31, 2023 (US$) Convertible Note - Talos Victory (Note 9 (a)) 545.7 % 0.0 % 0.8 5.03 % 14,803 28,310 43,113 Convertible Note - Mast Hill (Note 9 (a)) 545.7 % 0.0 % - 5.03 % 101,293 (101,293 ) - Convertible Note - First Fire (Note 9 (a)) 545.7 % 0.0 % 0.9 5.03 % 33,919 64,456 98,375 Convertible Note - LGH Note 9 (a)) 545.7 % 0.0 % 0.9 5.03 % 34,028 64,489 98,517 Convertible Note - Fourth Man (Note 9 (ab)) 545.7 % 0.0 % 0.9 5.03 % 14,398 27,241 41,639 Convertible Note - Jeffery Street Note 9 (a)) 545.7 % 0.0 % 0.9 5.03 % 34,134 (7,870 ) 26,264 Convertible Note - Blue Lake Note 9 (a)) 545.7 % 0.0 % 0.9 5.03 % 24,382 46,080 70,463 Total Total 256,957 121,413 378,371 (c) Registration Rights Agreements Pursuant to the terms of the Registration Rights Agreements between the Company and lenders of the Notes, the Company agreed to file a registration statement with the Securities and Exchange Commission to register the shares of common stock underlying the Notes and the shares issuable upon exercise of the Note Warrants within sixty days from the date of each Registration Rights Agreement. The Company also granted the lenders piggyback registration rights on such securities pursuant to the Purchase Agreements . |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 10— STOCKHOLDERS’ EQUITY 1) Common Stock The Company’s authorized shares of common stock was 15,000,000 0.001 On December 22, 2020, the Company issued 5,181 On January 1, 2021, the Company issued an aggregate of 15,541 On April 14, April 27 and September 1, 2022, the Company issued 5,777 5,599 2,857 During the year ended December 31, 2022, the Company issued 6,211 During the year ended December 31, 2022, the Company issued 69,228 On January 19, 2023, the Company sold an aggregate of 8,000,000 40,000,000 5.00 40 During the year ended December 31, 2023, the Company issued 25,000 During the year ended December 31, 2023, the Company issued 22,338 As of December 31, 2023, the Company had 9,732,948 2) Reverse Stock Split On February 17, 2023, the Company’s board of directors authorized a reverse stock split of common stock with a ratio of not less than one to five (1:5) and not more than one to eighty (1:80), with the exact amount and the timing of the reverse stock split to be determined by the Chairman of the Board. Upon effectiveness of such reverse stock split, the number of authorized shares of the common stock of the Company will also be decreased in the same ratio. Pursuant to Section 78.209 of the Nevada Revised Statutes, the reverse stock split does not have to be approved by the stockholders of the Company. On July 16, 2023, the Company’s board of directors approved the reverse stock split of the Company’s common stock at a ratio of 1-for-20. On July 16, 2023, the Company filed a certificate of change (with an effective date of July 16, 2023) with the Nevada Secretary of State pursuant to Section 78.209 of the Nevada Revised Statutes to effectuate a 1-for-20 reverse stock split of its common stock. On September 11, 2023, the reverse stock split was approved by the Financial Industry Regulatory Authority and took effect on September 12, 2023. All share information included in this annual report has been adjusted as if the reverse stock split occurred as of the earliest period presented. 3) Statutory Reserve and Restricted Net Assets Under PRC rules and regulations, all companies in the PRC are required to appropriate 10% of their net income to a statutory surplus reserve until the reserve balance reaches 50% of their registered capital. The appropriation to this statutory surplus reserve must be made before distribution of dividends can be made. The statutory reserve is non-distributable, other than during liquidation, and can be used to fund previous years losses, if any, and may be converted into share capital by issuing new shares to existing shareholders in proportion to their shareholders or by increasing the par value of the shares currently outstanding, provided that the remaining balance of the statutory reserve after such issue is not less than 25% of the 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. For the years ended December 31, 2023 and 2022, the Company made appropriations to the reserve fund of RMB 8,172,303 1,154,131 6,554,271 973,718 |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE BASED COMPENSATION | NOTE 11- SHARE BASED COMPENSATION The Company applied ASC 718 and related interpretations in accounting for measuring the cost of share-based compensation over the period during which the consultants are required to provide services in exchange for the issued shares. The fair value of above award was estimated at the grant date using the Black-Scholes model for pricing the share compensation expenses. On December 22, 2020, the Board of Directors of the Company authorized the issuance of an aggregate of 5,181 10,518 5,181 6,211 4,307 2.5 0 43.5 0.11 On January 1, 2021, the Board of Directors of the Company authorized the issuance of an aggregate of 15,541 31,554 The 15,541 31,554 vested on January 1, 2021. The fair value of the above warrants was estimated at the grant date using Black-Scholes model for pricing the share compensation expenses. The fair value of the Black-Scholes model includes the following assumptions: expected life of 2.5 0 51.3 0.12 As of December 31, 2023, the Company had warrants outstanding to purchase 35,861 0.2 0.2 0.3 |
WEIGHTED AVERAGE NUMBER OF SHAR
WEIGHTED AVERAGE NUMBER OF SHARES | 12 Months Ended |
Dec. 31, 2023 | |
EARNINGS PER COMMON SHARE* | |
WEIGHTED AVERAGE NUMBER OF SHARES | NOTE 12. WEIGHTED AVERAGE NUMBER OF SHARES In October 2020, the Company entered into a reverse merger transaction. The Company computes the weighted-average number of shares of common stock outstanding in accordance with ASC 260 states that in calculating the weighted average shares when a reverse merger takes place in the middle of the year, the number of common shares outstanding from the beginning of that period to the acquisition date shall be computed on the basis of the weighted-average number of shares of common stock of the legal acquiree (accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement. The number of shares of common stock outstanding from the acquisition date to the end of that period shall be the actual number of shares of common stock of the legal acquirer (the accounting acquiree) outstanding during that period. |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
RISKS AND UNCERTAINTIES | NOTE 13 - RISKS AND UNCERTAINTIES Credit Risk The Company has its cash in bank deposits primarily at state owned banks located in the PRC. Historically, deposits in PRC banks have been secured due to the state policy of protecting depositors’ interests. The PRC promulgated a Bankruptcy Law in August 2006, effective June 1, 2007, which contains provisions for the implementation of measures for the bankruptcy of PRC banks. The bank deposits with financial institutions in the PRC are insured by the government authority for up to RMB 500,000 Interest Rate Risk Currency Risk - Concentrations - 22.5 16.5 15.6 14.1 11.3 10.1 21.2 16.1 14.8 13.7 11.9 10.1 And the Company’s top 10 customers aggregately accounted for 99.7 98.7 As of December 31, 2023, four customers accounted for 31.7 16.2 15.8 11.5 As of December 31, 2022, three customers accounted for 32.2 22.8 14.0 The Company purchases its raw materials through various suppliers. Raw material purchases from these suppliers which individually exceeded 10% of the Company’s total raw material purchases, accounted for approximately 13.3 13.2 12.7 10.7 10.6 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 — COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company and its subsidiaries are parties to various legal actions arising in the ordinary course of business. Although Hong Kong Wetouch, Sichuan Wetouch, the deconsolidated subsidiary of the Company (see Note 2- (a) - Deconsolidation of Sichuan Wetouch) i) An equity dispute case with Yunqing Su with a disputed amount of RMB 1,318,604 185,721 On June 22, 2017, Yunqing Su, a former shareholder, entered an Equity Investment Agreement with Sichuan Wetouch and Guangde Cai, agreed that Yunqing Su would invest RMB 1 140,847 370,370.37 220,000 30,986 128,000 18,028 On May 9, 2022, pursuant to a civil mediation statement issued by the Renshou County People’s Court of Sichuan Province, Sichuan Wetouch and Guangde Cai agreed to repay Yunqing Su the principal and interest in the total amount of RMB 1,318,604 185,721 ii) Legal case with Chengdu SME Credit Guarantee Co., Ltd. on a court acceptance fee of RMB 338,418 47,665 On July 5, 2013, Sichuan Wetouch obtained a one-year loan of RMB 60.0 8.5 8.61 Chengdu SME Credit Guarantee Co., Ltd (“Chengdu SME”), a third party, provided a 70% guarantee and Bank of Chengdu retained 30% of the risk, while Chengdu Wetouch , a related party company, owned by Mr. Guangde Cai and Mr. Guangde Cai provided joint and several liability guarantee for 100% of the loan. On July 31, 2014, Sichuan Wetouch repaid RMB 5.0 0.7 55.0 7.7 55 7.7 55 7.7 5.8 0.8 6.0 0.8 1.7 Chengdu SME applied to the Chengdu High-tech Court for enforcement of the above-mentioned loan default penalties of RMB 5.8 0.8 6.0 0.8 5.8 0.8 6.0 0.8 On September 16, 2020, Sichuan Wetouch made a full repayment of RMB 11.8 1.7 On March 16, 2023, pursuant to an Enforcement Settlement Agreement entered among Chengdu SME, Sichuan Wetouch and Chengdu Wetouch, Chengdu Wetouch agreed to pay the court acceptance fee of RMB 338,418 47,665 iii) Legal case with Lifan Financial Leasing (Shanghai) Co., Ltd. and Sichuan Wetouch, Chengdu Wetouch, Meishan Wetouch and Xinjiang Wetouch Electronic Technology Co., Ltd. on a court acceptance fee of RMB 250,470 35,278 On November 20, 2014, Lifan Financial Lease (Shanghai) Co., Ltd. (“Lifan Financial”) and Chengdu Wetouch entered into a Financial Lease Contract (Sale and Leaseback), which stipulated that Lifan Financial shall lease the equipment to Chengdu Wetouch after the purchase of the production equipment owned by Chengdu Wetouch at a purchase price, the purchase price/lease principal shall be RMB 20 8 On August 9, 2021, Lifan Financial filed a lawsuit against Chengdu Wetouch, Guangde Cai, Sichuan Wetouch, Meishan Wetouch and Xinjiang Wetouch in the Chengdu Intermediate People’s Court. The court ruled that: 1) the Financial Lease Contract (Sale and Leaseback) was terminated; 2) the leased property was owned by Lifan Financial; 3) Chengdu Wetouch shall pay Lifan Financial all outstanding rent and interest thereon in the total amount of RMB 22,905,807 3.2 The parties executed a settlement agreement on March 7, 2023, in which the parties confirmed that the outstanding payment of RMB 22,905,807 3.2 250,470 35,278 iv) Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. on a court acceptance fee of RMB 103,232 14,540 On March 19, 2014, Chengdu Wetouch, a related party, obtained a two and half-year loan of RMB 15.0 2.1 Upon the loan due in January 2017, Chengdu Wetouch defaulted the loan, thus, CDHT Investment filed a lawsuit against Chengdu Wetouch, Sichuan Wetouch, and Hong Kong Wetouch demanding a full repayment of such debts. To support the local economic development as well as Chengdu Wetouch, two government-backed companies, Sichuan Renshou Shigao Tianfu Investment Co., Ltd. (“Sichuan Renshou”) and Renshou Tengyi Landscaping Co., Ltd. (“Renshou Tengyi”) provided their bank deposits of RMB 12.0 1.7 Upon the expiration of the guarantee, Chengdu Wetouch still defaulted on repayment of the above pledge. As a result, CDHT Investment levied this collateral of RMB 12.0 12.0 1.7 On December 2, 2019, pursuant to the reconciling agreement issued by Chengdu Intermediate People’s Court, the parties agreed to cancel the demand to seize property of Sichuan Wetouch rather than the property of Chengdu Wetouch, and to waive freezing Guangde Cai’s 60% shareholding equity in Xinjiang Wetouch Electronic Technology Co., Ltd. On October 9, 2020, pursuant to a settlement and release agreement, Sichuan Wetouch, Hong Kong Wetouch and Guangde Cai are fully discharged and released from any and all obligations under the outstanding debts, and from all liabilities under guarantee with Chengdu Wetouch being responsible for the outstanding debts by December 31, 2020. On October 27, 2020, Chengdu Wetouch made a full payment of the above debts. The settlement and release agreement did not specify which party shall pay the court acceptance fee. On March 10, 2023, pursuant to an enforcement settlement agreement entered among Sichuan Renshou, Renshou Tengyi, Sichuan Wetouch, Chengdu Wetouch, and other relevant parties, Sichuan Wetouch agreed to pay the court acceptance fee of RMB 103,232 14,540 v) Legal case with Chengdu High Investment Financing Guarantee Co. on a court acceptance fee of RMB 250,000 35,211 On March 22, 2019, Chengdu High Investment Financing Guarantee Co., Ltd, (“Chengdu High Investment”) filed a lawsuit against Hong Kong Wetouch in the Chengdu Intermediate People’s Court, claiming that Hong Kong Wetouch should assume the guarantee liability for the debt payable by Chengdu Wetouch. On May 21, 2020, the court rendered a judgment ordering Hong Kong Wetouch to pay compensation of RMB 17,467,042 2,460,181 On March 16, 2023, Chengdu Wetouch, Sichuan Wetouch and Chengdu High Investment entered into a settlement enforcement agreement, confirming that Chengdu High Investment had received RMB 17,547,197 2,471,471 250,000 35,211 vi) Legal case with Hubei Lai’en Optoelectronics Technology Co., Ltd. on a product payment of RMB 157,714 22,213 Sichuan Wetouch purchased products from Hubei Lai’en Optoelectronics Technology Co., Ltd. (“Hubei Lai’en) multiple times from March to June 2019, but failed to pay the corresponding amount of RMB 137,142.7 137,143 20,571 vi) Legal case with Chengdu Hongxin Shunda Trading Co., Ltd. on settlement of accounts payable and related fund interests totalling RMB 3,021,294 425,540 In March 2022, Sichuan Vtouch purchase steel products from Chengdu Hongxin Shunda Trading Co., Ltd. (“Chengdu Hongxin”) for facility construction, but failed to settle the accounts payable on time. In July 2023, Chengdu Hongxin filed a lawsuit to a local district court against the Company and its new facility constructors (“the three defendants”) requesting the settlement of the remaining accounts payable and the corresponding fund interests, penalties and legal fees, totalling of RMB 3,021,294 425,540 vii) Legal case with Mr. Guangchuang Liu on a refund of equity transfer price and related interests totalling RMB 324,501 45,705 In July 2022 Mr. Liu entered into an equity transfer agreement with Mr. Guangde Cai and Sichuan Vtouch with the intention to subscribe the Company’s shares of 20,000 315,245 44,104 324,501 45,705 324,501 45,705 viii) Legal case with Sichuan Yali Cement Manufacturing Co., Ltd. and Sichuan Chunqiu Development & Construction Group Co. Ltd. on a debt payable of RMB RMB 1,656,480 233,310 On August 10, 2022, Sichuan Yali Cement Manufacturing Co., Ltd. (“Yali Co.”) and Sichuan Chunqiu Development & Construction Group Co. Ltd. (“ Chunqiu Co.”) entered into construction materials contract for Sichuan Vtouch’s new facility. Under this contract, Sichuan Vtouch was listed as the joint responsibility party for the payment settlement between Yali Company and Chunqiu Company. On February 15, 2023, Yali Co. filed a lawsuit against Chunqiu Co. to the Chengdu Wenjiang District People’s Court, claiming that Chunqiu Co. should pay the remaining debt of RMB RMB 1,656,480 233,310 On August 22, 2023, Chunqiu Co. appealed to Chengdu Municipal Intermediate People’s Court against Yali Co. and Sichuan Vtouch requesting Sichuan Vtouch to be responsible for this debt payable. On October 30, 2023, the court ordered Chunqiu Co. to pay pack all the debts, and Sichuan Vtouch to bear the joint and several liability for the above debts of Chunqiu Co. including a court fee of RMB 10,627 1,497 10,627 1,497 Capital Expenditure Commitment As of December 31, 2023, the Company has no capital expenditure commitment. |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | NOTE 15 — REVENUES The Company’s geographical revenue information is set forth below: SCHEDULE OF GEOGRAPHICAL REVENUE INFORMATION For the Years Ended December 31, 2023 2022 Sales in PRC $ 27,668,985 $ 26,438,509 Sales in Overseas -Republic of China (ROC, or Taiwan) 6,255,602 6,146,043 -South Korea 5,619,228 5,221,209 -Others 162,124 126,351 Sub-total 12,036,954 11,484,603 Total revenues $ 39,705,939 $ 37,923,112 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 — SUBSEQUENT EVENTS On February 20, 2024, Wetouch entered into an underwriting agreement (the “Underwriting Agreement”) with WestPark Capital, Inc. and Craft Capital Management LLC, as representatives (the “Representatives”) of the underwriters listed therein (the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters in a firm commitment underwritten public offering (the “Offering”) an aggregate of 2,160,000 5.00 324,000 The Company conducted the Offering pursuant to a Registration Statement on Form S-1 (File No. 333-270726), as amended, which was declared effective by the United States Securities and Exchange Commission on February 14, 2024 (the “Registration Statement”). The Offering was closed on February 23, 2024. The net proceeds to the Company from the Offering, after deducting the underwriting discount, the Underwriters’ fees and expenses, and the Company’s Offering expenses, are approximately $ 9.2 On February 23, 2024, pursuant to the Underwriting Agreement, the Company issued the Representatives’ Warrants (the “Representatives’ Warrants”) to the Representatives to purchase a number of shares of Common Stock equal to 2.0 125.0 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | (a) 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 and Exchange Commission (the “SEC”). The accompanying consolidated financial statements include the financial statements of Wetouch and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated upon consolidation. Deconsolidation of Sichuan Wetouch On March 30, 2023, upon transferring Sichuan Wetouch to a third-party individual for a nominal value, the Company was no longer able to operate and exert control over this subsidiary whose operation has been taken over by Sichuan Vtouch since the first quarter of 2021. As a result, Sichuan Wetouch was deconsolidated accordingly since the disposal date. The deconsolidated Sichuan Wetouch had assets, liabilities and the non-controlling interest on disposal date as the following: SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS 2023 March 30, 2023 Total assets as of deconsolidated date $ - Total liabilities as of deconsolidated date - Total gain or loss from deconsolidation $ - Upon the deconsolidation, the Company was no longer entitled to the assets and also legally released from the liabilities previously held by the deconsolidated Sichuan Wetouch, derived nil gain or loss from the deconsolidation in the consolidated statements of operations and comprehensive income for the year ended December 31, 2023. The disposal of Sichuan Wetouch did not represent a strategic shift and did not have a major effect on the Company’s operation. There was no cash outflow for the disposal for the year ended December 31, 2023. |
Uses of estimates | (b) Uses of estimates In preparing the consolidated financial statements in conformity with US 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 revenues 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 allowance for estimated uncollectible receivables, fair values of financial instruments, inventory valuations, useful lives of property, plant and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, revenue recognition and realization of deferred tax assets. Actual results could differ from those estimates. |
Cash and cash equivalents | (c) Cash and cash equivalents Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. |
Accounts receivables, net | (d) Accounts receivables, net Accounts receivables are presented net of allowance for doubtful 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. 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 collection is not probable. |
Inventory | (e) Inventory Inventory consists of raw materials, work-in-process and finished goods and is stated at the lower of cost or net realizable value. Cost is determined using a weighted average. For work-in-process and manufactured inventories, cost consists of raw materials, direct labor and an allocated portion of the Company’s production overhead. The Company writes down excess and obsolete inventory to its estimated net realizable value based upon assumptions about future demand and market conditions. For finished goods and work-in-process, if the estimated net realizable value for an inventory item, which is the estimated selling price in the ordinary course of business, less reasonably predicable costs to completion and disposal, is lower than its cost, the specific inventory item is written down to its estimated net realizable value. Net realizable value for raw materials is based on replacement cost. Provisions for inventory write-downs are included in the cost of revenues in the consolidated statements of operations. Inventories are carried at this lower cost basis until sold or scrapped. Nil 74,100 |
Convertible Promissory Notes | (f) Convertible Promissory Notes The Company accounts for its convertible promissory notes according to guidance of ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which simplifies the accounting for convertible instruments by eliminating the requirement to separate embedded conversion features from the host contract when the conversion features are not required to be accounted for as derivatives under Topic 815. We analyze the convertible notes for the existence of a beneficial conversion feature. the Company considered the three characteristics of a derivative instrument listed in ASC 815-10-15-83: (i) having one or more underlyings and one or more notional amounts or payment provisions or both; (ii) requiring no initial net investment; (iii) permitting net settlement; Since the Company’s notes have fixed interest rate, specified notional principal and settlement date, which no other events would affect specified settlement, and the Company received net proceeds after issuance costs and discount, which the Company recorded as the net proceeds or net settled investment, the management assessed that the Notes did not meet the definition of a derivative instruments and an embedded feature would not be bifurcated. The discounts on the convertible notes, are amortized to interest expense, using the effective interest method, over the terms of the related convertible notes. |
Common stock purchase warrants | (g) Common stock purchase warrants The Company also analyzed the Warrants in accordance with ASC 815, to determine whether the Warrants meet the definition of a derivative and, if so, whether the Warrants meet the scope exception of ASC 815-40, which is that contracts issued or held by the reporting entity that are both (1) indexed to its own stock and (2) classified in stockholders’ equity shall not be considered to be derivative instruments for purposes of ASC 815-40. The Company concluded that the warrants issued in the financings in November and December 2021 should be treated as a derivative liability because these warrants are entitled to a price adjustment to allow the exercise price to be increased or reduced in the event the Company issues or sells any additional shares of common stock at a price per share other than the then-applicable exercise price or without consideration, which is typically referred to as a “Down-round protection” or “anti-dilution” provision. According to ASC 815-40, the “Down-round protection” provision is not considered to be an input to the fair value of a fixed-for-fixed option on equity shares which leads the warrants to fail to be qualified as indexed to the Company’s own stock and then to fail to meet the scope exceptions of ASC 815. Therefore, the Company accounted for the warrants as derivative liabilities under ASC 815. Pursuant to ASC 815, derivatives are measured at fair value and re-measured at fair value with changes in fair value recorded in earnings at each reporting period. The Company used a black-scholes-pricing model to estimate the fair values of common stock purchase warrants at the balance sheet dates. As of December 31, 2023 and 2022, the Company recorded $ 378,371 256,957 121,413 871,677 |
Fair value of financial instruments | (h) 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, accounts receivable, prepaid expenses and other current assets, accounts payable, short-term bank loans, accrued expenses and other current liabilities, taxes payable and due to related parties, common stock purchase warrants liability, approximate the fair value of the respective assets and liabilities as of December 31, 2023 and 2022 based upon the nature of the assets and liabilities. |
Property, plant and equipment, net | (i) Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows: SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY PLANT AND EQUIPMENT Useful life Buildings 20 Machinery and equipment 10 Office and electric equipment 3 Vehicles 10 Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense 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 income and other comprehensive income in other income or expenses. |
Impairment of long-lived Assets | (l) Impairment of long-lived Assets Long-lived assets, such as property, plant and equipment, land use rights, are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. There was nil impairment of intangible assets recognized for the years ended December 31, 2023 and 2022. |
Foreign Currency Translation | (m) Foreign Currency Translation The Company uses US dollars as the reporting currency. The Company’s subsidiary HK Wetouch’s functional currency for HK Wetouch is Hong Kong dollar. The functional currency of Sichuan Vtouch is the Chinese Yuan (“RMB”). The Company’s consolidated financial statements have been translated into US$. Assets and liabilities accounts are translated using the exchange rate at each reporting period end date. Equity accounts are translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income (loss). Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations. The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ 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: SCHEDULE OF CURRENT EXCHANGE RATES December 31, 2023 December 31, 2022 Year-end spot rate US$1=RMB 7.0999 US$1=RMB 6.8972 Average rate US$1=RMB 7.0809 US$1=RMB 6.7312 |
Revenue Recognition | (n) Revenue Recognition The Company adopted Accounting Standards Codification (“ASC”) 606 using the modified retrospective approach. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. Therefore, no adjustments to opening retained earnings were necessary. ASC 606, Revenue from Contracts with customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. ASC 606 requires the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that would result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams. In accordance with ASC 606, the Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company accounts for the revenue generated from sales of its products primarily to its customers in PRC and overseas, as the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods, which the Company has control of the goods and has the ability to direct the use of goods to obtain substantially all the benefits. All of the Company’s contracts have one single performance obligation as the promise is to transfer the individual goods to customers, and there is no separately identifiable other promises in the contracts. The Company’s revenue streams are recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. The Company’s products are sold with no right of return and the Company does not provide other credits or sales incentive to customers. The Company’s sales are net of value added tax (“VAT”) and business tax and surcharges collected on behalf of tax authorities in respect of product sales. Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contract assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing when an order is placed and when shipment or delivery occurs. As of December 31, 2023 and 2022, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. Disaggregation of Revenues The Company disaggregates its revenue from contracts by geography, 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 revenues for the years ended December 31, 2023 and 2022 are disclosed in Note 14 to the financial statements. |
Selling, General and Administrative Expenses | (o) Selling, General and Administrative Expenses Selling expenses represents primarily costs of payroll, benefits, commissions for sales representatives and advertising expenses. General and administrative expenses represent primarily payroll and benefits costs for administrative employees, rent and operating costs of office premises, depreciation and amortization of office facilities, professional fees and other administrative expenses. |
Research and Development Expense | (p) Research and Development Expense Research and development costs are expensed as incurred. |
Share-Based Compensation | (q) Share-Based Compensation The Company awards share options and other equity-based instruments to its employees, directors and third party service providers (collectively “share-based payments”). Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date. The Company recognizes the compensation cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The amount of cost recognized is adjusted to reflect the expected forfeiture prior to vesting. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. |
Government grant | (r) Government grant The Company follows other authoritative accounting guidance since there is no clear guidance with regard to government grants. Government grants are recognized at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognized as income over the periods necessary to match the grant to the costs it is compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis. |
Income taxes | (s) Income taxes The Company accounts for income taxes in accordance with the asset and liability method. Deferred taxes are recognized for the future tax consequences attributable to temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and income tax purposes using enacted rates expected to be in effect when such amounts are realized or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established, as needed, to reduce the amount of deferred tax assets if it is considered more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The Company recognizes the effect of uncertain income tax positions only if those positions are more-likely-than-not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% On December 22, 2017, the Tax Cut and Jobs Act of 2017 (“the Tax Act”) was signed into law, which among other effects, reduces the U.S. federal corporate income tax rate to 21% from 34% (or 35% in certain cases) beginning in 2018 |
Value added tax (“VAT”) | (t) Value added tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price. Since April 1, 2019, VAT rate was lowered from 16 13 For export sales, VAT is not imposed on gross sales price, but the VAT related to purchasing raw materials is refunded after the export is completed. |
Earnings per Share | (u) Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. As of December 31, 2023 and 2022, warrants were included for the dilutive EPS calculation, respectively. |
Comprehensive income (loss) | (v) Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of income and comprehensive income. |
Recent Accounting Pronouncements | (w) Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), which introduces new guidance for the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale (AFS) debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The pronouncement will be effective for public business entities that are SEC filers in fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application of the guidance will be permitted for all entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted ASU 2016-13 utilizing the modified retrospective transition method on January 1, 2022. The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. In October 2021, the FASB issued ASU No. 2021-08, which will require companies to apply the definition of a performance obligation under ASC Topic 606 to recognize and measure contract assets and contract liabilities (i.e., deferred revenue) relating to contracts with customers that are acquired in a business combination. Under current U.S. GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. ASU No. 2021-08 will result in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC Topic 606. ASU No. 2021-08 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted ASU No. 2021-08 on January 1, 2023. The adoption of ASU No. 2021-08 did not have a material impact on the Company’s consolidated financial statements. In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832). This ASU requires business entities to disclose information about government assistance they receive if the transactions were accounted for by analogy to either a grant or a contribution accounting model. The disclosure requirements include the nature of the transaction and the related accounting policy used, the line items on the balance sheets and statements of operations that are affected and the amounts applicable to each financial statement line item and the significant terms and conditions of the transactions. The ASU is effective for annual periods beginning after December 15, 2021. The disclosure requirements can be applied either retrospectively or prospectively to all transactions in the scope of the amendments that are reflected in the financial statements at the date of initial application and new transactions that are entered into after the date of initial application. The ASU is currently not expected to have a material impact on the Company’s financial results or financial position. From time to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASCs are communicated through issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on its consolidated financial statements upon adoption. Recently issued accounting pronouncements not yet adopted In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional expedients and exceptions for applying U.S. GAAP on contract modifications and hedge accounting to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. These optional expedients and exceptions provided in ASU No. 2020-04 are effective for the Company as of March 12, 2020 through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”), which deferred the application dates of Topic 848 to December 31, 2024. The Group currently does not have any financial instrument that reference to LIBOR and does not anticipate the adoption will have a material impact to the Group’s combined and consolidated financial statements. In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in the group including the additional required disclosures when adopted. The Group is currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024. In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Group has evaluated this ASU and expects to add additional disclosures to our combined and consolidated financial statements, once adopted. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS | The deconsolidated Sichuan Wetouch had assets, liabilities and the non-controlling interest on disposal date as the following: SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS 2023 March 30, 2023 Total assets as of deconsolidated date $ - Total liabilities as of deconsolidated date - Total gain or loss from deconsolidation $ - |
SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY PLANT AND EQUIPMENT | SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY PLANT AND EQUIPMENT Useful life Buildings 20 Machinery and equipment 10 Office and electric equipment 3 Vehicles 10 |
SCHEDULE OF CURRENT EXCHANGE RATES | The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: SCHEDULE OF CURRENT EXCHANGE RATES December 31, 2023 December 31, 2022 Year-end spot rate US$1=RMB 7.0999 US$1=RMB 6.8972 Average rate US$1=RMB 7.0809 US$1=RMB 6.7312 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | Accounts receivable consists of the following: SCHEDULE OF ACCOUNTS RECEIVABLE December 31, 2023 December 31, 2022 Accounts receivable $ 7,455,252 $ 9,057,741 Allowance for doubtful accounts - - Accounts receivable, net $ 7,455,252 $ 9,057,741 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expenses And Other Current Assets | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets consist of the following: SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS December 31, 2023 December 31, 2022 Advance to suppliers $ 334,852 $ 333,920 VAT input credits - 355,482 Issue cost related to convertible promissory notes 64,802 81,614 Prepayment for land use right (i) 537,998 569,105 Security deposit (ii) 53,865 56,979 Others receivable (iv) 72,110 53,520 Prepaid expenses and other current assets $ 1,063,627 $ 1,450,620 (i) On July 23, 2021, Sichuan Vtouch entered into a contract with Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right of a parcel of land of 131,010 3,925,233 537,998 (ii) On July 28, 2021, Sichuan Vtouch made a security deposit of RMB 393,000 53,865 (iv) Other receivables are mainly employee advances, and prepaid expenses. |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY , PLANT AND EQUIPMENT | SCHEDULE OF PROPERTY , PLANT AND EQUIPMENT September 30, 2023 December 31, 2022 Buildings $ 12,130 $ 12,487 Machinery and equipment 3,944 - Vehicles 41,241 42,453 Construction in progress 12,825,896 10,883,051 Subtotal 12,883,211 10,937,991 Less: accumulated depreciation (23,348 ) (14,381 ) Property, plant and equipment, net $ 12,859,863 $ 10,923,610 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF RELATED PARTY TRANSACTIONS | Amounts due to a related party are as follows: SCHEDULE OF RELATED PARTY TRANSACTIONS Relationship December 31, 2023 December 31, 2022 Note Mr. Zongyi Lian President and CEO of the Company - 1,665 Payable to employee Total $ - $ 1,665 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF COMPONENTS OF THE INCOME TAX PROVISION | The components of the income tax provision are as follows: SCHEDULE OF COMPONENTS OF THE INCOME TAX PROVISION For the Years Ended December 31, 2023 2022 Current tax provision PRC $ 4,082,606 $ 3,352,802 Total current tax provision $ 4,082,606 $ 3,352,802 Deferred tax provision BVI - - Hong Kong - - China - - Total deferred tax provision - - Income tax provision $ 4,082,606 $ 3,352,802 |
SCHEDULE OF INCOME TAX RATE | The following table reconciles the PRC statutory rates to the Company’s effective tax rate for the years ended December 31, 2023 and 2022: SCHEDULE OF INCOME TAX RATE For the Years Ended December 31, 2023 2022 PRC statutory income tax rate 25.0 % 25.0 % Effect of income tax holiday 0.0 % 0.0 % Tax rate differential on entities not subject to PRC income (1.1 )% (0.5 )% R&D additional deduction (0.7 )% (1.0 )% Non-deductible expenses in the PRC 2.2 % 4.2 % Effective tax rate 25.4 % 27.7 % |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | Accrued expenses and other current liabilities consist of the following: SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, 2023 December 31, 2022 Advance from customers (i) $ 182,277 $ 397,886 Accrued payroll and employee benefits 84,280 89,359 Accrued interest expenses 240,805 122,135 Accrued private placement agent fees (ii) 1,200,000 - Accrued consulting fees (iii) 1,370,972 - Accrued litigation charges (iv) 45,828 - Accrued professional fees 330,180 - Accrued director fees 106,824 - Other tax payables (v) 143,035 261 Other payable to a former stockholder (vi) - 191,180 Others (vii) 288,704 153,803 Accrued expenses and other current liabilities $ 3,992,905 $ 944,624 (i) RMB 2,587,825 365,465 (ii) On March 18, 2023, the Company entered into a private placement consent agreement with a third-party investment bank firm (see Note 10) on the agent fees of US$ 1.2 (iii) In May, 2023, the Company entered into two third-party consulting service agreements for a fee of $ 1.35 3.1 (iv) As of December 31, 2023, the Company accrued litigation compensation of RMB 324,501 45,705 10,627 1,497 (v) Other tax payables are mainly VAT payable. (vi) Other payable to a former shareholder was paid in March 2023. (vii) Others mainly represent accrued employee reimbursement payable and other accrued miscellaneous operating expenses. |
CONVERTIBLE PROMISSORY NOTES _2
CONVERTIBLE PROMISSORY NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
SUMMARY OF OUTSTANDING PROMISSORY NOTES | The following table summarizes the outstanding promissory notes as of December 31, 2023 and December 31, 2022: SUMMARY OF OUTSTANDING PROMISSORY NOTES December 31, 2023 December 31, 2022 Interest rate Principal Amount Carrying Amount Principal Amount Carrying Amount Convertible Note - Talos Victory (Note 9 (b)) 8 % $ - $ - $ - - Convertible Note - Mast Hill (Note 9 (b)) 8 % 740,000 700,448 740,000 635,535 Convertible Note - First Fire (Note 9 (b)) 8 % 156,250 151,457 181,250 156,594 Convertible Note - LGH Note 9 (b)) 8 % 202,500 204,929 207,500 188,987 Convertible Note - Fourth Man (Note 9 (b)) 8 % 152,000 142,397 157,000 128,703 Convertible Note - Jeffery Street Note 9 (b)) 8 % 165,000 150,641 170,000 142,554 Convertible Note - Blue Lake Note 9 (b))Total 8 % - - - - Total $ 1,400,750 $ 1,349,872 $ 1,455,750 $ 1,252,373 Amortization of Discounts for the Year Ended December 31, 2023 (110,746 ) Convertible Promissory Notes payable as of December 31, 2023 $ 1,239,126 |
SCHEDULE OF FAIR VALUE OF WARRANTS | The fair values of these warrants as of December 31, 2023 were calculated using the Black-Scholes option-pricing model with the following assumptions: SCHEDULE OF FAIR VALUE OF WARRANTS December 31, 2023 Volatility (%) Expected dividends yield (%) Weighted average expected life (year) Risk-free interest rate (%) (per annum) Common stock purchase warrants liability as of December 31, 2022(US$) Changes of fair value of common stock purchase warrants liability Common stock purchase warrants liability as of December 31, 2023 (US$) Convertible Note - Talos Victory (Note 9 (a)) 545.7 % 0.0 % 0.8 5.03 % 14,803 28,310 43,113 Convertible Note - Mast Hill (Note 9 (a)) 545.7 % 0.0 % - 5.03 % 101,293 (101,293 ) - Convertible Note - First Fire (Note 9 (a)) 545.7 % 0.0 % 0.9 5.03 % 33,919 64,456 98,375 Convertible Note - LGH Note 9 (a)) 545.7 % 0.0 % 0.9 5.03 % 34,028 64,489 98,517 Convertible Note - Fourth Man (Note 9 (ab)) 545.7 % 0.0 % 0.9 5.03 % 14,398 27,241 41,639 Convertible Note - Jeffery Street Note 9 (a)) 545.7 % 0.0 % 0.9 5.03 % 34,134 (7,870 ) 26,264 Convertible Note - Blue Lake Note 9 (a)) 545.7 % 0.0 % 0.9 5.03 % 24,382 46,080 70,463 Total Total 256,957 121,413 378,371 |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF GEOGRAPHICAL REVENUE INFORMATION | The Company’s geographical revenue information is set forth below: SCHEDULE OF GEOGRAPHICAL REVENUE INFORMATION For the Years Ended December 31, 2023 2022 Sales in PRC $ 27,668,985 $ 26,438,509 Sales in Overseas -Republic of China (ROC, or Taiwan) 6,255,602 6,146,043 -South Korea 5,619,228 5,221,209 -Others 162,124 126,351 Sub-total 12,036,954 11,484,603 Total revenues $ 39,705,939 $ 37,923,112 |
BUSINESS DESCRIPTION (Details N
BUSINESS DESCRIPTION (Details Narrative) - shares | 12 Months Ended | |||
Oct. 09, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Jul. 19, 2016 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, shares issued | 9,732,948 | 1,680,248 | ||
Common stock, shares outstanding | 9,732,948 | 1,680,248 | ||
Sichuan Wetouch Technology Co Ltd [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Subsidiary ownership percentage | 100% | |||
Sichuan Wetouch Technology Co Ltd [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Ownership percentage | 100% | |||
Common Stock [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Stock issued during period, shares, reverse stock splits | 5,362 | |||
Share Exchange Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Stock issued during period, shares, reverse stock splits | 1,569,820 | |||
Share Exchange Agreement [Member] | BVI Shareholders [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Stock issued during period, shares, acquisitions | 28,000,000 | |||
Stock issued during period, shares, reverse stock splits | 1,400,000 | |||
Number of reverse merger stock | 2,800 | |||
Common stock, shares issued | 31,396,394 | |||
Common stock, shares outstanding | 31,396,394 | |||
Share Exchange Agreement [Member] | BVI Shareholders [Member] | Common Stock [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Stock issued during period, shares, reverse stock splits | 140 |
SCHEDULE OF DISPOSAL GROUPS, IN
SCHEDULE OF DISPOSAL GROUPS, INCLUDING DISCONTINUED OPERATIONS (Details) | Mar. 30, 2023 USD ($) |
Accounting Policies [Abstract] | |
Total assets as of deconsolidated date | |
Total liabilities as of deconsolidated date | |
Total gain or loss from deconsolidation |
SCHEDULE OF ESTIMATED USEFUL LI
SCHEDULE OF ESTIMATED USEFUL LIFE OF PROPERTY PLANT AND EQUIPMENT (Details) | Dec. 31, 2023 |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 20 years |
Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 10 years |
Office and Electric Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 3 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 10 years |
SCHEDULE OF CURRENT EXCHANGE RA
SCHEDULE OF CURRENT EXCHANGE RATES (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Year-End Spot Rate US$1=RMB [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Foreign exchange rate | 7.0999 | 6.8972 |
Average Rate US$1=RMB [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Foreign exchange rate | 7.0809 | 6.7312 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |||
Apr. 01, 2019 | Mar. 31, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||||
Inventory write-off | $ 74,100 | |||
Common stock purchase warrants liability | 378,371 | 256,957 | ||
Gain on changes in fair value of common stock purchase warrants liability | $ (121,413) | $ 871,677 | ||
Income tax percentage description | greater than 50% | |||
Income tax, description | The CIT Law and its implementation rules impose a withholding income tax at 10%, unless reduced by a tax treaty or arrangement, on the amount of dividends distributed by a PRC-resident enterprise to its immediate holding company outside the PRC that are related to earnings accumulated beginning on January 1, 2008. Dividends relating to undistributed earnings generated prior to January 1, 2008 are exempt from such withholding income tax. | |||
Value added tax rate | 13% | 16% | ||
Tax Cut and Jobs Act [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax, description | On December 22, 2017, the Tax Cut and Jobs Act of 2017 (“the Tax Act”) was signed into law, which among other effects, reduces the U.S. federal corporate income tax rate to 21% from 34% (or 35% in certain cases) beginning in 2018 |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts receivable | $ 7,455,252 | $ 9,057,741 |
Allowance for doubtful accounts | ||
Accounts receivable, net | $ 7,455,252 | $ 9,057,741 |
SCHEDULE OF PREPAID EXPENSES AN
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | |
Prepaid Expenses And Other Current Assets | |||
Advance to suppliers | $ 334,852 | $ 333,920 | |
VAT input credits | 355,482 | ||
Issue cost related to convertible promissory notes | 64,802 | 81,614 | |
Prepayment for land use right | [1] | 537,998 | 569,105 |
Security deposit | [2] | 53,865 | 56,979 |
Others receivable | [3] | 72,110 | 53,520 |
Prepaid expenses and other current assets | $ 1,063,627 | $ 1,450,620 | |
[1]On July 23, 2021, Sichuan Vtouch entered into a contract with Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right of a parcel of land of 131,010 3,925,233 537,998 393,000 53,865 |
SCHEDULE OF PREPAID EXPENSES _2
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) (Parenthetical) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jul. 28, 2021 USD ($) | Jul. 28, 2021 CNY (¥) | Jul. 23, 2021 USD ($) ft² | Jul. 23, 2021 CNY (¥) ft² | |
Prepayment for land use right | [1] | $ 537,998 | $ 569,105 | ||||
Security deposit | [2] | $ 53,865 | $ 56,979 | ||||
Sichuan V touch Technology Co Ltd [Member] | |||||||
Area of land | ft² | 131,010 | 131,010 | |||||
Prepayment for land use right | $ 537,998 | ¥ 3,925,233 | |||||
Security deposit | $ 53,865 | ¥ 393,000 | |||||
[1]On July 23, 2021, Sichuan Vtouch entered into a contract with Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right of a parcel of land of 131,010 3,925,233 537,998 393,000 53,865 |
SCHEDULE OF PROPERTY , PLANT AN
SCHEDULE OF PROPERTY , PLANT AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 12,883,211 | $ 10,937,991 |
Less: accumulated depreciation | (23,348) | (14,381) |
Property, plant and equipment, net | 12,859,863 | 10,923,610 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 12,130 | 12,487 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 3,944 | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 41,241 | 42,453 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 12,825,896 | $ 10,883,051 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) | 9 Months Ended | 12 Months Ended | 34 Months Ended | |||||
Mar. 18, 2021 USD ($) | Mar. 18, 2021 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Oct. 31, 2024 USD ($) | Oct. 31, 2024 CNY (¥) | |
Depreciation expense | $ 9,465 | $ 9,891 | ||||||
Compensation expenses | $ 16,200,000 | ¥ 115,200,000 | ||||||
Sichuan V touch Technology Co Ltd [Member] | ||||||||
Rent expenses | $ 42,254 | ¥ 300,000 | $ 56,339 | ¥ 400,000 | ||||
Lease renewal description | renewed on December 31, 2021 at a monthly rent of RMB 400,000 ($56,339) with a term from January 1, 2022 to October 31, 2024 for the use of the Demised Properties. | renewed on December 31, 2021 at a monthly rent of RMB 400,000 ($56,339) with a term from January 1, 2022 to October 31, 2024 for the use of the Demised Properties. |
SCHEDULE OF RELATED PARTY TRANS
SCHEDULE OF RELATED PARTY TRANSACTIONS (Details) - Related Party [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||
Amounts due from related party | $ 1,665 | |
Mr Zongyi Lian [Member] | ||
Related Party Transaction [Line Items] | ||
Related party transaction relationship | President and CEO of the Company | |
Amounts due from related party | $ 1,665 |
SCHEDULE OF COMPONENTS OF THE I
SCHEDULE OF COMPONENTS OF THE INCOME TAX PROVISION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Total current tax provision | $ 4,082,606 | $ 3,352,802 |
Total deferred tax provision | ||
Income tax provision | 4,082,606 | 3,352,802 |
PRC [Member] | ||
Total current tax provision | 4,082,606 | 3,352,802 |
B V I [Member] | ||
Total deferred tax provision | ||
HONG KONG | ||
Total deferred tax provision | ||
CHINA | ||
Total deferred tax provision |
SCHEDULE OF INCOME TAX RATE (De
SCHEDULE OF INCOME TAX RATE (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
PRC statutory income tax rate | 25% | 25% |
Effect of income tax holiday | 0% | 0% |
Tax rate differential on entities not subject to PRC income | (1.10%) | (0.50%) |
R&D additional deduction | (0.70%) | (1.00%) |
Non-deductible expenses in the PRC | 2.20% | 4.20% |
Effective tax rate | 25.40% | 27.70% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | 36 Months Ended | ||
Jan. 01, 2008 | Dec. 31, 2023 | Dec. 31, 2022 | Oct. 11, 2020 | |
Statutory income tax rate | 21% | |||
Income tax rate | 25.40% | 27.70% | ||
Income tax description | The CIT Law and its implementation rules impose a withholding income tax at 10%, unless reduced by a tax treaty or arrangement, on the amount of dividends distributed by a PRC-resident enterprise to its immediate holding company outside the PRC that are related to earnings accumulated beginning on January 1, 2008. Dividends relating to undistributed earnings generated prior to January 1, 2008 are exempt from such withholding income tax. | |||
Deferred tax assets | $ 0 | $ 0 | ||
Sichuan Wetouch Technology Co Ltd [Member] | ||||
Income tax description | On October 21, 2020, Sichuan Wetouch was granted on a case-by-case basis by Sichuan Provincial government as an HNTE , entitled to a reduced income tax rate of 15% from October 21, 2020 until October 20, 2023. | |||
HONG KONG | ||||
Income tax rate | 16.50% | |||
PRC [Member] | ||||
Statutory income tax rate | 25% | 25% | ||
Income tax rate | 15% |
SCHEDULE OF ACCRUED EXPENSES AN
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |||
Advance from customers | [1] | $ 182,277 | $ 397,886 |
Accrued payroll and employee benefits | 84,280 | 89,359 | |
Accrued interest expenses | 240,805 | 122,135 | |
Accrued private placement agent fees | [2] | 1,200,000 | |
Accrued consulting fees | [3] | 1,370,972 | |
Accrued litigation charges | [4] | 45,828 | |
Accrued professional fees | 330,180 | ||
Accrued director fees | 106,824 | ||
Other tax payables | [5] | 143,035 | 261 |
Other payable to a former stockholder | [6] | 191,180 | |
Others | [7] | 288,704 | 153,803 |
Accrued expenses and other current liabilities | $ 3,992,905 | $ 944,624 | |
[1]RMB 2,587,825 365,465 1.2 1.35 3.1 324,501 45,705 10,627 1,497 |
SCHEDULE OF ACCRUED EXPENSES _2
SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) (Parenthetical) | 12 Months Ended | ||||||
Dec. 31, 2023 USD ($) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 CNY (¥) | May 31, 2023 USD ($) | Mar. 18, 2023 USD ($) | Dec. 31, 2022 USD ($) | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Advance from customers revenue recognized | $ 365,465 | ¥ 2,587,825 | |||||
Accrued underwriter fees | $ 1,200,000 | ||||||
Accrued consulting fees | [1] | 1,370,972 | |||||
Accrued litigation compensation | 45,705 | ¥ 324,501 | |||||
Court fees | 1,497 | 10,627 | |||||
Third Party Consulting Agreement One [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Accrued consulting fees | $ 1,350,000 | ||||||
Third Party Consulting Agreement Two [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Accrued consulting fees | $ 3,100,000 | ||||||
Legal case with Chunqiu Co [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Court fees | 1,497 | 10,627 | |||||
Legal case with Sichuan Wetouch [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Court fees | $ 1,497 | ¥ 10,627 | |||||
[1]In May, 2023, the Company entered into two third-party consulting service agreements for a fee of $ 1.35 3.1 |
SUMMARY OF OUTSTANDING PROMISSO
SUMMARY OF OUTSTANDING PROMISSORY NOTES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Short-Term Debt [Line Items] | ||
Principal amount | $ 1,400,750 | $ 1,455,750 |
Carrying amount | 1,349,872 | 1,252,373 |
Amortization of discounts | (110,746) | |
Convertible promissory notes payable | $ 1,239,126 | 1,277,282 |
Convertible Note - Talos Victory [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 8% | |
Principal amount | ||
Carrying amount | ||
Convertible Note-Mast Hill [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 8% | |
Principal amount | $ 740,000 | 740,000 |
Carrying amount | $ 700,448 | 635,535 |
Convertible Note-First Fire [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 8% | |
Principal amount | $ 156,250 | 181,250 |
Carrying amount | $ 151,457 | 156,594 |
Convertible Note-LGH [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 8% | |
Principal amount | $ 202,500 | 207,500 |
Carrying amount | $ 204,929 | 188,987 |
Convertible Note -Fourth Man [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 8% | |
Principal amount | $ 152,000 | 157,000 |
Carrying amount | $ 142,397 | 128,703 |
Convertible Note Jeffery Street [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 8% | |
Principal amount | $ 165,000 | 170,000 |
Carrying amount | $ 150,641 | 142,554 |
Convertible Note -Blue Lake [Member] | ||
Short-Term Debt [Line Items] | ||
Interest rate | 8% | |
Principal amount | ||
Carrying amount |
SCHEDULE OF FAIR VALUE OF WARRA
SCHEDULE OF FAIR VALUE OF WARRANTS (Details) | 12 Months Ended | |
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Short-Term Debt [Line Items] | ||
Common stock purchase sarrants liability | $ 378,371 | $ 256,957 |
Changes of fair value of common stock purchase warrants liability | 121,413 | |
Convertible Note - Talos Victory [Member] | ||
Short-Term Debt [Line Items] | ||
Common stock purchase sarrants liability | 43,113 | 14,803 |
Changes of fair value of common stock purchase warrants liability | 28,310 | |
Convertible Note-Mast Hill [Member] | ||
Short-Term Debt [Line Items] | ||
Common stock purchase sarrants liability | 101,293 | |
Changes of fair value of common stock purchase warrants liability | (101,293) | |
Convertible Note-First Fire [Member] | ||
Short-Term Debt [Line Items] | ||
Common stock purchase sarrants liability | 98,375 | 33,919 |
Changes of fair value of common stock purchase warrants liability | 64,456 | |
Convertible Note-LGH [Member] | ||
Short-Term Debt [Line Items] | ||
Common stock purchase sarrants liability | 98,517 | 34,028 |
Changes of fair value of common stock purchase warrants liability | 64,489 | |
Convertible Note -Fourth Man [Member] | ||
Short-Term Debt [Line Items] | ||
Common stock purchase sarrants liability | 41,639 | 14,398 |
Changes of fair value of common stock purchase warrants liability | 27,241 | |
Convertible Note Jeffery Street [Member] | ||
Short-Term Debt [Line Items] | ||
Common stock purchase sarrants liability | 26,264 | 34,134 |
Changes of fair value of common stock purchase warrants liability | (7,870) | |
Convertible Note -Blue Lake [Member] | ||
Short-Term Debt [Line Items] | ||
Common stock purchase sarrants liability | 70,463 | $ 24,382 |
Changes of fair value of common stock purchase warrants liability | $ 46,080 | |
Measurement Input, Price Volatility [Member] | Convertible Note - Talos Victory [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 545.7 | |
Measurement Input, Price Volatility [Member] | Convertible Note-Mast Hill [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 545.7 | |
Measurement Input, Price Volatility [Member] | Convertible Note-First Fire [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 545.7 | |
Measurement Input, Price Volatility [Member] | Convertible Note-LGH [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 545.7 | |
Measurement Input, Price Volatility [Member] | Convertible Note -Fourth Man [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 545.7 | |
Measurement Input, Price Volatility [Member] | Convertible Note Jeffery Street [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 545.7 | |
Measurement Input, Price Volatility [Member] | Convertible Note -Blue Lake [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 545.7 | |
Measurement Input, Expected Dividend Rate [Member] | Convertible Note - Talos Victory [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 0 | |
Measurement Input, Expected Dividend Rate [Member] | Convertible Note-Mast Hill [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 0 | |
Measurement Input, Expected Dividend Rate [Member] | Convertible Note-First Fire [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 0 | |
Measurement Input, Expected Dividend Rate [Member] | Convertible Note-LGH [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 0 | |
Measurement Input, Expected Dividend Rate [Member] | Convertible Note -Fourth Man [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 0 | |
Measurement Input, Expected Dividend Rate [Member] | Convertible Note Jeffery Street [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 0 | |
Measurement Input, Expected Dividend Rate [Member] | Convertible Note -Blue Lake [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 0 | |
Measurement Input, Expected Term [Member] | Convertible Note - Talos Victory [Member] | ||
Short-Term Debt [Line Items] | ||
Weighted average expected life | 9 months 18 days | |
Measurement Input, Expected Term [Member] | Convertible Note-Mast Hill [Member] | ||
Short-Term Debt [Line Items] | ||
Weighted average expected life | ||
Measurement Input, Expected Term [Member] | Convertible Note-First Fire [Member] | ||
Short-Term Debt [Line Items] | ||
Weighted average expected life | 10 months 24 days | |
Measurement Input, Expected Term [Member] | Convertible Note-LGH [Member] | ||
Short-Term Debt [Line Items] | ||
Weighted average expected life | 10 months 24 days | |
Measurement Input, Expected Term [Member] | Convertible Note -Fourth Man [Member] | ||
Short-Term Debt [Line Items] | ||
Weighted average expected life | 10 months 24 days | |
Measurement Input, Expected Term [Member] | Convertible Note Jeffery Street [Member] | ||
Short-Term Debt [Line Items] | ||
Weighted average expected life | 10 months 24 days | |
Measurement Input, Expected Term [Member] | Convertible Note -Blue Lake [Member] | ||
Short-Term Debt [Line Items] | ||
Weighted average expected life | 10 months 24 days | |
Measurement Input, Risk Free Interest Rate [Member] | Convertible Note - Talos Victory [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 5.03 | |
Measurement Input, Risk Free Interest Rate [Member] | Convertible Note-Mast Hill [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 5.03 | |
Measurement Input, Risk Free Interest Rate [Member] | Convertible Note-First Fire [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 5.03 | |
Measurement Input, Risk Free Interest Rate [Member] | Convertible Note-LGH [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 5.03 | |
Measurement Input, Risk Free Interest Rate [Member] | Convertible Note -Fourth Man [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 5.03 | |
Measurement Input, Risk Free Interest Rate [Member] | Convertible Note Jeffery Street [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 5.03 | |
Measurement Input, Risk Free Interest Rate [Member] | Convertible Note -Blue Lake [Member] | ||
Short-Term Debt [Line Items] | ||
Warrants measurement input | 5.03 |
CONVERTIBLE PROMISSORY NOTES _3
CONVERTIBLE PROMISSORY NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||||
Sep. 09, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 01, 2022 | Apr. 27, 2022 | Apr. 14, 2022 | Dec. 31, 2021 | Nov. 30, 2021 | Oct. 31, 2021 | |
Short-Term Debt [Line Items] | |||||||||
Principal amount | $ 1,400,750 | $ 1,455,750 | |||||||
Conversion price | $ 25,000 | ||||||||
Debt instrument, convertible, description | From August 29 to September 9, 2023, the lenders of the outstanding Notes and the Company entered into an amendment to the Notes (“Amendment to Promissory Note”) that the Company’s ordinary shares on the Nasdaq Capital Market (the “Uplist”), the Company shall within three (3) business days after the Uplist, pay to the Holders amounts equal to 105% of the total outstanding balance of the Convertible Debenture. | ||||||||
Senior notes | $ 1,200,000 | ||||||||
Number of shares converted | 25,000 | ||||||||
Debt conversion amount | $ 1,038,426 | ||||||||
Conversion of shares | 69,228 | ||||||||
Interest expense, debt | $ 252,325 | $ 224,885 | |||||||
Proceeds from legal settlements | $ 10,000 | ||||||||
Warrants to purchase | 6,211 | 2,857 | 5,599 | 5,777 | |||||
Cashless warrant shares exercised | 22,338 | 14,233 | |||||||
Warrant [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Warrants outstanding | 35,861 | ||||||||
Warrant [Member] | Lenders [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Ownership percentage | 4.90% | ||||||||
Lenders Seven [Member] | Warrant [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Warrants outstanding | 90,000 | ||||||||
Lenders [Member] | Warrant [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Warrants to purchase | 10,000 | ||||||||
Excise price | $ 25 | ||||||||
Excise price, percentage | 125% | ||||||||
Two Lenders [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Cashless warrant shares exercised | 22,338 | ||||||||
Seven Convertible Promissory Note [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Principal amount | $ 2,250,000 | $ 2,250,000 | $ 2,250,000 | ||||||
Issuance price discounted percentage | 90% | 90% | 90% | ||||||
Default interest rate | 8% | 8% | 8% | 8% | |||||
Proceeds from debt issuance costs | $ 1,793,000 | ||||||||
Debt issuance costs | 162,000 | ||||||||
Gross proceeds | $ 15,000,000 | ||||||||
Conversion price, percentage | 70% | ||||||||
Conversion price | $ 15 | ||||||||
Convertible Notes Payable [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Default interest rate | 16% | ||||||||
Promissory Note [Member] | Lender [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Percentage of prepayment penalty | 10% |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) | 12 Months Ended | ||||||||||||
Jul. 16, 2023 | Feb. 17, 2023 | Jan. 20, 2023 USD ($) | Jan. 19, 2023 USD ($) $ / shares shares | Jan. 02, 2021 shares | Dec. 22, 2020 shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2022 CNY (¥) shares | Sep. 01, 2022 shares | Apr. 27, 2022 shares | Apr. 14, 2022 shares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Common stock, shares authorized | 15,000,000 | 15,000,000 | 15,000,000 | 15,000,000 | |||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||||||||
Cashless warrant shares exercised | 6,211 | 6,211 | 2,857 | 5,599 | 5,777 | ||||||||
Net proceeds | $ | $ 40,000,000 | ||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 25,000 | ||||||||||||
Cashless warrant shares exercised | 22,338 | 14,233 | 22,338 | 14,233 | |||||||||
Common stock, shares, issued | 9,732,948 | 1,680,248 | 9,732,948 | 1,680,248 | |||||||||
Common stock, shares, outstanding | 9,732,948 | 1,680,248 | 9,732,948 | 1,680,248 | |||||||||
Stockholders' equity note, stock split | the Company’s board of directors approved the reverse stock split of the Company’s common stock at a ratio of 1-for-20. On July 16, 2023, the Company filed a certificate of change (with an effective date of July 16, 2023) with the Nevada Secretary of State pursuant to Section 78.209 of the Nevada Revised Statutes to effectuate a 1-for-20 reverse stock split of its common stock. On September 11, 2023, the reverse stock split was approved by the Financial Industry Regulatory Authority and took effect on September 12, 2023. All share information included in this annual report has been adjusted as if the reverse stock split occurred as of the earliest period presented. | the Company’s board of directors authorized a reverse stock split of common stock with a ratio of not less than one to five (1:5) and not more than one to eighty (1:80), with the exact amount and the timing of the reverse stock split to be determined by the Chairman of the Board. Upon effectiveness of such reverse stock split, the number of authorized shares of the common stock of the Company will also be decreased in the same ratio. Pursuant to Section 78.209 of the Nevada Revised Statutes, the reverse stock split does not have to be approved by the stockholders of the Company. | |||||||||||
Private Placement [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Number of shares issued in transaction | 8,000,000 | ||||||||||||
Value of stock sold | $ | $ 40,000,000 | ||||||||||||
Share price | $ / shares | $ 5 | ||||||||||||
Net proceeds | $ | $ 40,000,000 | ||||||||||||
Common Stock [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Conversion of convertible debt | 69,228 | ||||||||||||
Third Party Service Provider [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Number of shares issued for services | 15,541 | ||||||||||||
The Crone Law Group, P.C. [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Number of shares issued for services | 5,181 | ||||||||||||
Sichuan Wetouch Technology Co Ltd [Member] | |||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||
Reserve fund | $ 1,154,131 | $ 973,718 | ¥ 8,172,303 | ¥ 6,554,271 |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | |||
Sep. 21, 2022 | Jan. 01, 2021 | Dec. 22, 2020 | Dec. 31, 2023 | |
Warrant [Member] | ||||
Warrants outstanding | 35,861 | |||
Weighted average exercise price | $ 0.2 | |||
Weighted average remaining contractual term | 2 months 12 days | |||
Aggregate intrinsic value | $ 300,000 | |||
Board of Directors [Member] | ||||
Number of shares authorized | 15,541 | |||
Number of shares vested | 15,541 | |||
Expected term | 2 years 6 months | |||
Expected dividend rate | 0% | |||
Average interest rate | 0.12% | |||
Expected volatility | 51.30% | |||
Board of Directors [Member] | Warrant [Member] | ||||
Number of shares authorized | 31,554 | |||
Number of shares vested | 31,554 | |||
Board of Directors [Member] | The Crone Law Group, P.C. [Member] | ||||
Number of shares authorized | 5,181 | |||
Number of shares vested | 5,181 | |||
Number of warrants exercised | 4,307 | 6,211 | ||
Expected term | 2 years 6 months | |||
Expected dividend rate | 0% | |||
Expected volatility | 43.50% | |||
Average interest rate | 0.11% | |||
Board of Directors [Member] | The Crone Law Group, P.C. [Member] | Warrant [Member] | ||||
Number of shares authorized | 10,518 |
RISKS AND UNCERTAINTIES (Detail
RISKS AND UNCERTAINTIES (Details Narrative) - CNY (¥) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 22.50% | 21.20% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 16.50% | 16.10% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15.60% | 14.80% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Four [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 14.10% | 13.70% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Five [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.30% | 11.90% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer Six [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.10% | 10.10% |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Top 10 Customers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 99.70% | 98.70% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 31.70% | 32.20% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 16.20% | 22.80% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15.80% | 14% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Four [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.50% | |
Purchases Raw Material [Member] | Product Concentration Risk [Member] | One Suppliers [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13.30% | |
Purchases Raw Material [Member] | Product Concentration Risk [Member] | Supplier One [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13.20% | |
Purchases Raw Material [Member] | Product Concentration Risk [Member] | Supplier Two [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12.70% | |
Purchases Raw Material [Member] | Product Concentration Risk [Member] | Supplier Three [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.70% | |
Purchases Raw Material [Member] | Product Concentration Risk [Member] | Supplier Four [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.60% | |
Maximum [Member] | ||
Concentration Risk [Line Items] | ||
Bank deposits | ¥ 500,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | 12 Months Ended | 132 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
Feb. 15, 2023 USD ($) | Feb. 15, 2023 CNY (¥) | May 31, 2022 CNY (¥) | May 09, 2022 USD ($) | May 09, 2022 CNY (¥) | Dec. 23, 2021 USD ($) | Dec. 23, 2021 CNY (¥) | Oct. 27, 2020 USD ($) | Oct. 27, 2020 CNY (¥) | Sep. 16, 2020 USD ($) | Sep. 16, 2020 CNY (¥) | May 21, 2020 USD ($) | May 21, 2020 CNY (¥) | Nov. 21, 2019 USD ($) | Nov. 21, 2019 CNY (¥) | Aug. 23, 2018 USD ($) | Aug. 23, 2018 CNY (¥) | Aug. 22, 2018 USD ($) | Aug. 22, 2018 CNY (¥) | Jun. 22, 2017 USD ($) shares | Jul. 31, 2014 USD ($) | Jul. 31, 2014 CNY (¥) | Mar. 19, 2014 USD ($) | Mar. 19, 2014 CNY (¥) | Jul. 05, 2013 USD ($) | Jul. 31, 2023 USD ($) | Jul. 31, 2023 CNY (¥) | Apr. 30, 2023 USD ($) | Apr. 30, 2023 CNY (¥) | Jul. 31, 2022 USD ($) shares | Jul. 31, 2022 CNY (¥) shares | Nov. 30, 2018 USD ($) | Nov. 30, 2018 CNY (¥) | Nov. 20, 2014 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 CNY (¥) | Aug. 09, 2032 USD ($) | Aug. 09, 2032 CNY (¥) | Dec. 31, 2023 CNY (¥) | Mar. 16, 2023 USD ($) | Mar. 16, 2023 CNY (¥) | Mar. 10, 2023 USD ($) | Mar. 10, 2023 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Mar. 12, 2020 USD ($) | Mar. 12, 2020 CNY (¥) | Dec. 30, 2018 USD ($) | Dec. 30, 2018 CNY (¥) | Dec. 31, 2017 USD ($) | Jun. 22, 2017 CNY (¥) | Jul. 31, 2014 CNY (¥) | Mar. 19, 2014 CNY (¥) | Jul. 05, 2013 CNY (¥) | |
Loan obtained during period | $ | $ 1,400,750 | $ 1,455,750 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Dispute Case With Yunqing Su [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount paid | $ 185,721 | ¥ 1,318,604 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment | $ 140,847 | ¥ 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 370,370.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest paid | $ 30,986 | ¥ 220,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt payable | $ 18,028 | ¥ 128,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal Case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt payable | $ 700,000 | ¥ 5,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan obtained during period | 7,700,000 | ¥ 55,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal Case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Related to 30% of Remaining Loan Repaid By Chengdu SME [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan, default penalty | 800,000 | $ 800,000 | ¥ 5,800,000 | $ 800,000 | ¥ 5,800,000 | 5,800,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Legal Case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Related to 70% of Remaining Loan Repaid By Chengdu SME [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan, default penalty | $ 800,000 | $ 800,000 | ¥ 6,000,000 | $ 800,000 | ¥ 6,000,000 | ¥ 6,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Legal Case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Chengdu SME Credit Guarantee Co., Ltd. [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt payable | $ 1,700,000 | ¥ 11,800,000 | $ 7,700,000 | ¥ 55,000,000 | $ 7,700,000 | ¥ 55,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Acceptance fee | $ 47,665 | ¥ 338,418 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan, default penalty | $ | $ 1,700,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal Case with Chengdu SME Credit Guarantee Co., Ltd. [Member] | Chengdu SME Credit Guarantee Co., Ltd. [Member] | Bank of Chengdu [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ 8,500,000 | ¥ 60,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument, interest rate | 8.61% | 8.61% | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument, description | Chengdu SME Credit Guarantee Co., Ltd (“Chengdu SME”), a third party, provided a 70% guarantee and Bank of Chengdu retained 30% of the risk, while Chengdu Wetouch , a related party company, owned by Mr. Guangde Cai and Mr. Guangde Cai provided joint and several liability guarantee for 100% of the loan. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal Case With Zhuhai Hongguang Technology Co Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acceptance fee | $ 35,278 | ¥ 250,470 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal Case With Lifan Financial Leasing Co Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount paid | $ 3,200,000 | ¥ 22,905,807 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease price | ¥ 20,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease rate | 8% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding payment | $ 3,200,000 | ¥ 22,905,807 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. [Member] | Chengdu Bank Co, Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt payable | ¥ 12,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Acceptance fee | $ 14,540 | ¥ 103,232 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan obtained during period | $ 2,100,000 | ¥ 15,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt instrument, description | To support the local economic development as well as Chengdu Wetouch, two government-backed companies, Sichuan Renshou Shigao Tianfu Investment Co., Ltd. (“Sichuan Renshou”) and Renshou Tengyi Landscaping Co., Ltd. (“Renshou Tengyi”) provided their bank deposits of RMB 12.0 million (equivalent to $1.7 million) as pledge, while Mr. Guangde Cai and Sichuan Wetouch also provided counter-guarantee. | To support the local economic development as well as Chengdu Wetouch, two government-backed companies, Sichuan Renshou Shigao Tianfu Investment Co., Ltd. (“Sichuan Renshou”) and Renshou Tengyi Landscaping Co., Ltd. (“Renshou Tengyi”) provided their bank deposits of RMB 12.0 million (equivalent to $1.7 million) as pledge, while Mr. Guangde Cai and Sichuan Wetouch also provided counter-guarantee. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Pledged bank deposits for debt, value | $ 1,700,000 | ¥ 12,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss contingency damages sought value | $ 1,700,000 | ¥ 12,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal Case With Chengdu High Investment Financing Guarantee Co Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acceptance fee | $ 35,211 | ¥ 250,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding payment | $ 2,460,181 | ¥ 17,467,042 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from Legal Settlements | $ 2,471,471 | ¥ 17,547,197 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal Case With Hubei Laien Optoelectronics Technology Co Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount paid | 22,213 | ¥ 157,714 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding payment | ¥ 137,143 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable, trade | ¥ 137,142.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Liquidated damages | ¥ 20,571 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal case with cheng du Hong xin Shunda Trading Co Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount paid | $ 425,540 | ¥ 3,021,294 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal case with Mr Guangchuang Lin [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount paid | $ 45,705 | ¥ 324,501 | $ 45,705 | ¥ 324,501 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other liabilities | 45,705 | ¥ 324,501 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal case with Mr Guangde Cai And Sichuan Wetouch [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount paid | $ 44,104 | ¥ 315,245 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares issued | shares | 20,000 | 20,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal case with Sichuan Yali Cement Manufacturing Co Ltd and Sichuan Chunqiu Development And Construction Group Co Ltd [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt payable | $ 233,310 | ¥ 1,656,480 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal case with Chunqiu Co [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt payable | $ 233,310 | ¥ 1,656,480 |
SCHEDULE OF GEOGRAPHICAL REVENU
SCHEDULE OF GEOGRAPHICAL REVENUE INFORMATION (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Sales in PRC | $ 27,668,985 | $ 26,438,509 |
Sub-total | 12,036,954 | 11,484,603 |
Total revenues | 39,705,939 | 37,923,112 |
Republic of China [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Sub-total | 6,255,602 | 6,146,043 |
KOREA, REPUBLIC OF | ||
Disaggregation of Revenue [Line Items] | ||
Sub-total | 5,619,228 | 5,221,209 |
Others [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Sub-total | $ 162,124 | $ 126,351 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Underwriting Agreement [Member] - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Millions | Feb. 23, 2024 | Feb. 20, 2024 |
Subsequent Event [Line Items] | ||
Number of stock sold | 2,160,000 | |
Offering price | $ 5 | |
Purchase of additional shares | 324,000 | |
Offering expenses | $ 9.2 | |
Representatives Warrants [Member] | ||
Subsequent Event [Line Items] | ||
Number of shares, percentage | 2% | |
Percentage of exercise price | 125% |