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What changed in Wetouch Technology Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Wetouch Technology Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+357 added−405 removedSource: 10-K (2025-09-11) vs 10-K (2024-04-17)

Top changes in Wetouch Technology Inc.'s 2024 10-K

357 paragraphs added · 405 removed · 240 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

83 edited+18 added−17 removed124 unchanged
Biggest changeBased on the foregoing, if we intend to provide funding to our wholly foreign-owned subsidiaries through capital injection at or after their establishment, we must register the establishment of and any follow-on capital increase in our wholly foreign-owned subsidiaries with the State Administration for Market Regulation or its local counterparts, file such via the enterprise registration system, and register such with the local banks for the foreign exchange related matters. 17 Regulations on Offshore Financing Under the Circular of the SAFE on Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-Trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, effective on July 4, 2014, Mainland China residents are required to register with the local SAFE branch prior to the establishment or control of an offshore special purpose vehicle, which is defined as an offshore enterprise directly established or indirectly controlled by Mainland China residents for investment and financing purposes, with the enterprise assets or interests Mainland China residents hold in Mainland China or overseas.
Biggest changeRegulations on Offshore Financing Under the Circular of the SAFE on Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-Trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, effective on July 4, 2014, Mainland China residents are required to register with the local SAFE branch prior to the establishment or control of an offshore special purpose vehicle, which is defined as an offshore enterprise directly established or indirectly controlled by Mainland China residents for investment and financing purposes, with the enterprise assets or interests Mainland China residents hold in Mainland China or overseas.
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. 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.
Upon effectiveness of such reverse stock split, the number of authorized shares of common stock of the Company will also be decreased in the same ratio. 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.
Industry Since inception, we have positioned ourselves in the professional touchscreen display industry. Touchscreen is an input and output device and layered on top of an electronic visual display of an information processing system, allowing individuals to access information and interact with the device simply by touching the device’s screen with a finger or a specialized tool.
Industry Since inception, we have positioned ourselves in the professional touchscreen display industry. A touchscreen is an input and output device and layered on top of an electronic visual display of an information processing system, allowing individuals to access information and interact with the device simply by touching the device’s screen with a finger or a specialized tool.
This section sets forth a summary of the most significant rules and regulations that affect our business activities in Mainland China. 13 Regulations Relating to Foreign Investment in Mainland China On March 15, 2019, the National People’s Congress promulgated the Foreign Investment Law, which came into effect on January 1, 2020 and replaced three existing laws on foreign investments in China, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture Law, and the Wholly Foreign-Owned Enterprise Law, together with their implementation rules and ancillary regulations.
This section sets forth a summary of the most significant rules and regulations that affect our business activities in Mainland China. 15 Regulations Relating to Foreign Investment in Mainland China On March 15, 2019, the National People’s Congress promulgated the Foreign Investment Law, which came into effect on January 1, 2020 and replaced three existing laws on foreign investments in China, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture Law, and the Wholly Foreign-Owned Enterprise Law, together with their implementation rules and ancillary regulations.
The Implementation Rules of Foreign Investment Law restates certain principles of the Foreign Investment Law and further provides that, among others, (i) if the legal form or the governing structure of an FIE established prior to the effective date of the Foreign Investment Law does not comply with the compulsory provisions of the PRC Company Law or the PRC Partnership Enterprises Law, such FIE should complete amendment registration accordingly no later than January 1, 2025; if it fails to do so, the enterprise registration authority will not process other registration matters of the FIE and may publicize such non-compliance; and (ii) the provisions regarding transfer of equity interests, distribution of profits and remaining assets as stipulated in the joint venture contracts of an existing FIE may survive the Foreign Investment Law during its joint venture term. 14 Regulations on Environmental Protection Environmental Protection Law The Environmental Protection Law of the PRC, or the Environmental Protection Law, was promulgated and effective on December 26, 1989, and most recently amended on April 24, 2014, which amendments became effective January 1, 2015.
The Implementation Rules of Foreign Investment Law restates certain principles of the Foreign Investment Law and further provides that, among others, (i) if the legal form or the governing structure of an FIE established prior to the effective date of the Foreign Investment Law does not comply with the compulsory provisions of the PRC Company Law or the PRC Partnership Enterprises Law, such FIE should complete amendment registration accordingly no later than January 1, 2025; if it fails to do so, the enterprise registration authority will not process other registration matters of the FIE and may publicize such non-compliance; and (ii) the provisions regarding transfer of equity interests, distribution of profits and remaining assets as stipulated in the joint venture contracts of an existing FIE may survive the Foreign Investment Law during its joint venture term. 16 Regulations on Environmental Protection Environmental Protection Law The Environmental Protection Law of the PRC, or the Environmental Protection Law, was promulgated and effective on December 26, 1989, and most recently amended on April 24, 2014, which amendments became effective January 1, 2015.
Therefore, upon submission of all required documentation, we are registered under the new system by filling in Stationary Pollution Source Registration Form. 15 Regulations on Consumer Rights Protection Our business is subject to a variety of consumer protection laws, including the PRC Consumer Rights and Interests Protection Law, which was amended in 2013 and became effective on March 15, 2014.
Therefore, upon submission of all required documentation, we are registered under the new system by filling in Stationary Pollution Source Registration Form. 17 Regulations on Consumer Rights Protection Our business is subject to a variety of consumer protection laws, including the PRC Consumer Rights and Interests Protection Law, which was amended in 2013 and became effective on March 15, 2014.
The material terms of the sales framework agreements with our top five customers provide: ● The term of each sales framework agreement is four years, which may be renewed by a separate agreement upon expiration. ● The customer shall purchase an annual minimum purchase amount for period from January 1 to December 31 each year as specified in the agreement.
The material terms of the sales framework agreements with our top customers provide: ● The term of each sales framework agreement is four years, which may be renewed by a separate agreement upon expiration. ● The customer shall purchase an annual minimum purchase amount for period from January 1 to December 31 each year as specified in the agreement.
As a high technology company, Sichuan Vtouch Technology Co., Ltd., our subsidiary in Mainland China (“Sichuan Vtouch”) has received certifications from domestic and international institutions, such as ISO9001 Quality Management Systems (QMS) Certification of Registration, ISO 14001 Environmental Management System (EMS) Certification of Registration, and RoHS SGS Certification (Restriction of Hazardous Substance Testing Certification).
As a technology company, Sichuan Vtouch Technology Co., Ltd., our subsidiary in Mainland China (“Sichuan Vtouch”) has received certifications from domestic and international institutions, such as ISO9001 Quality Management Systems (QMS) Certification of Registration, ISO 14001 Environmental Management System (EMS) Certification of Registration, and RoHS SGS Certification (Restriction of Hazardous Substance Testing Certification).
The Offering was conducted pursuant to a Registration Statement on Form S-1, as amended (SEC filed No. 333-270726), which was declared effective on February 14, 2024. In connection with the Offering, our common stock began trading on the Nasdaq Capital Market under the symbol WETH on February 21, 2024.
The 2024 Uplisting Offering was conducted pursuant to a Registration Statement on Form S-1, as amended (SEC filed No. 333-270726), which was declared effective on February 14, 2024. In connection with the 2024 Uplisting Offering, our common stock began trading on the Nasdaq Capital Market under the symbol WETH on February 21, 2024.
The customers shall bear the litigation costs, lawyer’s fees, and other debt recovery costs. ● We are required to provide products to customers pursuant to the delivery date and quantity, requirements included in the purchase orders and shall negotiate with customers if we are unable to so provide. ● The customers are entitled to compensation of losses due to our failure to provide after-sale services. ● Any violation of the terms of the agreements may result in the termination of the agreements and the breaching party shall be responsible for all business and economic losses and legal liabilities arising therefrom. 7 We do not typically enter into sales framework agreements with other customers but sell products to them through purchase orders.
The customers shall bear the litigation costs, lawyer’s fees, and other debt recovery costs. ● We are required to provide products to customers pursuant to the delivery date and quantity, requirements included in the purchase orders and shall negotiate with customers if we are unable to so provide. ● The customers are entitled to compensation of losses due to our failure to provide after-sale services. ● Any violation of the terms of the agreements may result in the termination of the agreements and the breaching party shall be responsible for all business and economic losses and legal liabilities arising therefrom. 9 We do not typically enter into sales framework agreements with other customers but sell products to them through purchase orders.
This circular further provides that an applicant who intends to prove his or her status as the “beneficial owner” must submit the relevant documents to the relevant tax bureau pursuant to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements. 20 Regulations on Employment Laws In accordance with the PRC National Labor Law, which became effective in January 1995 and amended from time to time, and the PRC Labor Contract Law, which became effective in January 2008, as amended subsequently, employers must execute written labor contracts with full-time employees in order to establish an employment relationship.
This circular further provides that an applicant who intends to prove his or her status as the “beneficial owner” must submit the relevant documents to the relevant tax bureau pursuant to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements. 23 Regulations on Employment Laws In accordance with the PRC National Labor Law, which became effective in January 1995 and amended from time to time, and the PRC Labor Contract Law, which became effective in January 2008, as amended subsequently, employers must execute written labor contracts with full-time employees in order to establish an employment relationship.
However, if non-resident enterprises have not formed permanent establishments or premises in Mainland China, or if they have formed permanent establishment or premises in Mainland China but there is no actual relationship between the relevant income derived in Mainland China and the established institutions or premises set up by them, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside Mainland China. 19 Value-Added Tax The PRC Provisional Regulations on Value-Added Tax were promulgated by the State Council on December 13, 1993, which became effective on January 1, 1994 and were subsequently amended from time to time.
However, if non-resident enterprises have not formed permanent establishments or premises in Mainland China, or if they have formed permanent establishment or premises in Mainland China but there is no actual relationship between the relevant income derived in Mainland China and the established institutions or premises set up by them, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside Mainland China. 22 Value-Added Tax The PRC Provisional Regulations on Value-Added Tax were promulgated by the State Council on December 13, 1993, which became effective on January 1, 1994 and were subsequently amended from time to time.
The Offering closed on February 23, 2024 and generated gross proceeds of $10.8 million. We paid a total of approximately $0.8 million in underwriting discounts and commissions, and approximately $0.8 million for other costs and expenses related to the Offering.
The 2024 Uplisting Offering closed on February 23, 2024 and generated gross proceeds of $10.8 million. We paid a total of approximately $0.8 million in underwriting discounts and commissions, and approximately $0.8 million for other costs and expenses related to the 2024 Uplisting Offering.
As of the date of this Annual Report, Sichuan Vtouch has one registered trademark in Mainland China and five pending patent applications. 11 Trademarks Set forth below is a detailed description of our current trademark: Country Trademark Application Date Registration Number Registration Date Classes Assignment Application Number Owner Status China WeTouch 09/28/2011 10019079 01/28/2013 9 20210000091399 Sichuan Vtouch Registered Patents Sichuan Vtouch has applied for five patents with the Patent Office of China National Intellectual Property Administration.
As of the date of this Annual Report, Sichuan Vtouch has one registered trademark in Mainland China and five pending patent applications. 13 Trademarks Set forth below is a detailed description of our current trademark: Country Trademark Application Date Registration Number Registration Date Classes Assignment Application Number Owner Status China WeTouch 09/28/2011 10019079 01/28/2013 9 20210000091399 Sichuan Vtouch Registered Patents Sichuan Vtouch has applied for five patents with the Patent Office of China National Intellectual Property Administration.
With its headquarters based in Keelung, Taiwan and a subsidiary located in Milwaukee, Wisconsin, it designs and manufactures advanced high-performance touch products for industrial and medical applications.
With its headquarters in Keelung, Taiwan and a subsidiary located in Milwaukee, Wisconsin, it designs and manufactures advanced high-performance touch products for industrial and medical applications.
Industrial HMI systems and equipment often require touchscreen functions. These touchscreens must be resistant to interference, stable and have good touch sensitivity. Our products fully meet these requirements, being temperature variation resistant, dustproof and waterproof. 5 Gaming Machines The new generation of gambling machines are commonly adopting a touchscreen function.
Industrial HMI systems and equipment often require touchscreen functions. These touchscreens must be resistant to interference, stable and have good touch sensitivity. Our products fully meet these requirements, being temperature variation resistant, dustproof and waterproof. 7 Gaming Machines The new generation of gambling machines are commonly adopting a touchscreen function.
For the year ended December 31, 2023, we had approximately $9.8 million in revenues generated from the sales of automotive touchscreens, accounting for 24.6% of our total revenues, with industrial HMI touchscreens accounting for 19.9%, POS touchscreens for 16.7%, gaming touchscreens accounting for 14.2%, medical touchscreens for 14.6%, and multi-functional printer touchscreens for 10.1%, of our total revenues.
For the year ended December 31, 2023, we had approximately $9.8 million in revenues generated from the sales of automotive touchscreens, accounting for 24.6% of our total revenues, with industrial HMI touchscreens accounting for 19.9%, POS touchscreens for 16.7%, gaming touchscreens accounting for 14.1%, medical touchscreens for 14.6%, and multi-functional printer touchscreens for 10.1%, respectively, of our total revenues.
We sell our touchscreen products both domestically in China and internationally, covering major areas in Mainland China, including but not limited to the eastern, southern, northern and southwest regions of Mainland China, Taiwan, South Korea, and Germany. We believe that we have established a strong and diversified client base.
We sell our touchscreen products both domestically in China and internationally, covering major areas in Mainland China, including but not limited to the eastern, southern, northern and southwest regions of Mainland China, Taiwan, South Korea, Germany and other countries. We believe that we have established a strong and diversified client base.
We target these overseas customers mainly via our online marketing efforts. In order to market our products, occupy more market share and secure more quality customers, we frequently participate in, and promote our products at, specific touchscreen technology exhibitions held internationally. Our products are produced to order and are marketed directly by our own sales personnel.
We target these overseas customers mainly via our online marketing efforts. In order to market our products, increase our market share, and secure more quality customers, we frequently participate in, and promote our products at, specific touchscreen technology exhibitions held internationally. Our products are produced to order and are marketed directly by our own sales personnel.
Sales and Marketing We source our customers through multiple channels: (i) from our own research through Search Engine Optimization (“SEO”) and outreach, (ii) through referrals from our present customers, (iii) through our websites, which provide product information for sale, as well as telephone and email contact information; and (iv) through industry exhibitions/expos.
Sales and Marketing We source our customers through multiple channels: (i) our own research through Search Engine Optimization (“SEO”) and outreach, (ii) referrals from our existing customers, (iii) our websites, which provide product information for sale, as well as telephone and email contact information; and (iv) industry exhibitions/expos.
We do not consider any of our suppliers to be material to our business and we can utilize any supplier we determine at our sole discretion. Although we can utilize any supplier we determine, we believe that we have established healthy and stable relationships with our significant suppliers. We purchase our raw materials through various suppliers.
We do not consider any of our suppliers to be material to our business, and we can utilize any supplier we choose at our sole discretion. Although we can utilize any supplier, we believe that we have established healthy and stable relationships with our significant suppliers. We purchase our raw materials through various suppliers.
Their management guidelines along with key company quality policies are set out below: The Company has strict production standards in place that govern what constitutes acceptable quality for its products. This ensures that the Company’s products fulfill product certification standards.
Their management guidelines along with key company quality policies are set out below: The Company has strict production standards in place that govern what constitutes acceptable quality for its products. This ensures that the Company’s products meet product certification standards.
This type of touch screen has the advantage of being able to be easily manufactured, with relatively low cost. However, products of this type in large sizes will require a greater degree of signal penetration and long distance transmission technology which will be more technically challenging to achieve. Medium and high end GPS/car entertainment, finance, POS and lottery machines.
This type of touchscreen has the advantage of being able to be easily manufactured, with relatively low cost. However, products of this type in large sizes will require a greater degree of signal penetration and long distance transmission technology which will be more technically challenging to achieve. Medium and high end GPS/car entertainment, finance, POS and lottery machines.
For the years ended December 31, 2023 and 2022, we did not provide any extended payment terms to any of our customers. Our customers are required to make full payment within three to six months from the delivery date.
For the years ended December 31, 2024 and 2023, we did not provide any extended payment terms to any of our customers. Our customers are required to make full payment within three to six months from the delivery date.
The net proceeds of the offering (after deducting legal and accounting fees and expenses) shall be used by the Company for working capital and general corporate purposes and the repayment of debt. The issuance of the shares in the private placement was exempted from registration pursuant to Section 4(a)(2) and/or Regulation S as promulgated by the U.S.
The net proceeds of the offering (after deducting legal and accounting fees and expenses) were used by the Company for working capital and general corporate purposes and the repayment of debt. The issuance of the shares in the private placement was exempted from registration pursuant to Section 4(a)(2) and/or Regulation S as promulgated by the U.S.
According to the relevant provisions of the Trial Administrative Measures and its supporting guidelines, the Company is required to fulfill the filing procedures with the CSRC within three days of the closing of the Offering.
According to the relevant provisions of the Trial Administrative Measures and its supporting guidelines, the Company is required to fulfill the filing procedures with the CSRC within three days of the closing of the 2024 Uplisting Offering.
All products must pass the following inspections: ● Cosmetic inspection: conducted under optimum temperatures (20-22 degrees Celsius) and white fluorescent lighting. The product is observed by the naked eye to spot for any defects, scratches and cracks, panel discoloration, opacity, foreign fibers and spots.
All products must pass the following inspections: ● Cosmetic inspection: conducted under optimum temperatures (20-22 degrees Celsius) and white fluorescent lighting. The product is observed by the naked eye to detect any defects, scratches and cracks, panel discoloration, opacity, foreign fibers and spots.
We believe that we maintain a good working relationship with our employees and to date, we have not experienced any significant labor disputes. 21
We believe that we maintain a good working relationship with our employees and to date, we have not experienced any significant labor disputes. 24
Accordingly, the ease of use offered by touchscreen-based systems makes the systems well suited both for applications for the general public and for specialized applications for institutional users and trained computer users. Although touchscreen has become mainstream only over the last decade, the concept of a touch-sensitive computer display was developed as early as 1965.
Accordingly, the ease of use offered by touchscreen-based systems makes them well suited for both applications for the general public and for specialized applications for institutional users and trained computer users. Although touchscreens have become mainstream only over the last decade, the concept of a touch-sensitive computer display was developed as early as 1965.
Compared with us, although it has a longer history and geographical advantages when it comes to the competition for U.S. customers and other international customers, it recently started the production of capacitive touchscreens mostly applicable to POS and inquiry machines, while our products are more widely used in a variety of industries. ● AbonTouch System Inc, established in 2005, mainly focuses on manufacturing and sales of mid to large size (7”~86”) “Projective Capacitive Sensors,” (7”~21.5”) “Five-Wire Resistive Zero-Bezel Touch Panels” and (5”~21.5”) “Five-Wire Resistive Touch Panels.” Compared with us, although it has a longer history and geographical advantages, it mainly focuses on resistive touch panels and recently started production of capacitive touchscreens mostly applicable to POS, inquiry machines and industrial HMI, while our products are more widely used in a variety of industries.
Compared with us, although it has a longer history and geographical advantages in competing for U.S. customers and other international customers, it recently started the production of capacitive touchscreens primarily for POS and inquiry machines, while our products are more widely used in a variety of industries. ● AbonTouch System Inc, established in 2005, mainly focuses on manufacturing and sales of mid to large size (7“~86”) “Projective Capacitive Sensors,” (7“~21.5”) “Five-Wire Resistive Zero-Bezel Touch Panels” and (5“~21.5”) “Five-Wire Resistive Touch Panels.” Compared with us, although it has a longer history and geographical advantages, it mainly focuses on resistive touch panels and recently started production of capacitive touchscreens primarily for POS, inquiry machines and industrial HMI, while our products are more widely used in a variety of industries.
Compared with us, although it has a longer history and geographical advantages, it mainly focuses on resistive touch panels and recently started production of capacitive touchscreens mostly applicable to the industrial HMI and medical industries, while our products are more widely used in a variety of industries. ● Elo Touch Systems Inc., based and headquartered in the United States, has a history of over 40 years in the production of touchscreens.
Compared with us, although it has a longer history and geographical advantages, it mainly focuses on resistive touch panels and recently started production of capacitive touchscreens primarily for the industrial HMI and medical industries, while our products are more widely used in a variety of industries. ● Elo Touch Systems Inc., based and headquartered in the United States, has a history of over 40 years in the production of touchscreens.
The Company believes that it competes favorably with respect to these factors, although there can be no assurance that the Company will be able to continue to compete successfully in the future. 12 Despite that touchscreen products are highly competitive as a whole, we face fewer competitors, as we produce medium to large size touchscreens which are specially tailored to certain industries, such as industrial HMI, gaming, financing, lottery, automotive, medical, and POS, among others, and require more stable supply and longer guaranty and life span, compared with small size touchscreens, which are characterized by shorter life cycles and guaranty but more demand in quantity.
The Company believes that it competes favorably with respect to these factors, although there can be no assurance that the Company will be able to continue to compete successfully in the future. 14 Despite touchscreen products being highly competitive as a whole, we face fewer competitors, because we produce medium- to large-sized touchscreens specially tailored to certain industries, such as industrial HMI, gaming, financial services, lottery, automotive, medical, and POS, among others, and that require more stable supply and longer guaranty and life span, compared with small size touchscreens, which are characterized by shorter life cycles and guaranty but more demand in quantity.
The production team adheres to the following criteria when making its product standard assessment: Item Industry Standards Our Standards Reaction time Less than or equal to 5 milliseconds Less than or equal to 5 milliseconds Surface hardness 6H 7H~9H Operational temperature 0~70 degrees Celsius -30~80 degrees Celsius EsD requirement 6~12KV 8~15KV Transparency 86% 88% Touch conditions Normal touch and ordinary conditions Waterproof and anti-saline solution and anti-corrosion and Anti interference 10 The products are inspected before they are delivered to our customers.
The production team adheres to the following criteria when assessing product standards: Item Industry Standards Our Standards Reaction time Less than or equal to 5 milliseconds Less than or equal to 5 milliseconds Surface hardness 6H 7H~9H Operational temperature 0~70 degrees Celsius -30~80 degrees Celsius EsD requirement 6~12KV 8~15KV Transparency 86% 88% Touch conditions Normal touch and ordinary conditions Waterproof and anti-saline solution and anti-corrosion and Anti interference 12 The products are inspected before they are delivered to our customers.
In order to maintain product safety and a high standard of product quality, the Company implements a strict set of quality control policies and inspection protocols. These policies and protocols are enforced by the Company’s senior management and officers along every step of the production to post-production process.
In order to maintain product safety and a high standard of product quality, the Company implements a strict set of quality control policies and inspection protocols. These policies and protocols are enforced by the Company’s senior management and officers through every stage of the production to post-production process.
We can utilize any supplier we determine and there are no minimum purchase requirements when we place orders with our suppliers. We place purchase orders with suppliers of raw materials for the production of our products.
We can utilize any supplier we choose, and there are no minimum purchase requirements for orders. We place purchase orders with suppliers of raw materials for the production of our products.
Viewed today as the most important tool to facilitate interaction between the individual and machine, touchscreen technology is now an integral part of a wide range of computing products.
Viewed today as the most important tool to facilitate interaction between individuals and machines, touchscreen technology is now an integral part of a wide range of computing products.
Sichuan Vtouch is obligated to provide 1) products per the specific requirements of the orders, and 2) unconditional defect warranty for our products. Any violation of the order terms may result in termination of the orders or replacement of our products.
Sichuan Vtouch is obligated to provide 1) products per the specific requirements of the orders, and 2) unconditional defect warranty for our products generally for a term of one year. Any violation of the order terms may result in termination of the orders or replacement of our products.
The Company has in place quantitative standards with respect to each of these areas to determine the level of cosmetic acceptability. ● Function tests: all products undergo functionality testing.
The Company maintains quantitative standards with respect to each of these areas to determine the level of cosmetic acceptability. ● Function tests: all products undergo functionality testing.
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 Public Offering On February 20, 2024, we entered into an underwriting agreement with WestPark Capital, Inc. and Craft Capital Management LLC, as representatives (the “Public Offering Representatives”) of the underwriters listed in the underwriting agreement (the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters in a firm commitment underwritten public offering (the “Offering”) up to an aggregate of 2,484,000 shares of our common stock, par value $0.001 per share, at a public offering price of $5.00 per share.
All share information included in this annual report has been retroactively adjusted as if the reverse stock split had occurred as of the earliest period presented. 4 2024 Uplisting Offering On February 20, 2024, we entered into an underwriting agreement with WestPark Capital, Inc. and Craft Capital Management LLC, as representatives (the “2024 Uplisting Offering Representatives”) of the underwriters listed in the underwriting agreement (the “Underwriters”), pursuant to which we agreed to sell to the Underwriters in a firm commitment underwritten public offering (the “2024 Uplisting Offering”) of an aggregate of 2,160,000 shares of our common stock, par value $0.001 per share, at a public offering price of $5.00 per share.
Our main target markets are economically developed countries and regions, including eastern, southern, northern and southwest regions of Mainland China, South Korea, and Germany. We believe that we have established a strong client base, including global well-known institutional customers. Overseas sales were approximately $12.1 million in 2023 as compared to $11.5 million in 2022.
Our main target markets are economically developed countries and regions, including Eastern, Southern, Northern and Southwest Mainland China, Taiwan, South Korea, and Germany. We believe that we have established a strong client base, including globally well-known institutional customers. Overseas sales were approximately $14.9 million in 2024 as compared to $12.1 million in 2023.
Regulations on Foreign Exchange General Administration of Foreign Exchange Under the PRC Foreign Currency Administration Rules promulgated on January 29, 1996 and most recently amended on August 5, 2008 and various regulations issued by the SAFE, and other relevant PRC government authorities, Renminbi is convertible into other currencies for current account items, such as trade-related receipts and payments and payment of interest and dividends.
As of the date of this Annual Report, we had five pending patent applications. 18 Regulations on Foreign Exchange General Administration of Foreign Exchange Under the PRC Foreign Currency Administration Rules promulgated on January 29, 1996 and most recently amended on August 5, 2008 and various regulations issued by the SAFE, and other relevant PRC government authorities, Renminbi is convertible into other currencies for current account items, such as trade-related receipts and payments and payment of interest and dividends.
On July 19, 2016, Hong Kong Wetouch acquired all the shares of Sichuan Wetouch Technology Co., Ltd, a PRC company established in Meishan, Sichuan on May 6, 2011 (“Sichuan Wetouch”). As a result of the acquisition, Sichuan Wetouch became a wholly owned subsidiary of Hong Kong Wetouch.
Hong Kong Wetouch was incorporated on May 5, 2016 and, on July 19, 2016, acquired all the shares of Sichuan Wetouch Technology Co., Ltd., a PRC company established on May 6, 2011 (“Sichuan Wetouch”). As a result, Sichuan Wetouch became a wholly owned subsidiary of Hong Kong Wetouch.
Immediately following the acquisition of HK Wetouch, BVI Wetouch owned (i) all the outstanding shares of Hong Kong Wetouch, which, in turn, owned all the outstanding shares of Sichuan Wetouch and (ii) all of the outstanding shares of HK Wetouch, which owned all the shares of Sichuan Vtouch. 2 On March 2, 2021, HK Wetouch acquired all shares of Hong Kong Wetouch.
Immediately following the acquisition of HK Wetouch, BVI Wetouch owned (i) all the outstanding shares of Hong Kong Wetouch, which, in turn, owned all the outstanding shares of Sichuan Wetouch and (ii) all of the outstanding shares of HK Wetouch, which owned all the shares of Sichuan Vtouch.
Pursuant to SAFE Circular 13, investors should register with banks for direct domestic investment and direct overseas investment. 16 The Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, which was promulgated on March 30, 2015, became effective on June 1, 2015, and was amended on December 30, 2019, provides that an FIE may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the relevant foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the bank has registered the injection of the monetary capital contribution into the account).
The Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, which was promulgated on March 30, 2015, became effective on June 1, 2015, and was amended on December 30, 2019, provides that an FIE may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the relevant foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the bank has registered the injection of the monetary capital contribution into the account).
Sichuan Vtouch originally received the Pollutant Discharge Permit from Renshou County environmental protection agency, which expired on May 15, 2019. Pursuant to a Statement on Change of Pollutant Discharge Permit to Stationary Pollution Source Registration Form dated September 1, 2020, the environmental protection system in Renshou County, Sichuan, was changed from permission to registration due to local administrative division change.
Pursuant to a Statement on Change of Pollutant Discharge Permit to Stationary Pollution Source Registration Form dated September 1, 2020, the environmental protection system in Renshou County, Sichuan, was changed from permission to registration due to local administrative division change.
On March 11, 2019, 85,715 shares of common stock of the Company were issued to the Custodian in consideration for the payment of cash and the issuance of a promissory note by the Custodian to the Company. Effective as of June 11, 2019, the court discharged the Custodian’s duties.
On March 11, 2019, 85,715 shares of common stock of the Company were issued to the Custodian in consideration for the payment of cash and the issuance of a promissory note by the Custodian to the Company.
Sichuan Vtouch is registered under the new system by the issuance of the Stationary Pollution Source Registration Form as of the date of this Annual Report .
Sichuan Vtouch is currently registered under the new system and holds the Stationary Pollution Source Registration Form as of the date of this Annual Report.
The Company is not aware of any investigations, prosecutions, disputes, claims or other proceedings in respect of environmental protection, nor has the Company been punished or can foresee any punishment to be made by any environmental administration authorities of the PRC. Competition The markets for touchscreen products are highly competitive and subject to rapid technological change.
The Company is not aware of any investigations, prosecutions, disputes, claims or other proceedings relating to environmental protection, nor has the Company been punished or foresees any punishment from any environmental administration authorities of the PRC. Competition The markets for touchscreen products are highly competitive and subject to rapid technological change.
According to the Trial Administrative Measures, the Company has submitted the filing materials to the CSRC, but the materials were not complete due to lack of a commitment letter from the Company’s lead underwriter for the Offering, and the Company withdrew the filing from the CSRC. The Company will submit the filing materials again when the materials are ready.
According to the Trial Administrative Measures, the Company has submitted the filing materials to the CSRC, but the materials were not complete due to lack of a commitment letter from the Company’s lead underwriter for the 2024 Uplisting Offering, and the Company withdrew the filing from the CSRC.
On June 18, 2021, Hong Kong Wetouch submitted its application for dissolution and was dissolved on March 18, 2022. In addition, as of March 31, 2021, Sichuan Wetouch’s business and operations have been assumed by Sichuan Vtouch. On March 30, 2023, an independent third party acquired all the shares of Sichuan Wetouch for a nominal amount.
On March 2, 2021, HK Wetouch acquired all shares of Hong Kong Wetouch. Hong Kong Wetouch was dissolved on March 18, 2022. In addition, as of March 31, 2021, Sichuan Wetouch’s business and operations were assumed by Sichuan Vtouch. On March 30, 2023, an independent third party acquired all the shares of Sichuan Wetouch for a nominal amount.
On June 18, 2020, we consummated the transactions contemplated by a Stock Purchase Agreement among the Company, the Custodian, Qixun Technology (Samoa) Limited (“Qixun Samoa”) and Qihong Technology (Samoa) Limited (“Qihong Samoa”, Qixun Samoa and Qixun Samoa are referred to as the “Buyers”).
Effective as of June 11, 2019, the court discharged the Custodian’s duties. 1 On June 18, 2020, we consummated the transactions contemplated by a Stock Purchase Agreement among the Company, the Custodian, Qixun Technology (Samoa) Limited (“Qixun Samoa”) and Qihong Technology (Samoa) Limited (“Qihong Samoa”, Qixun Samoa and Qixun Samoa are referred to as the “Buyers”).
As of December 31, 2022, product types GFF and GG constitute our main stream products, accounting for approximately an average of 38.5% and 52.68%, respectively, of our total revenues, with product types GF and PG and other raw materials accounting for 2.55%, 4.4% and 1.87%, respectively, of our total revenues. 4 Applications of the Company’s Products Our products are used and applied in the production of a variety of products in a wide range of industries.
As of December 31, 2023, product types GFF and GG constitute our main stream products, accounting for approximately an average of 41.8% and 51.7%, respectively, of our total revenues, with product types GF and PG and other raw materials accounting for 2.0%, 2.4% and 2.1%, respectively, of our total revenues. 6 Applications of the Company’s Products Our products are used and applied in the production of a variety of products in a wide range of industries.
Except under certain specific circumstances provided by law, any third-party user must obtain consent or a proper license from the patent owner to use the patent. Otherwise, the use constitutes an infringement of the patent rights. As of the date of this Annual Report, we had five pending patent applications.
Except under certain specific circumstances provided by law, any third-party user must obtain consent or a proper license from the patent owner to use the patent. Otherwise, the use constitutes an infringement of the patent rights.
We generate revenues through sales of our various touchscreen products. For the year ended December 31, 2023 and 2022, we recognized approximately $39.7 million and $37.9 million, respectively, in revenues.
We generate revenues through sales of our various touchscreen products. For the years ended December 31, 2024 and 2023, we recognized approximately $42.3 million and $39.7 million, respectively, in revenues.
On January 26, 2017, SAFE promulgated the Notice of State Administration of Foreign Exchange on Improving the Check of Authenticity and Compliance to further Promote Foreign Exchange Control, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including: (i) banks should check board resolutions regarding profit distribution, the original version of tax filing records, and audited financial statements pursuant to the principle of genuine transactions; and (ii) domestic entities should hold income to account for previous years’ losses before remitting the profits.
This circular also provides an integrated standard for conversion of foreign exchange under capital account items (including, but not limited to, foreign currency capital and foreign debts) on a self-discretionary basis, which applies to all enterprises registered in Mainland China. 19 On January 26, 2017, SAFE promulgated the Notice of State Administration of Foreign Exchange on Improving the Check of Authenticity and Compliance to further Promote Foreign Exchange Control, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including: (i) banks should check board resolutions regarding profit distribution, the original version of tax filing records, and audited financial statements pursuant to the principle of genuine transactions; and (ii) domestic entities should hold income to account for previous years’ losses before remitting the profits.
For the year ended December 31, 2022, the revenues generated from our domestic customers amounted to approximately $26.4 million, constituting approximately 69.7% of our total revenues, with overseas customers accounting for approximately $11.5 million, constituting approximately 30.3% of our total revenues, respectively. Our Suppliers Sichuan Vtouch does not typically enter into supply agreements with our suppliers.
For the year ended December 31, 2023, the revenue generated from our domestic customers accounted for approximately 69.7% of our total revenues, with overseas customers accounting for approximately 30.3% of our total revenues. Our Suppliers Sichuan Vtouch does not typically enter into supply agreements with suppliers.
Recent Developments Private Placement On January 19, 2023, we entered into a securities purchase agreement with certain investors, pursuant to which we sold to such investors an aggregate of 160,000,000 shares of the common stock of the Company for an aggregate purchase price of $40,000,000, or $0.25 per share.
Corporate Structure The diagram below sets forth our corporate structure as of the date of this Annual Report. 3 Private Placement On January 19, 2023, we entered into a securities purchase agreement with certain investors, pursuant to which we sold an aggregate of 160,000,000 shares of common stock of the Company for an aggregate purchase price of $40,000,000, or $0.25 per share.
For the year ended December 31, 2022, we had approximately $9.3 million in revenues generated from the sales of automotive touchscreens, accounting for 24.5% of our total revenues, with industrial HMI touchscreens accounting for 21.1%, POS touchscreens for 6.6%, gaming touchscreens accounting for 5.2%, multi-functional printer touchscreens for 3.8%, of our total revenues.
For the year ended December 31, 2024, we had approximately $11.5 million in revenues generated from the sales of automotive touchscreens, accounting for 27.2% of our total revenues, with industrial HMI touchscreens accounting for 19.4%, gaming touchscreens for 15.3%, medical touchscreens for 14.9%, POS touchscreens for 14.8%, and multi-functional printer touchscreens for 8.4%, respectively, of our total revenues.
Industrial HMI As of December 31, 2023, product types GFF and GG constitute our main stream products, accounting for approximately an average of 41.8% and 51.7%, respectively, of our total revenues, with product types GF and PG and other raw materials accounting for 2.0%, 2.4% and 2.1%, respectively, of our total revenues.
Industrial HMI As of December 31, 2024, product types GFF and GG constitute our main stream products, accounting for approximately an average of 38.5% and 52.7%, respectively, of our total revenues, with product types GF and PG accounting for 2.6%, 4.4% and 1.9%%, respectively, of our total revenues.
Payment terms are also defined per order. Additionally, all products must meet nationally or industry-prescribed quality standards, with each order requiring a supplier’s quality certification.
Additionally, all products must meet nationally or industry-mandated quality standards, with each order requiring a supplier’s quality certification.
For the year ended December 31, 2023 and 2022, our domestic sales accounted for 69.6% and 69.7%, respectively, of our revenues, and our international sales accounted for 30.4% and 30.3%, respectively, of our revenues.
For the years ended December 31, 2024 and 2023, our domestic sales accounted for approximately 64.7% and 69.7%, respectively, of our revenues, and our international sales accounted for approximately 35.3% and 30.3%, respectively, of our revenues.
Immediately following the closing, David Lazar resigned as the sole officer and director of the Company and Jiaying Cai was appointed as president, secretary and treasurer of the Company and as the sole director. 1 Name Change Effective September 30, 2020, we changed our name from Gulf West Investment Properties, Inc. to Wetouch Technology Inc. by filing an Amended and Restated Articles of Incorporation with the Nevada Secretary of State to give effect to a name change.
Name Change Effective September 30, 2020, we changed our name from Gulf West Investment Properties, Inc. to Wetouch Technology Inc. by filing an Amended and Restated Articles of Incorporation with the Nevada Secretary of State to give effect to a name change.
Our Products We offer medium to large sized projected capacitive touchscreens, which can be categorized as set forth below: Product Type Description Application Product type GG This is a double glass layer product, with a solid clear adhesive (SCA) between a layer of conductive glass and a layer of tempered glass.
For additional details, see the Company’s Current Reports on Form 8-K filed May 2, 2025; May 30, 2025; June 26, 2025; June 30, 2025; and July 15, 2025. 5 Our Products We offer medium- to large-sized projected capacitive touchscreens, which can be categorized as set forth below: Product Type Description Application Product type GG This is a double glass layer product, with a solid clear adhesive (SCA) between a layer of conductive glass and a layer of tempered glass.
Patent Name Patent Application Date Patent Type Patent Applicant Status 202120500187.7 Low cost anti-rupture projected capacitive touchscreen 03/09/2021 Utility Model Sichuan Vtouch Pending 202120500188.1 High performance and anti-electromagnetic radiation projected capacitive touchscreen 03/09/2021 Utility Model Sichuan Vtouch Pending 202120500155.7 Full-lamination projected capacitive touchscreen 03/09/2021 Utility Model Sichuan Vtouch Pending 202110256476.1 Anti-scratch glass structure capacitive touchscreen 03/09/2021 Invention Sichuan Vtouch Pending 202111206650.8 An enhanced anti-static projection capacitive screen 10/17/2021 Invention Sichuan Vtouch Pending Patents registered in Mainland China cannot be enforced in other jurisdictions to which the Company supplies its products.
Patent Name Patent Application Date Patent Type Patent Applicant Status 202120500187.7 Low cost anti-rupture projected capacitive touchscreen 03/09/2021 Utility Model Sichuan Vtouch Pending 202120500188.1 High performance and anti-electromagnetic radiation projected capacitive touchscreen 03/09/2021 Utility Model Sichuan Vtouch Pending 202120500155.7 Full-lamination projected capacitive touchscreen 03/09/2021 Utility Model Sichuan Vtouch Pending 202110256476.1 Anti-scratch glass structure capacitive touchscreen 03/09/2021 Invention Sichuan Vtouch Pending 202111206650.8 An enhanced anti-static projection capacitive screen 10/17/2021 Invention Sichuan Vtouch Pending Environmental Matters Our business in Mainland China is subject to various pollution control regulations in Mainland China with respect to noise, water and air pollution and the disposal of waste.
Production and Quality Control The Company has adopted a made-to-order production model as follows: This process is subject to continuous review and monitoring by the management team in consultation with engineers, electricians and other technical experts to ensure that finished products are of the highest quality and meet customer requirements and ISO9001 Quality Management Systems (QMS) standard.
The supplier must unconditionally accept returns and either refund the purchase price in full or provide replacements if the products do not meet the required quality standards, are damaged, or significantly differ from what was ordered. 11 Production and Quality Control The Company has adopted a made-to-order production model as follows: This process is subject to continuous review and monitoring by the management team in consultation with engineers, electricians and other technical experts to ensure that finished products are of the highest quality and meet customer requirements and ISO9001 Quality Management Systems (QMS) standards.
The M&A Rule requires offshore special purpose vehicles formed to pursue overseas listing of equity interests in Mainland China companies and controlled directly or indirectly by Mainland China companies or individuals to obtain the approval of the China Securities Regulatory Commission (“CSRC”) prior to the listing and trading of such special purpose vehicle’s securities on any stock exchange overseas. 18 The M&A Rule further requires that the Ministry of Commerce, or MOFCOM, be notified in advance of any change-of-control transaction in which a foreign investor acquires control of a Mainland China domestic enterprise or a foreign company with substantial Mainland China operations, if certain thresholds under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, issued by the State Council, are triggered.
The M&A Rule further requires that the Ministry of Commerce, or MOFCOM, be notified in advance of any change-of-control transaction in which a foreign investor acquires control of a Mainland China domestic enterprise or a foreign company with substantial Mainland China operations, if certain thresholds under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, issued by the State Council, are triggered.
Reverse Stock Split On February 17, 2023, our board of directors (the “Board”) authorized a reverse stock split of our common stock at 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 as determined by the Chairman of the Board.
Our issued and outstanding shares decreased from 11,887,103 to 169,820, while the authorized common stock was adjusted to 300,000,000 shares and preferred stock to 10,000,000 shares, all with a par value of $0.001 per share. 2023 Reverse Stock Split: On February 17, 2023, our board of directors (the “Board”) authorized a reverse stock split of our common stock at a ratio of not less than one to five (1:5) and not more than one to eighty (1:80), with the exact ratio and the timing of the reverse stock split to be determined by the Chairman of the Board.
The Mainland China residents are also required to amend the registration or filing with the local SAFE branch any material change in the offshore company, such as any change of basic information (including change of such Mainland China residents, name and operation term), increase or decreases in investment amount, transfers or exchanges of shares, or merger or divisions.
At the same time, the SAFE has issued the Operation Guidance for the Issues Concerning Foreign Exchange Administration over Round-Trip Investment regarding the procedures for SAFE registration under SAFE Circular 37, which became effective on July 4, 2014 as an attachment of SAFE Circular 37. 20 The Mainland China residents are also required to amend the registration or filing with the local SAFE branch any material change in the offshore company, such as any change of basic information (including change of such Mainland China residents, name and operation term), increase or decreases in investment amount, transfers or exchanges of shares, or merger or divisions.
As of the date of this Annual Report, the patent applications are still pending. Set forth below is a detailed description of our pending patent applications: Patent Application No.
As of the date of this Annual Report, the five patent applications are still pending. Patents registered in Mainland China cannot be enforced in other jurisdictions to which the Company supplies its products. Set forth below is a detailed description of our pending patent applications: Patent Application No.
HK Wetouch was established to own all the outstanding shares of Sichuan Vtouch Technology Co., Ltd., which was incorporated on December 30, 2020 in Chengdu, Sichuan, under the laws of The People’s Republic of China (“China,” or the “PRC”).
Following the Reverse Merger, Sichuan Wetouch became our indirect wholly owned subsidiary. 2 Acquisition of HK Wetouch Hong Kong Wetouch Technology Limited, a limited company organized under the laws of Hong Kong (“HK Wetouch”), was incorporated on December 3, 2020 to hold all the shares of Sichuan Vtouch Technology Co., Ltd., which was incorporated on December 30, 2020 in Chengdu, Sichuan, under the laws of The People’s Republic of China (“China,” or the “PRC”).
On February 17, 2023, with the approval of the State Council, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Administrative Measures, and five supporting guidelines, which came into effect on March 31, 2023.
Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the NPC requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds be cleared by the MOFCOM before they can be completed. 21 On February 17, 2023, with the approval of the State Council, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Administrative Measures, and five supporting guidelines, which came into effect on March 31, 2023.
Our net proceeds from the Offering, after deducting the underwriting discount, the Underwriters’ fees and expenses, and our Offering expenses, were approximately $9.2 million. We also issued the Representatives’ Warrants (the “Public Offering Representatives’ Warrants”) to the Public Offering Representatives to purchase 43,200 shares of Common Stock at an exercise price equal to 125.0% of the public offering price.
We also issued the Representatives’ Warrants (the “2024 Uplisting Offering Representatives’ Warrants”) to the 2024 Uplisting Offering Representatives to purchase 43,200 shares of common stock at an exercise price equal to 125.0% of the public offering price.
We do not rely on distributors to sell our products. 8 For the year ended December 31, 2023, the revenues generated from our domestic customers amounted to approximately $27.6 million, constituting approximately 69.6% of our total revenues, with overseas customers accounting for approximately $12.1 million, constituting approximately 30.4% of our total revenues, respectively.
We do not rely on distributors to sell our products. 10 For the year ended December 31, 2024, the revenue from our domestic customers accounted for approximately 64.7% of our total revenues, with overseas customers accounting for approximately 35.3%of our total revenues.
The products are tested for their functionality in high and low humidity environments as well as in extreme temperatures. The products are inspected to determine whether damage or physical change is caused by exposure to high and low temperatures. ● Internal teams will conduct independent testing for hazardous substances.
Touchscreen products are connected electronically via standard cabling systems to computers, to measure functionality and identify abnormalities. ● Stress testing: all products undergo stress testing for humidity, temperature, and corrosion resistance The products are tested for functionality in high- and low-humidity environments as well as extreme temperatures to determine whether exposure causes damage or physical change. ● Hazardous substances testing: internal teams conduct independent testing for hazardous substances and for corrosive resistance to saline solutions.
On March 12, 2021, BVI Wetouch, the Company’s wholly owned subsidiary, acquired all the outstanding shares of HK Wetouch from the sole shareholder of HK Wetouch, Guangde Cai, who was our former Chairman and Director in consideration of the payment of HK$10,000 pursuant to the instruments of transfer in accordance with Hong Kong law.
On March 12, 2021, BVI Wetouch, our wholly owned subsidiary, acquired all the shares of HK Wetouch from its sole shareholder, Guangde Cai (our former Chairman and Director). As a result, HK Wetouch became a wholly-owned subsidiary of BVI Wetouch.
As of the date of this Annual Report, we have 11 employees in our R&D department. Intellectual Property Our business is dependent on a combination of trademarks, patents, domain names, trade names, trade secrets and other proprietary rights in order to protect our intellectual property rights.
In the future, we expect R&D expenses to increase as we continue to accelerate the development of new products and functions, and to enhancing and upgrading existing products and functions. Intellectual Property Our business relies on a combination of trademarks, patents, domain names, trade names, trade secrets and other proprietary rights to protect our intellectual property.
As Sichuan Wetouch’s business and operations have been assumed by Sichuan Vtouch, Sichuan Vtouch entered into sales framework agreements, which were entered into by Sichuan Wetouch previously, with our top customers on December 31, 2021.
For the year ended December 31, 2023, each of our top six customers accounted for approximately 22.5%, 16.5%, 15.6%, 14.1%, 11.3% and 10.1% of our total revenues, representing 90.1% in the aggregate. 8 As Sichuan Wetouch’s business and operations have been assumed by Sichuan Vtouch, Sichuan Vtouch entered into sales framework agreements, which were entered into by Sichuan Wetouch previously with our top customers on December 31, 2021.
Raw material purchases from one and four suppliers, each of which individually exceeded 10% of the Company’s total raw material purchases, accounted for approximately 13.3% and 47.2% of the Company’s total raw material purchases for the year ended December 31, 2023 and 2022, respectively. 9 The general terms of the purchase order include specifications for product name, quantity, price, order amount, and delivery date, as well as delivery methods, packaging, inspection procedures, breach terms, and dispute resolution, all tailored to each order.
The general terms of the purchase order include specifications for product name, quantity, price, order amount, and delivery date, as well as delivery methods, packaging, inspection procedures, breach terms, and dispute resolution, all tailored to each order. Payment terms are also specified in each order.
The products are also tested for their corrosive resistance to saline solutions. Seasonality There is no significant seasonality in our business. Research and Development We are committed to our own research and development projects as well as partnership initiatives in order to continuously and systematically upgrade our touchscreen technology.
Seasonality There is no significant seasonality in our business. Research and Development (“R&D”) We are committed to both internal R&D projects and collaborative initiatives to continuously upgrade our touchscreen technology.
Ltd., (4) MultimediaLink Inc., and (5) Suzhou Weinview Co., Ltd., accounted for approximately 22.5%, 16.5%, 15.7%, 14.1% and 11.3%, respectively, of our total revenues. 6 For the year ended December 31, 2022, our top six customers, namely (1) Siemens Industrial Automation Products (Chengdu) Co., Ltd., (2) Shanghai Sigang Electronics Co., Ltd., (3) E-Lead Electronic Co.
For the year ended December 31, 2024, each of our top five customers accounted for approximately 22.0%, 19.1%, 15.3%, 14.5% and 11.5%of our total revenues, representing 82.4% in the aggregate.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Our Business and Industry ● Weaknesses identified in our financial reporting during audits could impair our ability to accurately report financial results. ● Dependency on major customers presents risks if we cannot retain or attract new customers effectively. ● Our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates. ● Failure to secure new land for facilities could severely impact our operations and financial health. ● We are subject to risks related to construction of our factory in Sichuan Province, China. ● The COVID-19 pandemic and other crises could disrupt operations and negatively affect our business, financial condition, and results. ● Economic recessions could have a significant adverse impact on our business. ● Intellectual property infringement claims could be costly and disrupt business operations. ● A significant amount of accounts receivable could become uncollectible, affecting financial stability. ● Cyclical industry dynamics could lead to harmful price fluctuations. ● Failure to maintain product quality and safety could damage our reputation and financial standing. ● Intense competition in the touchscreen display industry could reduce market share and profitability. ● Inadequate financing could restrict our ability to execute our business plan. ● Adjustments in related party transaction pricing could lead to significant tax liabilities. ● Revocation of tax treatments or government subsidies could necessitate paying additional taxes. ● Interruptions from third-party suppliers could disrupt operations. ● Fluctuations in the cost and availability of raw materials could negatively affect results. ● Dependency on key executives and the lack of long-term supplier contracts pose risks. ● Failure to adopt new technologies might affect competitiveness. ● Liability claims or adverse publicity could impact customer confidence and business results. ● Losses on inventories and lack of business insurance could expose us to significant costs.
Biggest changeRisks Related to Our Business and Industry ● Weaknesses identified in our financial reporting during audits could impair our ability to accurately report financial results. ● Dependency on major customers presents risks if we cannot retain or attract new customers effectively. ● Our operating history may not be indicative of our future growth or financial results and we may not be able to sustain our historical growth rates. ● Failure to secure the certificate of land use right for a new parcel from the local PRC government could severely impact our operations and financial health. ● We are subject to risks related to construction of our factory in Sichuan Province, China. ● Economic recessions could have a significant adverse impact on our business. ● Intellectual property infringement claims could be costly and disrupt business operations. ● A significant amount of accounts receivable could become uncollectible, affecting financial stability. ● Cyclical industry dynamics could lead to harmful price fluctuations. ● Failure to maintain product quality and safety could damage our reputation and financial standing. ● Intense competition in the touchscreen display industry could reduce market share and profitability. ● Inadequate financing could restrict our ability to execute our business plan. ● Adjustments in related party transaction pricing could lead to significant tax liabilities. ● Revocation of tax treatments or government subsidies could necessitate paying additional taxes. ● Interruptions from third-party suppliers could disrupt operations. ● Fluctuations in the cost and availability of raw materials could negatively affect results. ● Dependency on key executives and the lack of long-term supplier contracts pose risks. ● Failure to adopt new technologies might affect competitiveness. ● Liability claims or adverse publicity could impact customer confidence and business results. ● Losses on inventories and lack of business insurance could expose us to significant costs. 25 Risks Related to Doing Business in China ● Regulatory changes in China could increase compliance costs and complicate capital raising. ● The HFCAA could lead to delisting of our common stock if audits are not inspected properly. ● We may be subject to substantial fine if the CSRC has determined that we have failed to comply with the post-offering filing obligations. ● Changes in U.S.-China trade policies could adversely impact our business operations. ● PRC regulation of loans and currency conversion could delay or prevent capital usage, affecting liquidity. ● Labor laws in the PRC might negatively impact our operational flexibility and financial results. ● Liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law could lead to penalties. ● Bankruptcy or liquidation of our PRC subsidiary could significantly disrupt operations. ● Economic and policy changes in China could limit our ability to offer securities. ● Uncertainties in the PRC legal system could limit legal protections. ● Difficulties in enforcing foreign judgments in China could undermine contractual protections. ● Government control of currency conversion and fluctuations in exchange rates could impact financial results and investments. ● The Chinese government’s substantial influence over business operations could lead to significant operational changes.
However, given that the Trial Administrative Measures were recently promulgated, there remain substantial uncertainties as to their interpretation, application, and enforcement and there is no guarantee that the relevant PRC government agencies, including the CSRC, would reach the same conclusion that we and our PRC counsel have reached.
However, given that the Trial Administrative Measures were recently promulgated, there remain substantial uncertainties as to their interpretation, application, and enforcement and there is no guarantee that the relevant PRC government agencies, including the CSRC, would reach the same conclusion that we and our PRC counsel have reached.
These uncertainties may impede our ability to enforce the contracts we have entered into and could materially and adversely affect our business and results of operations. 38 The PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have retroactive effect.
These uncertainties may impede our ability to enforce the contracts we have entered into and could materially and adversely affect our business and results of operations. The PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have retroactive effect.
We face less competition as we produce medium to large size capacitive touchscreens which are specially tailored to certain industries, such as industrial HMI, gaming, financing, lottery, automotive, medical, and POS, and requires more stable supply, longer guaranty and life span, compared with small size touchscreens which are characteristic with shorter life cycle and guaranty but more demand in quantity.
We face less competition as we produce medium- to large-sized capacitive touchscreens which are specially tailored to certain industries, such as industrial HMI, gaming, financing, lottery, automotive, medical, and POS, and requires more stable supply, longer guaranty and life span, compared with small size touchscreens which are characteristic with shorter life cycle and guaranty but more demand in quantity.
Further, the application and interpretation of China’s patent laws and the procedures and standards for granting patents in China are still evolving and are uncertain, and we cannot assure you that PRC courts or regulatory authorities would agree with our analysis. 26 We have a significant amount of accounts receivable, which could become uncollectible .
Further, the application and interpretation of China’s patent laws and the procedures and standards for granting patents in China are still evolving and are uncertain, and we cannot assure you that PRC courts or regulatory authorities would agree with our analysis. We have a significant amount of accounts receivable, which could become uncollectible .
In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. 37 The PRC government has significant authority to exert influence on the ability of a China-based company, such as us, to conduct its business, accept foreign investments or list on an U.S. or other foreign exchanges.
In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government has significant authority to exert influence on the ability of a China-based company, such as us, to conduct its business, accept foreign investments or list on an U.S. or other foreign exchanges.
We may be required to change our data and other business practices and be subject to regulatory investigations, penalties, and increased cost of operations as a result of these laws and policies. 32 On July 30, 2021, in response to the recent regulatory developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement asking the SEC staff to seek additional disclosures from offshore issuers associated with China-based operating companies before their registration statements will be declared effective, including whether the China-based operating company and the issuer, when applicable, received or were denied permission from Chinese authorities to list on U.S. exchanges and the risks that such approval could be denied or rescinded.
We may be required to change our data and other business practices and be subject to regulatory investigations, penalties, and increased cost of operations as a result of these laws and policies. 36 On July 30, 2021, in response to the recent regulatory developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement asking the SEC staff to seek additional disclosures from offshore issuers associated with China-based operating companies before their registration statements will be declared effective, including whether the China-based operating company and the issuer, when applicable, received or were denied permission from Chinese authorities to list on U.S. exchanges and the risks that such approval could be denied or rescinded.
It is not clear whether “registration” is a mere formality or involves the kind of substantive review process undertaken by SAFE and its relevant branches in the past. Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.
It is not clear whether “registration” is a mere formality or involves the kind of substantive review process undertaken by SAFE and its relevant branches in the past. 42 Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.
The failure or delay in payment by one or more of our customers could reduce our cash flows and adversely affect our liquidity and results of operations. Our industry is cyclical, with recurring periods of capacity increases. As a result, price fluctuations in response to supply and demand imbalances could harm our results of operations.
The failure or delay in payment by one or more of our customers could reduce our cash flows and adversely affect our liquidity and results of operations. 30 Our industry is cyclical, with recurring periods of capacity increases. As a result, price fluctuations in response to supply and demand imbalances could harm our results of operations.
You may not realize a return on your investment in our common stock and you may even lose your entire investment in our common stock. If relations between the United States and China worsen, our stock price may decrease and could lead to our loss of access or increased difficulty in accessing U.S. capital markets.
You may not realize a return on your investment in our common stock and you may even lose your entire investment in our common stock. 49 If relations between the United States and China worsen, our stock price may decrease and could lead to our loss of access or increased difficulty in accessing U.S. capital markets.
This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. As of the date of this Annual Report, the PRC residents have either not completed, or have not applied for, foreign exchange registration under the SAFE Circular 37 and other related rules.
This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. 41 As of the date of this Annual Report, the PRC residents have either not completed, or have not applied for, foreign exchange registration under the SAFE Circular 37 and other related rules.
Any failure to complete the construction plan on schedule and within budget could adversely affect our financial condition and results of operations. The construction may be subject to legal claims and proceedings instituted by contractors, workers and other parties involved in such project from time to time.
Any failure to complete the construction plan on schedule and within budget could adversely affect our financial condition and results of operations. 29 The construction may be subject to legal claims and proceedings instituted by contractors, workers and other parties involved in such project from time to time.
We have been have five pending patent applications as of the date of this Annual Report. No assurance can be given that such patents will not be challenged, invalidated, infringed or circumvented, or that such intellectual property rights will provide a competitive advantage to us.
We have five pending patent applications as of the date of this Annual Report. No assurance can be given that such patents will not be challenged, invalidated, infringed or circumvented, or that such intellectual property rights will provide a competitive advantage to us.
Any such litigation, whether successful or unsuccessful, could result in substantial costs to us and diversions of our resources, either of which could adversely affect our business. 31 Risks Related to Doing Business in China Adverse regulatory developments in China may subject us to additional regulatory review and expose us to government restrictions, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies with significant China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements, and/or suspend or terminate our future securities offerings, making capital-raising more difficult.
Any such litigation, whether successful or unsuccessful, could result in substantial costs to us and diversions of our resources, either of which could adversely affect our business. 35 Risks Related to Doing Business in China Adverse regulatory developments in China may subject us to additional regulatory review and expose us to government restrictions, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies with significant China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements, and/or suspend or terminate our future securities offerings, making capital-raising more difficult.
If we are unable to retain our existing customers, especially our top customers or to acquire new customers in a cost-effective manner, our revenues may decrease and our results of operations will be adversely affected.
If we are unable to retain our existing customers, especially our top customers or to acquire new customers in a cost-effective manner, our revenues may decrease and our results of operations may be adversely affected.
If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our Common Stock. 40 The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stock .
If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our Common Stock. 45 The Chinese government exerts substantial influence over the manner in which we must conduct our business activities and may intervene or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stock .
Such a delisting would substantially impair your ability to sell or purchase our common stock when you wish to do so, and would have a negative impact on the price of our shares. 34 We may be subject to substantial fine if the CSRC has determined that we have failed to comply with the post-offering filing obligations imposed by the Trial Administrative Measure.
Such a delisting would substantially impair your ability to sell or purchase our common stock when you wish to do so, and would have a negative impact on the price of our shares. 38 We may be subject to substantial fine if the CSRC has determined that we have failed to comply with the post-offering filing obligations imposed by the Trial Administrative Measure.
The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay in foreign currencies, and our business and operations may be adversely affected. 39 Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.
The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay in foreign currencies, and our business and operations may be adversely affected. 44 Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.
Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders (including the common stock holders) and any gain realized on the transfer of the common stock or ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us).
Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders (including the common stockholders) and any gain realized on the transfer of the common stock or ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us).
If the CSRC has determined that we have failed to comply with the post-offering filing obligations imposed by the Trial Administrative Measures or make a misrepresentation, misleading statement or material omission in the materials we submit to the CSRC, the CSRC would have the right to order rectification, issue a warning and impose a fine on us of between RMB 1 million and RMB 10 million and issuing a warning to the parties responsible for such failure, misrepresentation or material omission and impose a fine on each of such individuals ranging from RMB 500,000 to RMB 5 million. 33 Our common stock will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, if it is later determined that the PCAOB is unable to inspect and investigate completely our auditor.
If the CSRC has determined that we have failed to comply with the post-offering filing obligations imposed by the Trial Administrative Measures or make a misrepresentation, misleading statement or material omission in the materials we submit to the CSRC, the CSRC would have the right to order rectification, issue a warning and impose a fine on us of between RMB 1 million and RMB 10 million and issuing a warning to the parties responsible for such failure, misrepresentation or material omission and impose a fine on each of such individuals ranging from RMB 500,000 to RMB 5 million. 37 Our common stock will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, as amended, if it is later determined that the PCAOB is unable to inspect and investigate completely our auditor.
Although we believe our tax provisions are reasonable, if the PRC tax authorities successfully challenge our position and we are required to pay tax, interest, and penalties in excess of our tax provisions, our financial condition and results of operations would be materially and adversely affected. 28 A significant interruption in the operations of our third-party suppliers could potentially disrupt our operations.
Although we believe our tax provisions are reasonable, if the PRC tax authorities successfully challenge our position and we are required to pay tax, interest, and penalties in excess of our tax provisions, our financial condition and results of operations would be materially and adversely affected. 32 A significant interruption in the operations of our third-party suppliers could potentially disrupt our operations.
Such reductions or terminations could have a material adverse impact on our revenues, profits and financial condition. 29 If we fail to adopt new technologies to evolving customer needs or emerging industry standards, our business may be materially and adversely affected.
Such reductions or terminations could have a material adverse impact on our revenues, profits and financial condition. 33 If we fail to adopt new technologies to evolving customer needs or emerging industry standards, our business may be materially and adversely affected.
Any such tax may reduce the returns on your investment in our common stock. 41 Risks Related to Our Common Stock The price of our common stock may be volatile or may decline regardless of our operating performance and you may not be able to resell your shares at or above the purchase price.
Any such tax may reduce the returns on your investment in our common stock. 46 Risks Related to Our Common Stock The price of our common stock may be volatile or may decline regardless of our operating performance and you may not be able to resell your shares at or above the purchase price.
In addition, if our existing customers, especially our existing top customers no longer find our products appealing, or if our competitors offer more attractive products, prices, discounts or better customer services, our existing customers may lose interest in us, decrease their orders or even stop ordering from us.
In addition, if our existing customers, especially our top customers no longer find our products appealing, or if our competitors offer more attractive products, prices, discounts or better customer service, our existing customers may lose interest in us, decrease their orders or even stop ordering from us.
Although cross-border business may not be an area of our focus, if we plan to sell our products internationally in the future, any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our products and services, impact the competitive position of our products or prevent us from being able to sell products in certain countries.
Although cross-border business is currently not an area of our focus, if we plan to sell products internationally in the future, any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our products and services, impact the competitive position of our products or prevent us from being able to sell products in certain countries.
Any uninsured risks may result in substantial costs and the diversion of resources, which could adversely affect our results of operations and financial condition. 30 We may incur liabilities that are not covered by insurance.
Any uninsured risks may result in substantial costs and the diversion of resources, which could adversely affect our results of operations and financial condition. 34 We may incur liabilities that are not covered by insurance.
Our PRC counsel has advised that because our common stock currently trades in the U.S., we were not required to submit filings to the CSRC before the Offering was completed and the Offering was not conditioned on CSRC approval.
Our PRC counsel has advised that because our common stock currently trades in the U.S., we were not required to submit filings to the CSRC before our 2024 Uplisting Offering was completed and the 2024 Uplisting Offering was not conditioned on CSRC approval.
We have submitted the filing materials to the CSRC, but the materials were not complete due to lack of a commitment letter from the lead underwriter for the Offering, and we withdrew the filing from the CSRC. We will submit the filing materials again when the materials are ready.
We have submitted the filing materials to the CSRC, but the materials were not complete due to lack of a commitment letter from the lead underwriter for the 2024 Uplisting Offering, and we withdrew the filing from the CSRC. We will submit the filing materials again when the materials are ready.
According to the relevant provisions of the Trial Administrative Measures and its supporting guidelines, the Company is required to fulfill the filing procedures with the CSRC within three days of the closing of the Offering.
According to the relevant provisions of the Trial Administrative Measures and its supporting guidelines, the Company is required to fulfill the filing procedures with the CSRC within three days of the closing of the 2024 Uplisting Offering.
We are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”) and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business.
Foreign Corrupt Practices Act (the “FCPA”) and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business.
As of December 31, 2023, we had approximately $7.5 million in accounts receivable. Our accounts receivable primarily include balance due from customers when our products are sold and delivered to customers. Our customers are required to make full payment within three to five months from delivery date, although our industry typical payment term is 180 days from delivery.
As of December 31, 2024, we had approximately $7.5 million in accounts receivable. Our accounts receivable primarily include balance due from customers when our products are sold and delivered to customers. Our customers are required to make full payment within three to six months from delivery date, although our industry typical payment term is 180 days from delivery.
For the years ended December 31, 2023 and 2022, we did not provide any extended payment terms to any of our customers.
For the years ended December 31, 2024 and 2023, we did not provide any extended payment terms to any of our customers.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: ● overall performance of the equity markets; ● our operating performance and the performance of other similar companies; ● the published opinions and third-party valuations by banking and market analysts; ● changes in our projected operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock; ● regulatory or legal developments; ● the level of expenses related to operations; ● our failure to achieve its goals in the timeframe it announces; ● announcements of acquisitions, strategic alliances or significant agreements by us; ● recruitment or departure of key personnel; ● the economy as a whole and market conditions in our industry; ● trading activity by a number of stockholders; ● the size of our market float; ● political uncertainty and/or instability ● the ongoing and future impact of the COVID-19 pandemic and actions taken to slow its spread; and ● any other factors discussed in this Annual Report.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: ● overall performance of the equity markets; ● our operating performance and the performance of other similar companies; ● the published opinions and third-party valuations by banking and market analysts; ● changes in our projected operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock; ● regulatory or legal developments; ● the level of expenses related to operations; ● our failure to achieve its goals in the timeframe it announces; ● announcements of acquisitions, strategic alliances or significant agreements by us; ● recruitment or departure of key personnel; ● the economy as a whole and market conditions in our industry; ● trading activity by a number of stockholders; ● the size of our market float; ● political uncertainty and/or instability; and ● any other factors discussed in this Annual Report.
As of the date of this Annual Report, we estimate to finish the building construction by the end of 2024 and commence production in the third quarter of 2025, but there is no assurance and we may need extended time to achieve our business plan.
As of the date of this Annual Report, we estimate to finish the building construction by the end of 2025 and commence production in the first quarter of 2026, but there is no assurance and we may need extended time to achieve our business plan.
Due to the withdrawal of the land use right to the Property and cancellation of our ownership certificates pertaining to the buildings on the Property by the local government pursuant to the Guidelines and the Compensation Agreement, on July 23, 2021, Sichuan Vtouch entered into a contract with the Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right for a parcel of land spanning 131,010 square feet, for a consideration of RMB3,925,233 (equivalent to $537,998) for the Company’s new facility.
Due to the withdrawal of the land use right to the Property and cancellation of our ownership certificates pertaining to the buildings on the Property by the local government pursuant to the Guidelines and the Compensation Agreement, on August 6, 2021, Sichuan Vtouch entered into a contract with the Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right for a parcel of land spanning 131,010 square feet, for a consideration of approximately RMB3,925,233 (equivalent to $537,755) for the Company’s new facility.
We plan to finish the building construction by the end of 2024 and commence production in the third quarter of 2025. The construction could experience delays or other difficulties, and will require significant capital. We may not generate sufficient cash flow to satisfy our capital expenditure commitments.
We plan to complete the building construction by the end of 2025 and commence production in the first quarter of 2026. The construction could experience delays or other difficulties, and will require significant capital. We may not generate sufficient cash flow to satisfy our capital expenditure commitments.
On July 23, 2021, Sichuan Vtouch entered into a contract with the Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right for a parcel of land spanning 131,010 square feet, for a consideration of RMB3,925,233 (equivalent to $537,998) for the Company’s new facility.
On August 6, 2021, Sichuan Vtouch entered into a contract with the Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right for a parcel of land spanning 131,010 square feet, for a consideration of approximately RMB3,925,233 (equivalent to $537,755) for the Company’s new facility.
Rather, within three days of the closing of the Offering, we are required to submit filings to the CSRC in accordance with the Trial Administrative Measures.
However, within three days of the closing of the 2024 Uplisting Offering, we are required to submit filings to the CSRC in accordance with the Trial Administrative Measures.
However, such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC; (iii) a negative list of types of issuers banned from listing overseas, such as issuers under investigation for bribery and corruption; (iv) regulation of issuers in specific industries; (v) issuers’ compliance with national security measures and the personal data protection laws; and (vi) certain other matters such as: an issuer must file with the CSRC within three business days after it submits an application for initial public offering to competent overseas regulators; and subsequent reports shall be filed with the CSRC on material events, including change of control or voluntary or forced delisting of the issuer(s) who have completed overseas offerings and listings.
However, such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC; (iii) a negative list of types of issuers banned from listing overseas, such as issuers under investigation for bribery and corruption; (iv) regulation of issuers in specific industries; (v) issuers’ compliance with national security measures and the personal data protection laws; and (vi) certain other matters such as: an issuer must file with the CSRC within three business days after it submits an application for initial public offering to competent overseas regulators; and subsequent reports shall be filed with the CSRC on material events, including change of control or voluntary or forced delisting of the issuer(s) who have completed overseas offerings and listings.Our PRC counsel has advised that because our common stock currently trades in the U.S., we were not required to submit filings to the CSRC before the Offering was completed and the Offering was not conditioned on CSRC approval.
We are subject to risks related to construction of our factory in Sichuan Province, China. We are constructing new facilities and office buildings, located in Sichuan Province, China. As of the date of this Annual Report, we estimates receiving the certificate of land use right from the local government in the fourth quarter of 2024.
We are subject to risks related to construction of our factory in Sichuan Province, China. We are constructing new facilities and office buildings on the new parcel located in Sichuan Province, China. As of the date of this Annual Report, we estimate receiving the certificate of land use right from the local government in the first quarter of 2026.
Although we have accumulated some and continuously growing our customer base, there is no assurance that we will be able to continue to do so in the future against current or future competitors, and such competitive pressures may have a material adverse effect on our business, financial condition and results of operations.
Although we have accumulated some and continuously growing our customer base, there is no assurance that we will be able to continue to do so in the future against current or future competitors, and such competitive pressures may have a material adverse effect on our business, financial condition and results of operations. 31 If we do not obtain substantial additional financing, our ability to execute our business plan may be impaired.
Risks Related to Our Common Stock ● Volatility in the price of our common stock may not reflect our operating performance. ● By-laws limiting the judicial forum for disputes could restrict stockholder litigation options. ● Manipulative short selling could drive down our stock price. ● Direct exposure to negative publicity involving U.S.-listed Chinese companies could harm our business and reputation. ● Large volumes of our common stock being sold could negatively affect the market price. ● Non-payment of dividends means stockholders must rely on stock price appreciation for returns. ● Deteriorating U.S.-China relations could lower our stock price and complicate access to capital markets. 22 Risks Related to Our Business and Industry The COVID-19 pandemic, as well as other epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our delivery and operations, which could materially and adversely affect our business, financial condition, and results of operations .
Risks Related to Our Common Stock ● Volatility in the price of our common stock may not reflect our operating performance. ● By-laws limiting the judicial forum for disputes could restrict stockholder litigation options. ● Manipulative short selling could drive down our stock price. ● Direct exposure to negative publicity involving U.S.-listed Chinese companies could harm our business and reputation. ● Large volumes of our common stock being sold could negatively affect the market price. ● Non-payment of dividends means stockholders must rely on stock price appreciation for returns. ● Deteriorating U.S.-China relations could lower our stock price and complicate access to capital markets. ● We may be subject to delisting from Nasdaq if we fail to timely file periodic reports with the SEC or to maintain Nasdaq’s minimum bid price, which could materially and adversely affect the liquidity and value of our common stock. 26 Risks Related to Our Business and Industry COVID-19 as well as other epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our delivery and operations, which could materially and adversely affect our business, financial condition, and results of operations .
If Sichuan Vtouch’s application for the qualification of preferential tax rate benefit is not approved, our PRC subsidiary will be subject to the statutory enterprise income tax rate of 25%.
If Sichuan Vtouch later applies but its application for the qualification of preferential tax rate benefit is not approved, our PRC subsidiary will still be subject to the statutory enterprise income tax rate of 25%.
Our operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business. Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results.
Our operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business. Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact our business and operating results. There have recently been significant changes to international trade policies and tariffs affecting imports and exports.
In light of the recent regulatory and policy developments in China and government actions taken by the PRC government, including possible imposition of restrictions and/or approval requirements on China-based companies raising capital offshore, the offering of our securities may be subject to additional disclosure requirements and review that the SEC or other regulatory authorities in the United States may adopt for companies with China-based operations.
In light of the recent regulatory and policy developments in China and government actions taken by the PRC government, including possible imposition of restrictions and/or approval requirements on China-based companies raising capital offshore, the offering of our securities may be subject to additional disclosure requirements and review that the SEC or other regulatory authorities in the United States may adopt for companies with China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements, and/or suspend or terminate our future securities offerings, making capital-raising more difficult.
In the event that we decide to significantly change or decrease our workforce, the Labor Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our business or in a timely and cost-effective manner, thus materially and adversely affecting our financial condition and results of operations. 36 We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.
In the event that we decide to significantly change or decrease our workforce, the Labor Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our business or in a timely and cost-effective manner, thus materially and adversely affecting our financial condition and results of operations.
Our auditor, the independent registered public accounting firm that issues the audit report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States, pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
Our auditor, the independent registered public accounting firm that issues the audit report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States.
As of the date of this Annual Report, we estimate to finish the building construction by the end of 2024 and commence production in the third quarter of 2025, but there is no assurance and we may need extended time to achieve our business plan.
As of the date of this Annual Report, we estimate to complete the building construction by the end of 2025 and commence production in the first quarter of 2026, assuming we have obtained the land use right by then, but there is no assurance and we may need extended time to achieve our business plan.
The PCAOB is continuing to demand complete access, and it will act immediately to reconsider such determinations should China obstruct, or otherwise fail to facilitate the PCAOB’s access, at any time.
The PCAOB is continuing to demand complete access, and it will act immediately to reconsider such determinations should China obstruct, or otherwise fail to facilitate the PCAOB’s access, at any time. Our auditor, ST & Partners PLT (“STP”), is headquartered in Malayia, subject to PCAOB inspection.
Any person or entity purchasing or otherwise acquiring any interest in our Company shall be deemed to have notice of and consented to these provisions. 42 These exclusive-forum provisions may limit a shareholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees.
These exclusive-forum provisions may limit a shareholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees.
As defined in the rules and regulations adopted by the SEC, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
As defined in the rules and regulations adopted by the SEC, a “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. 27 Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively.
If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business, financial condition, results of operations.
If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated, such changes could have an adverse effect on our business, financial condition, or results of operations.
Therefore, you should not rely on an investment in our common stock as a source for any future dividend income.
As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our common stock as a source for any future dividend income.
We also expect to continue to invest significantly to acquire new customers and retain existing ones, especially our top customers. There can be no assurance that new customers will stay with us, or the net revenues from new customers we acquire will ultimately exceed the cost of acquiring those customers.
There can be no assurance that new customers will stay with us, or that the net revenues from new customers we acquire will ultimately exceed the cost of acquiring those customers.
Our ability to attract new customers and retain existing customers cost-effectively, especially our top customers, is crucial to driving net revenues growth and achieving profitability. We have invested significantly in branding, sales and marketing to acquire and retain customers since our inception. For example, we attend domestic and international expos and exhibitions to market our products and attract new customers.
We have invested significantly in branding, sales and marketing to acquire and retain customers since our inception. For example, we attend domestic and international expos and exhibitions to market our products and attract new customers. We also expect to continue to invest significantly to acquire new customers and retain existing ones, especially our top customers.
As we have dissolved Sichuan Wetouch, and its business and operations have been assumed by Sichuan Vtouch, Sichuan Vtouch has reapplied for the preferential rate of 15% as a qualified enterprise. Such application is currently pending with the PRC tax authorities.
As we have dissolved Sichuan Wetouch, and its business and operations have been assumed by Sichuan Vtouch, Sichuan Vtouch is planning to apply for the preferential rate of 15% as a qualified enterprise with the PRC tax authorities. As of the date of this Annual Report, we have not applied for the preferential rate of 15%.
We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future.
Because we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment. We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business.
Further, it could cause our investors to lose confidence in the information we report, which could adversely affect the price of our shares. We are heavily dependent on our top customers. If we fail to acquire new customers or retain existing customers in a cost-effective manner, our business, financial condition and results of operations may be materially and adversely affected.
If we fail to acquire new customers or retain existing customers in a cost-effective manner, our business, financial condition and results of operations may be materially and adversely affected. We are heavily dependent on our top customers, each of which accounted for 10% or more of our revenues.
If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business, operations and reputations, which could result in a loss of your investment in our common stock.
No assurances can be made that we will not become a target of such commentary and declines in the market price of our common stock will not occur in the future, in connection with such commentary by short sellers or otherwise. 48 If we become directly subject to the scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business, operations and reputations, which could result in a loss of your investment in our common stock.
We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our common stock. 43 Because we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of our common stock for return on your investment.
We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our common stock.
Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in our Company shall be deemed to have notice of and consented to these provisions.
Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. 24 However, the implementation of these measures may not fully address these weaknesses in our internal control over financial reporting, and we cannot conclude that they have been fully remedied.
Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. We are heavily dependent on our top customers.
Since the PRC legal system continues to evolve rapidly, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties, which may limit legal protections available to us.
In addition, any new or changes in PRC laws and regulations related to foreign investment in China could affect the business environment and our ability to operate our business in China. 43 Since the PRC legal system continues to evolve rapidly, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties, which may limit legal protections available to us.
Since our By-laws provide that the courts in the State of Nevada are the sole and exclusive forum for substantially all disputes between us and our shareholders, this could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors or officers, or employees.
In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations. 47 Since our By-laws provide that the courts in the State of Nevada are the sole and exclusive forum for substantially all disputes between us and our shareholders, this could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors or officers, or employees.
In addition, we may be unable to receive sufficient compensation from suppliers and service providers for the losses caused by them. 27 We face intense competition in the touchscreen display industry in general.
In addition, we may be unable to receive sufficient compensation from suppliers and service providers for the losses caused by them. We face intense competition in the touchscreen display industry in general. If we fail to compete effectively, we may lose market share and customers, and our business, financial condition and results of operations may be materially and adversely affected.
Failure to secure a new parcel of land for the construction of our new buildings and facilities, and failure to acquire and install new production lines on the new parcel may materially and adversely affect our business, financial condition and results of operations.
If our growth rates decline, investors’ perceptions of our business and prospects may be adversely affected and the market price of our common stock could decline. 28 Failure to secure the certificate of land use right for a new parcel from the local PRC government for the construction of our new buildings and facilities, and failure to acquire and install new production lines on the new parcel may materially and adversely affect our business, financial condition and results of operations.
The remediation actions planned include: ● Continue to search for and evaluate qualified independent outside directors; ● Identify gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company; and ● Continue to develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures.
The remediation actions planned include: ● Identify gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company; and ● Continue to cooperate with operation teams to ensure control environment in place, and monitor the effectiveness of operations on existing controls and procedures. ● Establish assessment of Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”) compliance requirements and improvement of overall internal control.
PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us. 35 In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37.
In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37.
We have also engaged with a third-party financial consulting firm during the year to assist with the preparation of SEC reporting. We are committed to maintaining a strong internal control environment, and believe that these remediation efforts will deliver improvements in our control environment.
We are committed to maintaining a strong internal control environment, and believe that these remediation efforts will deliver improvements in our control environment.
The Company paid the consideration in full on November 18, 2021. The Company estimates receiving the certificate of land use right from the local government in the fourth quarter of 2024.
The Company paid the consideration in full on November 18, 2021. We are in the process of obtaining the certificate of land use right for the new parcel and expect to receive the certificate from the local government in the first quarter of 2026.
The Company paid the consideration in full on November 18, 2021. The Company estimates receiving the certificate of land use right from the local government in the fourth quarter of 2024.
The Company paid the consideration in full on November 18, 2021. We are in the process of obtaining the certificate of land use right for the new parcel and expect to receive the certificate from the local government in the first quarter of 2026.
In connection with the auditing of our consolidated financial statements as of and for the years ended December 31, 2023 and 2022, we identified the following material weaknesses in our internal control over financial reporting: ● Inadequate segregation of duties consistent with control objectives; ● Lack of formal policies and procedures; ● Lack of risk assessment procedures on internal controls to detect financial reporting risks on a timely manner.
In connection with the auditing of our consolidated financial statements as of and for the years ended December 31, 2024 and 2023, we identified the following material weaknesses in our internal control over financial reporting: ● Lack of competent financial reporting and accounting personnel with appropriate understanding of U.S.
If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from the Offering and to capitalize or otherwise fund our Chinese operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from any future offerings and to capitalize or otherwise fund our Chinese operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business. 40 PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.
On December 29, 2022, the Consolidated Appropriations Act, 2023 was signed into law, which contained, among other things, an identical provision to the AHFCAA, and reduced the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two.
On December 29, 2022, the Consolidated Appropriations Act, 2023, was signed into law, which amended the HFCAA (i) to reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two, and (ii) so that any foreign jurisdiction could be the reason why the PCAOB does not have complete access to inspect or investigate a company’s auditor.
Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.
Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future.
We are heavily dependent on our top customers, each of which accounted for 10% or more of our revenues. We currently sell our products primarily to customers in the PRC and to a lesser extent, overseas customers in European countries and East Asia such as South Korea and Taiwan.
We currently sell our products primarily to customers in the PRC and to a lesser extent, to overseas customers in Europe and East Asia, including South Korea and Taiwan. For the year ended December 31, 2024, our top five customers accounted for approximately 22.0%, 19.1%, 15.3%, 14.5% and 11.5%, respectively, of our total revenues.
Any of the foregoing events may give rise to interruptions, damage to our property, delays in production, breakdowns, system failures, technology platform failures, or internet failures, which could cause the loss or corruption of data or malfunctions of our manufacturing facility as well as adversely affect our business, financial condition, and results of operations. 23 In connection with the audits of our consolidated financial statements as of and for the years ended December 31, 2022 and 2023, we identified certain material weaknesses in our internal control over financial reporting.
In connection with the audits of our consolidated financial statements as of and for the years ended December 31, 2024 and 2023, we identified certain material weaknesses in our internal control over financial reporting.
Any one or more of these events may impede our production and delivery efforts and adversely affect our sales results, or even for a prolonged period of time, which could materially and adversely affect our business, financial condition, and results of operations. We are also vulnerable to natural disasters and other calamities.
Any of these events may cause interruptions, damage to property, production delays, or loss of data, which could materially and adversely impact our business, financial condition, and results of operations.
In addition, global pandemics, epidemics in Mainland China or elsewhere in the world, or fear of spread of contagious diseases, such as Ebola virus disease (EVD), Middle East respiratory syndrome (MERS), severe acute respiratory syndrome (SARS), H1N1 flu, H7N9 flu, and avian flu, as well as hurricanes, earthquakes, tsunamis, or other natural disasters could also disrupt our business operations, reduce or restrict our supply of products and services, incur significant costs to protect our employees and facilities, or result in regional or global economic distress, which may materially and adversely affect our business, financial condition, and results of operations.
Epidemics in Mainland China or elsewhere in the world, or the fear of such outbreaks, may disrupt our supply chain, reduce or restrict our ability to deliver products and services, increase costs to protect employees and facilities, or result in regional or global economic distress.
Among other requirements, if a domestic enterprise intends to indirectly offer and list securities in an overseas market, the record-filing obligation shall be completed within three working days after the overseas listing application is submitted. On February 17, 2023, the CSRC promulgated the Trial Administrative Measures, which took effect on March 31, 2023.
On February 17, 2023, the CSRC promulgated the Trial Administrative Measures, which took effect on March 31, 2023. The Trial Administrative Measures further stipulate the rules and requirements for overseas offering and listing conducted by PRC domestic companies.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed8 unchanged
Biggest changeFurther, there are increasing regulation requirements regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm. 44 Governance Following these risk assessments, we evaluate whether and how to re-design, implement, and maintain reasonable safeguards to mitigate identified risks and reasonably address any identified gaps in existing safeguards.
Biggest changeGovernance Following these risk assessments, we evaluate whether and how to re-design, implement, and maintain reasonable safeguards to mitigate identified risks and reasonably address any identified gaps in existing safeguards. Our IT leadership reports to our Chief Executive Officer (CEO) periodically and on an as-needed basis to manage our risk assessment and mitigation process.
We have not encountered cybersecurity risks, threats or incidents that have materially affected or are reasonably likely to materially affect the Company, our business strategy, results of operations, or financial condition during the financial year ended December 31, 2023.
We have not encountered cybersecurity risks, threats or incidents that have materially affected or are reasonably likely to materially affect the Company, our business strategy, results of operations, or financial condition during the financial year ended December 31, 2024. 51
Our IT leadership reports to our Chief Executive Officer (CEO) periodically and on an as-needed basis to manage our risk assessment and mitigation process. We monitor and test our safeguards and regularly conduct training for our employees on these safeguards, in collaboration with human resources, IT, and management. We are committed to promoting a company-wide culture of cybersecurity risk management.
We monitor and test our safeguards and regularly conduct training for our employees on these safeguards, in collaboration with human resources, IT, and management. We are committed to promoting a company-wide culture of cybersecurity risk management.
In some instances, we, our suppliers, our customers, and the users of our products and services can be unaware of a threat or incident or its magnitude and effects.
In some instances, we, our suppliers, our customers, and the users of our products and services can be unaware of a threat or incident or its magnitude and effects. Further, there are increasing regulation requirements regarding responses to cybersecurity incidents, including reporting to regulators, which could subject us to additional liability and reputational harm.

Item 2. Properties

Properties — owned and leased real estate

8 edited+10 added−0 removed6 unchanged
Biggest changeNew Facilities On July 23, 2021, Sichuan Vtouch entered into a contract with the Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right for a parcel of land spanning 131,010 square feet, for a consideration of RMB3,925,233 (equivalent to $537,998) for the Company’s new facility.
Biggest changeOn August 9, 2024, in order to incorporate the new facility construction schedule, the lease was renewed and extended till October 31, 2025, with a monthly rent of RMB 400,000 ($54,800). 53 New Facilities On August 6, 2021, Sichuan Vtouch entered into a contract with the Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right for a parcel of land spanning 131,010 square feet, for a consideration of approximately RMB3,925,233 (equivalent to $537,755) for the Company’s new facility.
On July 27, 2021, Sichuan Vtouch and Sichuan Chunqiu Development and Construction Group Co., Ltd. entered into a construction contract for a project to build the capacitive touch screen and touch machine research and development production base.
On July 27, 2021, Sichuan Vtouch and Sichuan Chunqiu Development and Construction Group Co., Ltd. entered into a construction contract for a project to build the capacitive touchscreen and touch machine research and development production base.
On October 16, 2022, Sichuan Vtouch entered an extension to the Leaseback Agreement with Sichuan Renshou to extend the period it granted Sichuan Vtouch to lease back the Properties until October 31, 2024, at a monthly rent of RMB 400,000 ($56,339).
On October 16, 2022, October 30, 2023, Sichuan Vtouch twice entered an extension to the Leaseback Agreement with Sichuan Renshou to extend the period it granted Sichuan Vtouch to lease back the Properties until October 31, 2024, at a monthly rent of RMB 400,000 ($56,339).
Properties and Facilities We operate our business in approximately nine separate buildings covering a total area of approximately 735,745 square feet at No. 29, Third Main Avenue, Shigao Town, Renshou County, Meishan City, Sichuan, China (previously known as 22 Xingan Ave., Section 2, Shigao Town, Sichuan, China ) where we maintain our executive offices, research and development facilities, factories and other facilities.
PROPERTIES AND FACILITIES We operate our business in approximately nine separate leased buildings covering a total area of approximately 40,126.9 square feet at No. 29, Third Main Avenue, Shigao Town, Renshou County, Meishan City, Sichuan, China (previously known as 22 Xingan Ave., Section 2, Shigao Town, Sichuan, China ) where we maintain our executive offices, research and development facilities, factories and other facilities.
We may need additional financing for our new facilities. In addition, we expect that this the construction of buildings and affixtures will be completed by end of 2023 and our production at the new facilities will commence in the third quarter of 2025, but there is no assurance and we may need extended time to achieve our business plan. 45
In addition, we expect that this the construction of buildings and affixtures will be completed by end of 2025 and our production at the new facilities will commence in the second half of 2026, but there is no assurance and we may need extended time to achieve our business plan.
The parties have agreed to extend the term of the contract to December 31, 2024. As of the date of this Annual Report, we estimate that our capital needs for this acquisition and construction will be approximately RMB170.0 million (approximately $26.2 million), but there is no assurance that the estimated amount is sufficient to achieve our goals.
As of the date of this Annual Report, we estimate that our capital needs for this acquisition and construction will be approximately RMB170.0 million (approximately $26.2 million), but there is no assurance that the estimated amount is sufficient to achieve our goals. We may need additional financing for our new facilities.
The contract was estimated to start on August 15, 2021, and to be completed by August 15, 2022, at a provisional price of RMB76,000,000 (approximately $11.9 million). This price is subject to adjustment based on actual completion settlement. However, the construction project has been put on hold due to the outbreak of Covid-19 and government-ordered shutdowns in China.
The project was initially scheduled to commence on August 15, 2021, and reach completion by August 15, 2022, with a provisional contract value of RMB76,000,000 (approximately $11.9 million), subject to adjustment based on the final completion settlement. However, the construction project was subsequently suspended due to the outbreak of Covid-19 and government-ordered shutdowns in China.
The Company paid the consideration in full on November 18, 2021. The Company estimates receiving the certificate of land use right from the local government in the fourth quarter of 2024.
The Company paid the consideration in full on November 18, 2021. We are in the process of obtaining the certificate of land use right for the new parcel and expect to receive the certificate from the local government in the first quarter of 2026.
Added
Our principal physical properties are used in connection with our [manufacturing/administrative/R&D/distribution] operations. We believe that our facilities are generally suitable and adequate for their current and anticipated future uses. The following table summarizes our material properties: Location (City, Country) Segment(s) Using Property General Character of Property (e.g., Office, Manufacturing, Warehouse) Ownership/Lease Status Approx.
Added
Size (sq. ft./sq. m.) Lease Expiration (if leased) Encumbrances (if any) Shigao Town, Renshou County, Meishan City, Sichuan Province, China Touchscreen business Offices building Leased 8,085.0. sq. m 31-Oct-25 None same as above Touchscreen business Experimental building( testing and experimenting of samples and products Leased 1,069.6 sq. m 31-Oct-25 None same as above Touchscreen business Manufacturing/warehouse building No.
Added
Leased 30,879.3 sq. m 31-Oct-25 None same as above Touchscreen business Security gate Leased 92.98 sq.m 31-Oct-25 None As of the date of this Annual Report, we lease approximately 8,085.0 sq.m of office space for R&D, sales and other corporate functions in Shigao Town, Renshou County, Meishan City , Sichuan Province, China, which serves as our corporate headquarter.
Added
The lease expires on October 31, 2025 and we believe it can be renewed on commercially reasonable terms. We also lease 30,879.3 sq.m facility with three manufacturing wards for principal manufacturing operations in Shigao Town, Renshou ,County, Meishan City, Sichuan Province, China, at which production of, assembly, packaging, warehousing of our touchscreen products.
Added
We believe these facilities are adequate to meet our current production requirements and provide room for moderate expansion. In addition, space of 1069.6 sq. m in Shigao Town, Renshou County, Meishan City, Sichuan Province, China was used for testing and experimenting of samples and products by our engineering teams.
Added
None of our properties are subject to material encumbrances that would adversely affect their use. 52 As of the date of this Annual Report, we do not own any real property.
Added
However, we are in the process of obtaining a certificate of land use right for a new parcel located at Tianfu Avenue, Youjiadu Community in Chengdu, Sichuan province, China, and expect to receive the certificate from the local government in the first quarter of 2026.
Added
We believe the above properties are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate any such expansion of our operations.
Added
As a result, the parties have agreed to extend the term of the contract to December 31, 2024. On April 11, 2025, Sichuan Vtouch entered into a supplemental construction contract with Sichuan Chunqiu Development & Construction Group Co.
Added
Ltd. for an additional consideration of RMB 4,633,118 (equivalent to $0.6 million) regarding the completion of the Company’s facility construction project on the capacitive touchscreen and touch machine research and development, which extended the original contract term to December 31, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−48 removed0 unchanged
Biggest changeITEM 3. Legal Proceedings We know of no material, active, pending or threatened proceeding against us or our subsidiaries, nor are we, or any subsidiary, involved as a plaintiff or defendant in any material proceeding or pending litigation. From time to time, we are parties to various legal actions arising in the ordinary course of business.
Biggest changeITEM 3. LEGAL PROCEEDINGS We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, can result in substantial cost and the diversion of our resources, including our management’s time and attention.
Removed
For more information, see Note 13 to the Financial Statements in Item 8 . i) An equity dispute case with Yunqing Su with a disputed amount of RMB1,318,604 (equivalent to $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 RMB1 million (equivalent to $140,847) to purchase 370,370.37 original listed shares of the target company, Sichuan Wetouch, and provided for the exit mechanism in the agreement.
Added
As of the date of this Report, we are not aware of any material, active, pending or threatened to which the Company or any of its subsidiaries is a party, or to which any of their property is subject. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 54 PART II
Removed
However, the target company failed to be listed prior to December 31, 2017 as agreed. On June 22, 2017, Guangde Cai and Yunqing Su entered into a supplementary agreement, pursuant to which Guangde Cai shall repurchase all of Yunqing Su’s equity interest and pay the interest.
Removed
Sichuan Wetouch repaid Yunqing Su the interest of RMB220,000 (equivalent to $30,986) and the principal of RMB128,000 (equivalent to $18,028) in November 2018. The repayment period set forth in the supplementary agreement expired, but Sichuan Wetouch and Guangde Cai failed to pay the principal and interest owed to Yunqing Su.
Removed
Yunqing Su sued Sichuan Wetouch and Guangde Cai in the Renshou County People’s Court of Sichuan Province, and the case was filed on February 9, 2022.
Removed
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 (equivalent to $185,721).
Removed
Sichuan Wetouch fully paid the aforesaid amount on March 15, 2023. ii) Legal case with Chengdu SME Credit Guarantee Co., Ltd. on a court acceptance fee of RMB338,418 (equivalent to $47,665) On July 5, 2013, Sichuan Wetouch obtained a one-year loan of RMB60.0 million (equivalent to $8.5 million) from Bank of Chengdu, at an annual interest rate of 8.61%.
Removed
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.
Removed
On July 31, 2014, Sichuan Wetouch repaid RMB5.0 million (equivalent to $0.7 million). The remaining loan of RMB55.0 million (equivalent to $7.7 million) was twice extended to be due on August 22, 2018. Upon the loan becoming due, but unpaid by the Company, Chengdu SME paid the outstanding balance of RMB55 million (equivalent to $7.7 million) to Bank of Chengdu.
Removed
The Company subsequently repaid RMB55 million (equivalent to $7.7 million) to Chengdu SME; however, Chengdu SME filed two separate lawsuits against the Company to recover loan default penalties from the Company.
Removed
The loan default penalties were (a) RMB5.8 million (equivalent to $0.8 million) related to the 30% of the remaining loan balance repaid by Chengdu SME and (b) RMB6.0 million (equivalent to $0.8 million) related to the 70% of the remaining loan balance repaid by Chengdu SME.
Removed
During the year ended December 31, 2017, the Company recorded loan default penalties, and related liabilities, of $1.7 million. Chengdu SME applied to the Chengdu High-tech Court for enforcement of the above-mentioned loan default penalties of RMB5.8 million (equivalent to $0.8 million) and RMB6.0 million (equivalent to $0.8 million) on December 30, 2018.
Removed
On March 12, 2020, the Enforcement Settlement Agreement issued by the Chengdu High-tech Court confirmed that Sichuan Wetouch still owed RMB5.8 million (equivalent to $0.8 million) and RMB6.0 million (equivalent to $0.8 million) of loan default penalties. The agreement did not specify which party shall pay the court fee.
Removed
On September 16, 2020, Sichuan Wetouch made a full repayment of RMB11.8 million (equivalent to $1.7 million) of the above loan default penalties to Chengdu SME. 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 RMB338,418 (equivalent to $47,665).
Removed
On March 17, 2023, Chengdu Wetouch made a full payment of the above court fee to Chengdu SME. 46 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 RMB250,470 (equivalent to $35,278) On November 20, 2014, Lifan Financial Lease (Shanghai) Co., Ltd.
Removed
(“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 RMB20 million, the rental interest rate of the leased equipment shall be 8% per year, and the lease term shall be 24 months.
Removed
Upon the expiration of the lease term, Lifan Financial shall transfer the leased property to Chengdu Wetouch or a third party designated by Chengdu Wetouch at the price of RMB0 after Chengdu Wetouch has fully fulfilled its obligations, including, without limitation, the payment of the rent, liquidated damages (if any) and other contractual obligations.
Removed
Guangde Cai, Sichuan Wetouch, Meishan Wetouch, an affiliated company to Mr. Guangde Cai and Xinjiang Wetouch Electronic Technology Co., Ltd. (“Xinjiang Wetouch”) provided Lifan Financial with joint and several liability guarantee. 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.
Removed
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 (equivalent to $3.2 million) as well as the difference between the liquidated damages and the value of the leased property recovered; etc.
Removed
The parties executed a settlement agreement on March 7, 2023, in which the parties confirmed that the outstanding payment of RMB 22,905,807 (equivalent to $3.2 million) has been fully paid up on December 23, 2021 and the above cases have been settled.
Removed
As for the court acceptance fees that were not previously agreed upon by the parties, Chengdu Wetouch agreed to pay the court acceptance fee of RMB 250,470 (equivalent to $ 35,278 ).
Removed
Chengdu Wetouch paid the aforesaid fees to Lifan Financial on March 10, 2023. iv) Legal case with Sichuan Renshou Shigao Tianfu Investment Co., Ltd and Renshou Tengyi Landscaping Co., Ltd. on a court acceptance fee of RMB103,232 (equivalent to $14,540) On March 19, 2014, Chengdu Wetouch, a related party, obtained a two and half-year loan of RMB15.0 million (equivalent to $2.1 million) from Chengdu Bank Co., Ltd.
Removed
Gaoxin Branch (“Chengdu Bank Gaoxin Branch”), with Chengdu Hi-tech Investment Group Co., Ltd. (“CDHT Investment”) acting as guarantor to pay off the loan principal and related interests, while Sichuan Wetouch and Hong Kong Wetouch as guarantors, were jointly and severally liable for such debts.
Removed
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.
Removed
(“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. Upon the expiration of the guarantee, Chengdu Wetouch still defaulted on repayment of the above pledge.
Removed
As a result, CDHT Investment levied this collateral of RMB12.0 million. On November 21, 2019. Subsequently, Sichuan Renshou and Renshou Tengyi filed with Chengdu Intermediate People’s Court a lawsuit demanding an asset recovery of RMB12.0 million (equivalent to $1.7 million) pursuant to the counter guarantee agreement.
Removed
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. 47 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.
Removed
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.
Removed
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 RMB103,232 (equivalent to $14,540).
Removed
On March 17, 2023, Chengdu Wetouch made a full payment of the above court fee to Sichuan Renshou. v) Legal case with Chengdu High Investment Financing Guarantee Co. on a court acceptance fee of RMB250,000 (equivalent to $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.
Removed
On May 21, 2020, the court rendered a judgment ordering Hong Kong Wetouch to pay compensation of RMB17,467,042 (equivalent to $2,460,181), interest, liquidated damages, liquidated damages for late performance, etc.
Removed
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 RMB17,547,197 (equivalent to $2,471,471) on October 27, 2020 paid by Chengdu Wetouch, and the above case has been settled.
Removed
As for the court acceptance fees that were not previously agreed upon by the parties, Chengdu Wetouch agreed to pay the court acceptance fee of RMB 250,000 (equivalent to $35,211).
Removed
Chengdu Wetouch paid the aforesaid fees to Chengdu High Investment on March 20, 2023. vi) Legal case with Hubei Lai’en Optoelectronics Technology Co., Ltd. on a product payment of RMB157,714 (equivalent to $22,213) Sichuan Wetouch purchased products from Hubei Lai’en Optoelectronics Technology Co., Ltd.
Removed
(“Hubei Lai’en) multiple times from March to June 2019, but failed to pay the corresponding amount of RMB137,142.7 for the purchased products. On April 6, 2022, Hubei Lai’en filed a lawsuit against Sichuan Wetouch in the Renshou County People’s Court of Sichuan Province, requesting payment of overdue payment for the products and liquidated damages.
Removed
On May 31, 2022, the Renshou County People’s Court rendered a judgment that Sichuan Wetouch shall pay Hubei Lai’en the price of goods of RMB137,143 and liquidated damages of RMB 20,571.
Removed
Sichuan Wetouch paid the above amount to Hubei Lai’en on March 15, 2023. vi) Legal case with Chengdu Hongxin Shunda Trading Co., Ltd. on settlement of accounts payable and related fund interests totalling RMB3,021,294 ($425,540) In March 2022, Sichuan Vtouch purchase steel products from Chengdu Hongxin Shunda Trading Co., Ltd.
Removed
(“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 RMB3,021,294 ($425,540).
Removed
The court judged Sichuan Vtouch to pay and ordered the freezing of bank accounts of these three defendants. On September 25, 2023, the Company appealed to Chengdu Municipal Intermediate People’s Court, arguing the calculation of fund interests and penalties ordered by the lower court unfair and not in line with the law regulations.
Removed
As of the Report date of this 10K, the management assessed that possibility and amount of contingency cannot be estimated given the current status. vii) Legal case with Mr. Guangchuang Liu on a refund of equity transfer price and related interests totalling RMB324,501 ($45,705) In July 2022 Mr. Liu entered into an equity transfer agreement with Mr.
Removed
Guangde Cai and Sichuan Vtouch with the intention to subscribe the Company’s shares of 20,000 for RMB315,245 ($44,104). In April, 2023, Mr. Liu filed a lawsuit to Shenzhen Nanshan District People’s Court against Mr. Guangde Cai and Sichuan Vtouch requesting the refund of this equity transfer price and related fund interests totalling RMB324,501 ($45,705).
Removed
Per the court decision of December 13, 2023, the defendants were ordered to make the payments by the end of 2023.
Removed
As of December 31, 2023, the Company recorded the liabilities of RMB324,501 ($45,705) and subsequently, the Company has made the payment in full in January, 2024. 48 viii) Legal case with Sichuan Yali Cement Manufacturing Co., Ltd. and Sichuan Chunqiu Development & Construction Group Co.
Removed
Ltd. on a debt payable of RMB RMB1,656,480 (equivalent to $233,310) and related interest, legal fees and penalties. 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.
Removed
Under this contract, Sichuan Vtouch was listed as the joint responsibility party for the payment settlement between Yali Company and Chunqiu Company.
Removed
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 RMB1,656,480 (equivalent to $233,310) and related interest, legal fees and penalties, and that Sichuan Vtouch should assume the guaranteed liability for the debt payable by Chunqiu Co.
Removed
On August 12, 2023, the court rendered a judgment ordering Chunqiu Co. to pay to Yali Co. for above mentioned amount. Sichuan Vtouch was ordered joint liability of such aforesaid repayment. 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.
Removed
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 RMB10,627 ($1,497) with Chunqiu liability. As of December 31, 2023, Sichuan Vtouch accrued this court fee of RMB10,627 ($1,497). ITEM 4.
Removed
Mine and Safety Disclosure Not applicable. Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed2 unchanged
Biggest changeWe had approximately 417 stockholders of record as of April 15, 2024. On April 15, 2024 there were 11,931,534 shares of our common stock issued and outstanding. Dividend Policy We do not anticipate declaring or paying, in the foreseeable future, any cash dividends on our capital stock.
Biggest changeWe had approximately 448 stockholders of record as of September 5, 2025. On September 5, 2025, there were 11,931,534 shares of our common stock issued and outstanding. Dividend Policy We do not anticipate declaring or paying, in the foreseeable future, any cash dividends on our capital stock.
Securities Authorized for Issuance Under Equity Compensation Plan The Company does not have any equity compensation plans. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Company and Affiliated Purchasers None. 49 ITEM 6. [Reserved]
Securities Authorized for Issuance Under Equity Compensation Plan The Company does not have any equity compensation plans. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Company and Affiliated Purchasers None. ITEM 6. [RESERVED] 55
ITEM 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Trading Market Our common stock is currently traded on the Nasdaq under the symbol “WETH.” Holders of Record On April 15, 2024, the closing price per share of our common stock was $2.01.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Trading Market Our common stock is currently traded on the Nasdaq under the symbol “WETH.” Holders of Record On September 8, 2025, the closing price per share of our common stock was $1.1500.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

61 edited+45 added−76 removed27 unchanged
Biggest changeThe following is a summary of our cash flows provided by (used in) operating, investing, and financing activities for the years ended December 31, 2023 and 2022: Years Ended December 31, (in US Dollar millions) 2023 2022 Net cash provided by operating activities $ 12.7 $ 8.6 Net cash used in investing activities (2.3 ) - Net cash provided by (used in) financing activities 40.0 (0.7 ) Effect of foreign currency exchange rate changes on cash and cash equivalents (3.6 ) (2.8 ) Net increase in cash and cash equivalents 46.8 5.1 Cash and cash equivalents at the beginning of period 51.2 46.2 Cash and cash equivalents at the end of period $ 98.0 $ 51.3 Operating Activities Net cash provided by operating activities was $12.7 million for the year ended December 31, 2023, as compared to $8.6 million used in operating activities for the same period of the last year, a change of $4.1 million, primarily due to (i) an increase of $2.4 million in accrued expenses and other current liabilities, a decrease of $2.8 million in accounts receivable and $0.4 million in inventories, and a decrease of $0.1 million in amortization of discounts and issuance cost of the Notes, partially offset by (ii) a decrease of $0.5 million in net income for the year ended December 31, 2023, (iii) a decrease of $1.3 million in accounts payable, an increase of $0.5 million in prepaid expenses and other current assets, and an increase of $1.0 million in loss on changes in fair value of common stock purchase warrant liability. 55 Investing Activities Net cash used in investing activities for the year ended December 31, 2023 was $2.3 million for the purchase of property, plant and equipment.
Biggest changeThe following is a summary of our cash flows provided by (used in) operating, investing, and financing activities for the years ended December 31 , 2024 and 2023: Years Ended December 31, (in US Dollar millions) 2024 2023 Net cash provided by operating activities $ 1.1 $ 12.7 Net cash used in investing activities (0.3 ) (2.3 ) Net cash provided by financing activities 7.6 40.0 Effect of foreign currency exchange rate changes on cash and cash equivalents (2.7 ) (3.6 ) Net increase in cash and cash equivalents 5.7 46.8 Cash and cash equivalents at the beginning of period 98.0 51.2 Cash and cash equivalents at the end of period $ 103.7 $ 98.0 62 Operating Activities Net cash provided by operating activities was $1.1 million for the year ended December 31, 2024, as compared to $12.7 million provided by operating activities for the same period in 2023, representing a decrease of $11.6 million, or 91.3%.
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.
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 of when an order is placed and when shipment or delivery occurs.
Use of estimates In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“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.
Use of estimates In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and the 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.
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.
Impairment of long-lived Assets Long-lived assets, such as property, plant and equipment, and 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.
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.
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 of are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated.
We are specialized in large-format touchscreens, which are developed and designed for a wide variety of markets and used in by the financial terminals, automotive, POS, gaming, lottery, medical, HMI, and other specialized industries. Our product portfolio comprises medium to large sized projected capacitive touchscreens ranging from 7.0 inch to 42 inch screens.
We are specialized in large-format touchscreens, which are developed and designed for a wide variety of markets and used in the financial terminals, automotive, POS, gaming, lottery, medical, HMI, and other specialized industries. Our product portfolio comprises medium- to large-sized projected capacitive touchscreens ranging from 7.0 inch to 42 inch screens.
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.
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 (loss) as other income or expenses.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. 61 An uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax examination.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax examination.
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.
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 predictable costs to completion and disposal, is lower than its cost, the specific inventory item is written down to its estimated net realizable value.
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.
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 provides hat 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 derivative instruments for purposes of ASC 815-40.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
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.
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, because it has control of the goods and the ability to direct their use to obtain substantially all the benefits.
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.
If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized for the amount that the carrying value exceeds the estimated fair value of the asset or asset group.
Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows: Useful life Buildings 20 years Machinery and equipment 10 years Office and electric equipment 3 years Vehicles 10 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred.
Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows: Useful life Buildings 20 years Machinery and equipment 10 years Vehicles 4 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred.
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.
The amount recognized is the largest amount of tax benefit that is greater than 50% likely to beg realized upon examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.
Net Income As a result of the above factors, we had a net income of $8.3 million in the year ended December 31, 2023 compared to a net income of $8.7 million in the same period of 2022. Liquidity and Capital Resources Historically, our primary uses of cash have been to finance working capital needs.
Net Income As a result of the above factors, we had a net income of $6.0 million in the year ended December 31, 2024 compared to a net income of $8.3 million in the same period of 2023. Liquidity and Capital Resources Historically, our primary uses of cash have been to finance working capital needs.
The Company’s sales are net of value added tax (“VAT”) and business tax and surcharges collected on behalf of tax authorities in respect of product sales. 59 Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contract assets are recognized for in related accounts receivable.
The Company’s sales are net of value added tax (“VAT”) and business tax and surcharges collected on behalf of tax authorities in respect of product sales. Contract Assets and Liabilities Payment terms are established based on the Company’s pre-established credit requirements after an evaluation of customers’ credit quality. Contract assets are recognized as related accounts receivable.
As of December 31, 2022 and 2021, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet.
As of December 31, 2024 and 2023, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet.
The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of income and comprehensive income. Recently issued accounting guidance The Company considers the applicability and impact of all accounting standards updates (“ASUs”).
The foreign currency translation gain or loss resulting from translating the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of income and comprehensive income. Recently issued accounting guidance The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards issued.
There were nil investing activities for the year ended December 31, 2022. Financing Activities Net cash provided by financing activities was $40.0 million for the year ended December 31, 2023, consisting of $40.0 million proceeds from a private placement, partially offset by the repayment of $55,000 in convertible promissory note payable.
Net cash provided by financing activities was $40.0 million for the year ended December 31, 2023, consisting of $40.0 million proceeds from a private placement, partially offset by the repayment of $55,000 in convertible promissory note payable.
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, 2022 and 2021 are disclosed in Note 14 to the financial statements.
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, 2024 and 2023 is disclosed in Note 16 to the financial statements.
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 do not meet the definition of a derivative instruments and an embedded feature would not be bifurcated.
Since the Company’s notes have a fixed interest rate, specified notional principal and settlement date, with no other events affecting settlement, and because the Company received net proceeds after issuance costs and discount (recorded as net proceeds or net settled investment), management assessed that the Notes do not meet the definition of derivative instruments and that any embedded feature would not be bifurcated.
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.
According to ASC 815-40, the “down-round protection” provision is not considered an input to the fair value of a fixed-for-fixed option on equity shares which causes the Warrants to fail to qualify as indexed to the Company’s own stock and therefore fail to meet the scope exceptions of ASC 815.
This was mainly due to the increase of 2.6% in sales volume, and an increase of 7.1% in the average selling price of our products in RMB, and 5.2% negative impact from exchange rate due to depreciation of RMB against US dollars, as compared with those of the same period of last year.
This was mainly due to the increase of 4.8% in sales volume, and an increase of 3.2% in the average selling price of our products in RMB, and 1.6% negative impact from exchange rate due to depreciation of RMB against US dollars, as compared with those of the same period in 2023.
Significant estimates required to be made by management include, but are not limited to, the allowance for estimated uncollectible receivables, 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.
Significant estimates required to be made by management include, but are not limited to, the allowance for estimated uncollectible receivables, inventory valuations, useful lives of property, plant and equipment, intangible assets, operating leases, the recoverability of long-lived assets, provisions necessary for contingent liabilities, revenue recognition and realization of deferred tax assets.
These estimates are based on information as of the date of the consolidated financial statements.
These estimates are based on information available at the date of the consolidated financial statements.
Nil and $74,100 inventory write-off was recorded for the year ended December 31, 2023 and 2022, respectively. 60 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.
Convertible Promissory Notes The Company accounts for its convertible promissory notes in according with 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.
General and Administrative Expenses Years Ended December 31, Change (in millions, except percentage) 2023 2022 Amount % General and Administrative Expenses $ 3.8 $ 1.3 $ 2.5 192.3 % as a percentage of revenues 9.6 % 3.4 % 6.2 % General and administrative expenses were $3.8 million for the year ended December 31, 2023, compared to $1.3 million in the same period in 2022, representing an increase of $2.5 million, or 192.3%.
General and Administrative Expenses Years Ended December 31, Change (in millions, except percentage) 2024 2023 Amount % General and Administrative Expenses $ 3.5 $ 3.8 $ (0.3 ) (7.9 )% as a percentage of revenues 8.3 % 9.6 % (1.3 )% General and administrative expenses were $3.5 million for the year ended December 31, 2024, compared to $3.8 million in the same period in 2023, representing a decrease of $0.3 million, or 7.9%.
Inventories 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.
Actual results could differ from those estimates. 65 Inventories 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 the weighted average method. For work-in-process and manufactured inventories, cost consists of raw materials, direct labor and an allocated portion of the Company’s production overhead.
As of December 31, 2023, we had current assets of $106.8 million, consisting of $98.0 million in cash, $7.4 million in accounts receivable, $0.2 million in inventories, and $1.1 million in prepaid expenses other current assets.
As of December 31, 2024, we had current assets of $114.1 million, consisting of $103.7 million in cash, $7.5 million in accounts receivable, $0.1 million in inventories, and $2.8 million in prepaid expenses and other current assets.
The Company concluded that the Warrants issued in November and December 2021 financing should be treated as a derivative liability because the Warrants are entitled to a price adjustment provision 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 more or less than the then-applicable exercise price or without consideration, which is typically referred to as a “Down-round protection” or “anti-dilution” provision.
The Company concluded that the Note Warrants (as defined in NOTE 10 – CONVERTIBLE PROMISSORY NOTES PAYABLE – ii) Warrants) issued in October, November and December 2021 financings should be treated as a derivative liability because the Warrants are entitled to a price adjustment provision that allows the exercise price to be adjusted if the Company issues or sells any additional shares of common stock at a price per share more or less than the then-applicable exercise price or without consideration, which is typically referred to as a “down-round protection” or “anti-dilution” provision.
The Company continued to shift production mix from traditional lower-end products to high-end touchscreens used in industrial control computers, gaming machines, and automobiles, primarily due to (i) greater growth potential of computer screen models in China, and (ii) stronger demand and better quality demand from consumers’ recognition of higher-end touchscreens made with better materials. 52 Gross Profit and Gross Profit Margin Years Ended December 31, Change (in millions, except percentage) 2023 2022 Amount % Gross Profit $ 17.2 $ 14.0 $ 3.2 22.8 % Gross Profit Margin 43.3 % 37.0 % 6.3 % Gross profit was $17.2 million during the year ended December 31, 2023, compared to $14.0 million in the same period of 2022.
The Company continued to shift production mix from traditional lower-end products to high-end touchscreens used in automotive touchscreens, gaming touchscreens, medical touchscreens, and industrial control computer touchscreens, primarily due to (i) greater growth potential of computer screen models in China and overseas, and (ii) stronger demand for higher-end touchscreens made with better materials and better quality. 59 Gross Profit and Gross Profit Margin Years Ended December 31, Change (in millions, except percentage) 2024 2023 Amount % Gross Profit $ 13.6 $ 17.2 $ (3.6 ) (20.9 )% Gross Profit Margin 32.2 % 43.3 % (11.1 )% Gross profit was $13.6 million during the year ended December 31, 2024, compared to $17.2 million in the same period of 2023.
As of December 31, 2023 and 2022, the Company recorded $378,371 and $256,957 common stock purchase warrant liability, respectively, and loss of $121,413 and gain of $871,677 on change of fair value of common stock purchase warrant liability for the year ended December 31, 2023 and 2022, respectively.
As of December 31, 2024 and 2023, the Company recorded nil and $378,371 of common stock purchase warrant liability, respectively, and a $378,371 gain and a $121,413 loss on changes in the fair value of common stock purchase warrant liability for the year ended December 31, 2024 and 2023, respectively.
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.
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. $54,873 and nil inventory write-off was recorded for the years ended December 31, 2024 and 2023, respectively.
No significant income was generated outside the PRC for the fiscal years ended December 31, 2023 and 2022. As of December 31, 2023, all of the Company’s tax returns of its PRC Subsidiaries remain open for statutory examination by PRC tax authorities. Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and amortization.
No significant income was generated outside the PRC for the fiscal years ended December 31, 2024 and 2023. As of December 31, 2024 and 2023, all of the Company’s tax returns for its PRC Subsidiaries remain open for statutory examination by PRC tax authorities.
No significant penalties or interest relating to income taxes have been incurred during the years ended December 31, 2023 and 2022. The Company does not believe there was any uncertain tax provision at December 31, 2023 and 2022. The Company’s operating subsidiaries in China are subject to the income tax laws of the PRC.
No significant penalties or interest relating to income taxes were incurred during the years ended December 31, 2024 and 2023. The Company believes that there were no uncertain tax positions as of December 31, 2024 and 2023. The Company’s operating subsidiaries in China are subject to the income tax laws of the PRC.
Net cash used in the financing activities was $0.7 million for the year ended December 31, 2022, including $1.4 million of repayment of convertible promissory note payable, partially offset by proceeds of a third party loan of $0.4 million.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $7.6 million, including $9.0 million in net proceeds from the 2024 Uplisting Offering, partially offset by $1.4 million repayment of convertible promissory notes.
This would likely adversely affect demand on some of our products or services, which may, in turn negatively impact our results of operations. 50 Highlights for the Year Ended December 31, 2023 ● Revenues were $39.7 million, an increase of 4.7% from $37.9 million for the year ended December 31, 2022 ● Gross profit was $17.2 million, an increase of 22.8% from $14.0 million for the year ended December 31, 2022 ● Gross profit margin was 43.3%, as compared to 37.0% for the year ended December 31, 2022 ● Net income was $8.3 million, a decrease of 4.6% from $8.7 million for the year ended December 31, 2022 ● Total volume shipped was 1,967,316 units, an increase of 2.6% from 1,916,976 units for the year ended December 31, 2022 Results of Operations The following table sets forth, for the periods indicated, statements of income data: (in US Dollar millions, except percentage) For the Years Ended December 31, Change 2023 2022 % Revenues $ 39.7 $ 37.9 4.7 % Cost of revenues (22.5 ) (23.9 ) (5.9 )% Gross profit 17.2 14.0 22.8 % Total operating expenses (4.5 ) (2.6 ) 73.1 % Operating income 12.7 11.4 11.4 % Total other income (expense), net (0.3 ) 0.7 142.9 % Income before income taxes 12.4 12.1 2.5 % Income tax expense (4.1 ) (3.4 ) 20.6 % Net income $ 8.3 $ 8.7 (4.6 )% For the Years Ended December 31, 2023 and 2022 Revenues Revenues were $39.7 million in the year ended December 31, 2023, an increase of $1.8 million, or 4.7%, compared with $37.9 million in the same period of last year.
Business - Corporate History and Structure - Reverse Stock Splits. ” Highlights for the Year Ended December 31, 2024 ● Revenues were $42.3 million, an increase of 6.5% from $39.7 million for the year ended December 31, 2023. ● Gross profit was $13.6 million, a decrease of 20.9% from $17.2 million for the year ended December 31, 2023. ● Gross profit margin was 32.2%, as compared to 43.3% for the year ended December 31, 2023. ● Net income was $6.0 million, a decrease of 27.7% from $8.3 million for the year ended December 31, 2023. ● Total volume of touchscreens shipped was 2,060,870 units, an increase of 4.8% from 1,967,316 units of touchscreens for the year ended December 31, 2023. 57 Results of Operations The following table sets forth, for the periods indicated, statements of income data: For the Years Ended December 31, Change (in US Dollar millions, except percentage) 2024 2023 % Revenues $ 42.3 $ 39.7 6.5 % Cost of revenues (28.7 ) (22.5 ) 27.6 % Gross profit 13.6 17.2 (20.9 )% Total operating expenses (4.3 ) (4.5 ) (4.4 )% Operating income 9.3 12.7 (26.8 )% Total other expense, net (0.6 ) (0.3 ) 100.0 % Income before income taxes 8.7 12.4 (29.8 )% Income tax expense (2.7 ) (4.1 ) (34.1 )% Net income $ 6.0 $ 8.3 (27.7 )% For the Years Ended December 31, 2024 and 2023 Revenues Revenues were $42.3 million for the year ended December 31, 2024, representing an increase of $2.6 million, or 6.5%, compared with $39.7 million for the same period in 2023.
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).
The Company currently does not have any financial instrument that reference to LIBOR and does not anticipate the adoption will have a material impact to the Company’s combined and consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740).
The distributions from our PRC subsidiary are subject to the U.S. federal income tax at 21%, less any applicable foreign tax credits. Due to our policy of indefinitely reinvesting our earnings in our PRC business, we have not provided for deferred income tax liabilities related to PRC withholding income tax on undistributed earnings of our PRC subsidiaries.
Due to our policy of indefinitely reinvesting our earnings in our PRC business, we have not provided for deferred income tax liabilities related to PRC withholding income tax on undistributed earnings of our PRC subsidiary.
In accordance to 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.
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. 64 In accordance with ASC 606, the Company recognizes revenue when it transfers its goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange.
The following table summarizes the breakdown of revenues by categories in US dollars: Revenues For the Years Ended December 31, 2023 2022 Change Change Amount % Amount % Amount Margin% (in US Dollars, except percentage) Product categories by end applications Automotive Touchscreens $ 9,780,713 24.6 % $ 9,293,357 24.5 % $ 487,356 5.2 % Industrial Control Computer Touchscreens 7,884,224 19.9 % 7,991,356 21.1 % (107,132 ) (1.3 )% POS Touchscreens 6,613,501 16.7 % 6,556,348 17.3 % 57,153 0.9 % Gaming Touchscreens 5,619,228 14.2 % 5,199,118 13.7 % 420,110 8.1 % Medical Touchscreens 5,799,489 14.6 % 5,050,067 13.3 % 749,422 14.8 % Multi-Functional Printer Touchscreens 4,008,784 10.1 % 3,822,054 10.1 % 186,730 4.9 % Others* - 0.0 % 10,812 0.0 % (10,812 ) (100.0 )% Total Revenues $ 39,705,939 100.0 % $ 37,923,112 100.0 % $ 1,782,827 4.7 % *Others include applications in self-service kiosks, ticket vending machines and financial terminals.
The following table summarizes the breakdown of revenues by categories in US dollars: Revenues For the Years Ended December 31, 2024 2023 Change Change Amount % Amount % Amount Margin% (in US Dollars, except percentage) Product categories by end applications Automotive Touchscreens $ 11,513,813 27.2 % $ 9,780,713 24.6 % $ 1,733,100 17.7 % Industrial Control Computer Touchscreens 8,212,232 19.4 % 7,884,224 19.9 % 328,008 4.2 % Gaming Touchscreens 6,462,723 15.3 % 5,619,228 14.1 % 843,495 15.0 % Medical Touchscreens 6,282,892 14.9 % 5,799,489 14.6 % 483,402 8.3 % POS Touchscreens 6,255,175 14.8 % 6,613,501 16.7 % (358,325 ) (5.4 )% Multi-Functional Printer Touchscreens 3,559,538 8.4 % 4,008,784 10.1 % (455,246 ) (11.4 )% Total Revenues $ 42,280,373 100.0 % $ 39,705,939 100.0 % $ 2,574,434 6.5 % * Others include applications in self-service kiosks, ticket vending machines and financial terminals.
Gain (loss) on Changes in Fair Value of Common Stock Purchase Warrants Years Ended December 31, Change (in millions, except percentage) 2023 2022 Amount % Gain (loss) on changes in fair value of common stock purchase warrants $ (0.1 ) $ 0.9 $ (1.0 ) 111.1 % as a percentage of revenues (0.3 )% 2.4 % (2.7 )% Loss on changes in fair value of common stock purchase warrants was $0.1 million for the year ended December 31, 2023, as compared to a gain of $0.9 million in the same period of 2022.
Gain on changes in fair value of common stock purchase warrants was $378,371 for the year ended December 31, 2024, as compared to a loss of $121,413 in the same period of 2023. 61 Income Taxes Years Ended December 31, Change (in millions, except percentage) 2024 2023 Amount % Income before Income Taxes $ 8.7 $ 12.4 $ (3.7 ) (29.8 )% Income Tax Expense (2.7 ) (4.1 ) (1.4 ) (34.1 )% Effective income tax rate 30.6 % 33.1 % (2.5 )% The effective income tax rate for the years ended December 31, 2024 and 2023 was 30.6% and 33.1%, respectively.
Capital Expenditure Commitment As of December 31, 2023, the Company has no capital expenditure commitment. 58 Off-Balance Sheet Arrangements We had no off-balance sheet arrangements as of December 31, 2023.
Off-Balance Sheet Arrangements We had no off- balance sheet arrangements as of December 31, 2024.
Selling Expenses Years Ended December 31, Change (in millions, except percentage) 2023 2022 Amount % Selling Expenses $ 0.6 $ 1.3 $ (0.7 ) (53.8 )% as a percentage of revenues 1.5 % 3.5 % (2.0 )% Selling expenses were $0.6 million for the years ended December 31, 2023, compared to $1.3 million in the same period in 2022, representing a decrease of $0.7 million, or 53.8%.
Selling Expenses Years Ended December 31, Change (in millions, except percentage) 2024 2023 Amount % Selling Expenses $ 0.8 $ 0.6 $ 0.2 33.3 % as a percentage of revenues 1.9 % 1.5 % 0.4 % Selling expenses were $0.8 million for the year ended December 31, 2024, compared to $0.6 million in the same period in 2023, representing an increase of $0.2 million, or 133.3%, primarily due to an increase in traveling and transportation expenses of our selling and marketing team to visit customers and attend exhibitions in order to promote the increase of sales during the year ended December 31, 2024.
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.
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 Company used a Black-Scholes-pricing model to estimate the fair values of common stock purchase warrants at the balance sheet dates.
Pursuant to ASC 815, derivatives are measured at fair value and remeasured at fair value with changes in fair value recorded in earnings for each reporting period. 66 The Company used a Black-Scholes pricing model to estimate the fair values of common stock purchase warrants at the balance sheet dates.
There is no assurance that exchange rates between the RMB and the U.S. Dollar will remain stable. Inflation has not had a material impact on the Company’s business. Holding Company Structure Wetouch is a holding company and a company incorporated in Nevada with no material operations of its own.
There is no assurance that exchange rates between the RMB and the U.S. Dollar will remain stable. Inflation has not had a material impact on the Company’s business. 63 COMMITMENTS AND CONTINGENCIES Capital Expenditure Commitment As of December 31, 2024, the Company had commitment of RMB5.0 million (equivalent to $0.7 million) for construction in progress.
We conduct substantially all of our operations through our subsidiary established in mainland China. Our equity structure is a direct holding structure, that is, Wetouch, a Nevada corporation listed in the U.S., controls Sichuan Vtouch though BVI Wetouch. See “Item 1. Business – Corporate History and Structure ” for more details.
See “Special Note Regarding Forward-Looking Statements.” Overview The Company is a Nevada holding company with no material operations of its own. We conduct substantially all of our operations through our subsidiary in mainland China, which we control through BVI Wetouch. See “Item 1. Business – Corporate History and Structure” for more details.
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. 63 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.
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.
As a result of the Reverse Merger, BVI Wetouch became our wholly-owned subsidiary. Through our wholly-owned subsidiaries, BVI Wetouch, HK Wetouch, and Sichuan Vtouch, we are engaged in the research, development, manufacturing, sales and servicing of medium to large sized projected capacitive touchscreens.
Risk Factors - Risks Related to Doing Business in China - Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment. ” 56 Through our wholly owned subsidiaries, BVI Wetouch, HK Wetouch, and Sichuan Vtouch, we are engaged in the research, development, manufacturing, sales and servicing of medium- to large-sized projected capacitive touchscreens.
Our current liabilities as of December 31, 2023, were $6.3 million, which is comprised of $0.6 million in accounts payable, $0.5 million in loans from a third party, $4.0 million in accrued expenses and other current liabilities and $1.2 million in convertible promissory notes payable.
Our current liabilities as of December 31, 2024 were $3.0 million, which comprised of $1.3 million in accounts payable, $0.1 million due to related parties, $1.0 million in accrued expenses and other current liabilities and $0.6 million in operating lease liabilities, current portion. We also had $0.5 million in operating lease liabilities, non- current as of December 31, 2024.
Risk Factors—Risks Related to Doing Business in China — “Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment .” We currently do not have cash management policies that dictate how funds are transferred between our holding company and our subsidiaries.
Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system, including the enforcement of laws and changes in laws and regulations, could adversely affect us and limit the legal protections available .” We currently do not have cash management policies dictating how funds are transferred between the Company and its subsidiaries.
The discounts on the convertible notes, are amortized to interest expense, using the effective interest method, over the terms of the related convertible notes.
The discounts on the convertible notes, were amortized to interest expense, using the effective interest method, over the terms of the related convertible notes. On February 23, 2024, immediately upon the closing of the 2024 Public Offering, the Company made a full payment on the remaining five outstanding promissory notes.
For the Years Ended December 31, 2023 2022 Change Change Amount % Amount % Amount % (in US Dollar except percentage) Revenue from sales to customers in the PRC $ 27,646,722 69.6 % $ 26,440,376 69.7 % $ 1,206,346 4.6 % Revenue from sales to customers overseas 12,059,217 30.4 % 11,482,736 30.3 % 576,481 5.0 % Total Revenues $ 39,705,939 100 % $ 37,923,112 100 % $ 1,782,827 4.7 % For the Years Ended December 31, 2023 2022 Change Change Unit % Unit % Unit % (in Unit, except percentage) Units sold to customers in the PRC 1,330,013 67.6 % 1,295,097 67.6 % 34,916 2.7 % Units sold to customers overseas 637,303 32.4 % 621,879 32.4 % 15,424 2.5 % Total Units Sold 1,967,316 100 % 1,916,976 100 % 50,340 2.6 % PRC Dom estic Market For the year ended December 31, 2023, revenue from the PRC domestic market increased by $1.2 million or 4.6%, as a combined result of (i) the increase of 2.7% in sales volume, and an increase of 6.8% in the average sales price of our products in RMB, and (ii) 5.2% negative impact from exchange rate due to depreciation of RMB against US dollars, as compared with those of the same period of last year. 51 The increase of 6.8% in sales price in RMB was mainly due to the marketing initiatives to enhance sales of new models of higher-end products such as multi-functional printer touchscreens, industrial control computer touchscreens, medical touchscreens, and POS touchscreens in - Southwest and East China during the year ended December 31, 2023.
For the Years Ended December 31, 2024 2023 Change Change Amount % Amount % Amount % (in US Dollar except percentage) Revenue from sales to customers in the PRC $ 27,340,555 64.7 % $ 27,668,985 69.7 % $ (328,430 ) (1.2 )% Revenue from sales to customers overseas 14,939,818 35.3 % 12,036,954 30.3 % 2,902,864 24.1 % Total Revenues $ 42,280,373 100 % $ 39,705,939 100 % $ 2,574,434 6.5 % For the Years Ended December 31, 2024 2023 Change Change Unit % Unit % Unit % (in Unit, except percentage) Units sold to customers in the PRC 1,309,240 63.5 % 1,330,013 67.6 % (20,773 ) (1.6 )% Units sold to customers overseas 751,630 36.5 % 637,303 32.4 % 114,327 17.9 % Total Units Sold 2,060,870 100 % 1,967,316 100 % 93,554 4.8 % 58 PRC Domestic Market For the year ended December 31, 2024, revenue from the PRC domestic market decreased by $0.3 million or 1.2%, as a combined result of (i) the decrease of 1.6% in sales volume, primarily attributable to weakened market demand, consistent with the overall macroeconomic conditions in China in 2024, and (ii) 1.6% negative impact from exchange rate due to depreciation of RMB against US dollars, partially offset by (iii) an increase of 2.0% in the average sales price of our products in RMB, and as compared with those of the same period in 2023.
Overseas Market For the year ended December 31, 2023, revenue from overseas market was $12.1 million as compared to $11.5 million of the same period of 2022, an increase of $0.6 million, or 5.0%, mainly due to an increase of 2.5% in sales volume and an increase of 7.8% in average selling price in RMB for gaming touchscreens and industrial control computer touchscreens.
Our sales increased by 6.0% in Southwest China, partially offset by a decrease of 2.4% in East China, and 0.8% in South China during the year ended December 31, 2024, Overseas Market For the year ended December 31, 2024, revenue from overseas markets was $14.9 million as compared to $12.1 million of the same period of 2023, representing an increase of $2.8 million, or 24.1%, primarily due to i) an increase of 17.9% in sales volume, particularly driven by higher demand for the automotive touchscreens, gaming touchscreens, and industrial control touchscreens, (ii) 6.8% increase in average RMB selling price of the products, particularly in the product of industrial control touchscreens and automotive touchscreens, as the Company had greater pricing power due to the higher demand for the products during the year ended December 31, 2024, partially offset by (iii) the 1.6% negative impact from exchange rate due to depreciation of RMB against US dollars, compared with those of the same period in 2023.
Operating Income Total operating income was $12.7 million for the year ended December 31, 2023 as compared to $11.4 million of the same period of last year due to higher gross profit and lower selling expenses, partially offset by higher general and administrative expenses.
The Company did not incur any research and development expenses during the year ended December 31, 2024. Operating Income Total operating income was $9.3 million for the year ended December 31, 2024 as compared to $12.7 million for the same period in 2023, a decrease of $3.4 million or 26.8%.
Our gross profit margin increased to 43.3% during the year ended December 31, 2023 as compared to 37.0% for the same period of 2022, primarily due to the increase in sales of 4.7%, particularly high-end products such as industrial control computer touchscreens, automotive touchscreens, and gaming touchscreens for the year ended December 31, 2023, the decrease of 1.4% in material costs, partially offset by the increase in labor cost of 9.0% for the year ended December 31, 2023.
Our gross profit margin decreased to 32.2% during the year ended December 31, 2024 as compared to 43.3% for the same period of 2023, primarily due to i) an increase of 29.9% in cost of goods sold, and ii) sales discount to certain long-term customers at year-end.
Our Days Sales Outstanding (“DSO”) decreased to 75 days for the year ended December 31, 2023 from 81 days for the year ended December 31, 2022.
Our Days Sales Outstanding (“DSO”) decreased to 64 days for the year ended December 31, 2024 from 75 days for the year ended December 31, 2023 due to our faster collection of accounts receivables. The majority of the Company’s revenues and expenses were denominated primarily in RMB, the currency of the People’s Republic of China.
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.
Therefore, the Company accounted for the Warrants as derivative liabilities under ASC 815.
For details regarding the restrictions on our ability to transfer cash between us, and our subsidiaries, see “ Item 1A.
Most of our cash is maintained in Renminbi in mainland China and may be subject to PRC restrictions on outbound transfers. For details, see “ Item 1A.
Removed
See “Special Note Regarding Forward-Looking Statements.” Overview We were originally incorporated under the laws of the state of Nevada in August 1992.
Added
Because our operations are primarily in China, we are subject to complex and evolving PRC laws and regulations. These include restrictions on capital flows, dividend payments, currency conversion, cybersecurity and data privacy, and governmental discretion over overseas securities offerings. These risks could materially affect our ability to transfer funds, conduct offerings, or continue operations in their current form.
Removed
On October 9, 2020, we entered into the Share Exchange Agreement with BVI Wetouch and all the shareholders of BVI Wetouch, to acquire all the issued and outstanding capital stock of BVI Wetouch in exchange for the issuance to such shareholders an aggregate of 28 million shares of our common stock. The Reverse Merger closed on October 9, 2020.
Added
See “Item 1A. Risk Factors—Risks Related to Doing Business in China.” As of March 31, 2025, the Company has contributed RMB 348.0 million (US$47.7 million) to its PRC subsidiary through intermediate holding companies, which were accounted for as long-term investments. These funds have been used by our PRC subsidiary in its operations.
Removed
On July 16, 2023, the Company’s board of directors approved a reverse stock split of the Company’s common stock at a ratio of 1-for-20.
Added
To date, no dividends or other distributions have been made by our PRC subsidiary to the Company. We may rely on future distributions from our PRC subsidiary to fund our holding company obligations, subject to PRC law and restrictions. For more details, see “ Item 1A.
Removed
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 Nevada Revised Statutes 78.209 to effectuate a 1-for-20 reverse stock split of its outstanding common stock.
Added
Risk Factors—Risks Related to Doing Business in China—As a holding company, we conduct our operations primarily through our PRC subsidiary and face risks and uncertainties associated with this structure. ” Under current PRC law, dividend payments by our PRC subsidiary are limited to accumulated profits determined in accordance with PRC accounting standards and are subject to statutory reserve requirements.
Removed
On September 11, 2023, the Company received notice from FINRA/OTC Corporate Actions the reverse split would take effect at the open of business on September 12, 2023, and the reverse stock that split took effect on that date.
Added
Dividends to the Company are also subject to withholding tax, generally 10%, but reduced to 5% if treaty conditions are met. There is no assurance that the reduced rate will apply. For more details, see “ Item 1A.
Removed
All share information included in this Form 10-K has been reflected as if the reverse stock split occurred as of the earliest period presented. Effects of COVID-19 There has been a global pandemic of a novel strain of coronavirus (COVID-19) that first emerged in China in December 2019 and has spread globally.
Added
We generate revenues through sales of our various touchscreen products. For the years ended December 31, 2024 and 2023, we recognized approximately $42.3 million and $39.7 million, respectively, in total revenues.
Removed
In March 2020, the World Health Organization declared COVID-19 as a global pandemic. The COVID-19 pandemic has resulted in quarantines, travel restrictions, and the temporary closures of stores and business facilities in China for the first half year of 2020, along with various government-initiated COVID-19 containment measures implemented intermittently.
Added
We sell our touchscreen products both domestically in China and internationally, covering major areas in Mainland China, including but not limited to the eastern, southern, northern and southwest regions of Mainland China, Taiwan, South Korea, and Germany. We believe that we have established a strong and diversified client base.
Removed
Since the end of 2022, the Chinese government has eased the COVID-19 restrictions.
Added
For the years ended December 31, 2024 and 2023, our domestic sales accounted for approximately 64.7% and 69.6%, respectively, of our revenues, and our international sales accounted for approximately 35.3% and 30.3%, respectively, of our revenues.
Removed
Although we are currently fully functional, potential impact on our results of operations will also depend on future developments and information that may emerge regarding the duration and severity of COVID-19 and the actions taken by governmental authorities and other entities to contain COVID-19 or to mitigate its impacts, almost all of which are beyond our control.
Added
Since our incorporation, we have effected two reverse stock splits of our common stock, including a 1-for-70 reverse split in 2020 and a 1-for-20 reverse split in 2023, and all share and per share information in this Annual Report has been retroactively adjusted to reflect these actions. For more details, see “ Item 1.
Removed
The Company has several shutdowns during the first quarter of 2023. To serve our customers while also providing for the safety of our employees and service providers, we have modified numerous aspects of our logistics, transportation, supply chain, purchasing, and after-sale processes.

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