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TDH Holdings, Inc.

TDH Holdings, Inc.PETZ财报

Nasdaq · 必需消费 · 房地产代理与管理（为他人）

TDH Holdings, Inc. is a pet product enterprise that develops, manufactures and distributes a comprehensive portfolio of pet food, nutritional treats, and daily pet supplies for dogs and cats. Its primary market is mainland China, catering to both online e-commerce and offline physical retail customer segments.

What changed in TDH Holdings, Inc.'s 20-F — 2023 vs 2024

Top changes in TDH Holdings, Inc.'s 2024 20-F

632 paragraphs added · 472 removed · 204 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

46 edited+136 added−101 removed214 unchanged
Our auditor is headquartered in California and was last inspected by the PCAOB in March 2023. According to our auditor, the PCAOB will conduct regular inspections.
Our auditor is headquartered in California and was last inspected by the PCAOB in March 2023. According to our auditor, the PCAOB will conduct regular inspections.
We do not believe that such measures will have any impact on our income derived from payment from our WFOE because: ● We do not fall within the scope of special access administrative measures for foreign investment admission as stipulated by the state, and therefore are not required to go through approval procedures. 13 ● The Establishment and Changes Provision regulates the recordation procedures relating to the establishment and changes of a foreign-invested enterprise, which including but not limited to: (i) the changes of company name, registered address, duration of operation, business scope, registered capital, total investment, shareholders, merger, division and termination of the enterprise; and (ii) the corporate name change, domicile or place of incorporation, subscribed capital, investment period.
We do not believe that such measures will have any impact on our income derived from payment from our WFOE because: ● We do not fall within the scope of special access administrative measures for foreign investment admission as stipulated by the state and therefore are not required to go through approval procedures. ● The Establishment and Changes Provision regulates the recordation procedures relating to the establishment and changes of a foreign-invested enterprise, which including but not limited to: (i) the changes of company name, registered address, duration of operation, business scope, registered capital, total investment, shareholders, merger, division and termination of the enterprise; and (ii) the corporate name change, domicile or place of incorporation, subscribed capital, investment period.
If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to our shareholders. PRC’s labor law restricts our ability to reduce our workforce in the PRC in the event of an economic downturn and may increase our production costs.
If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to our shareholders. 14 PRC’s labor law restricts our ability to reduce our workforce in the PRC in the event of an economic downturn and may increase our production costs.
Accordingly, if we face future periods of decline in business activity generally or adverse economic periods specific to our business, these new laws can be expected to exacerbate the adverse effect of the economic environment on our results of operations and financial condition. 14 Changes in PRC’s political and economic policies could harm our business.
Accordingly, if we face future periods of decline in business activity generally or adverse economic periods specific to our business, these new laws can be expected to exacerbate the adverse effect of the economic environment on our results of operations and financial condition. Changes in PRC’s political and economic policies could harm our business.
However, if any of us is deemed to be a critical information infrastructure operator or a company that is engaged in data processing and holds personal information of more than one million users, we could be subject to PRC cybersecurity review. 10 As of the date hereof, we are of the view that we and our PRC subsidiaries are in compliance with the applicable PRC laws and regulations governing the data privacy and personal information in all material respects, including the data privacy and personal information requirements of the CAC, and we and our PRC subsidiaries have not received any complaints from any third party, or been investigated or punished by any PRC competent authority in relation to data privacy and personal information protection.
However, if any of us is deemed to be a critical information infrastructure operator or a company that is engaged in data processing and holds personal information of more than one million users, we could be subject to PRC cybersecurity review. 11 As of the date hereof, we are of the view that we and our PRC subsidiaries are in compliance with the applicable PRC laws and regulations governing the data privacy and personal information in all material respects, including the data privacy and personal information requirements of the CAC, and we and our PRC subsidiaries have not received any complaints from any third party, or been investigated or punished by any PRC competent authority in relation to data privacy and personal information protection.
The recent developments would add uncertainties to our listing and we cannot assure you whether Nasdaq Capital Market or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach, or experience as it relates to our audit. 18 The HFCA Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
The recent developments would add uncertainties to our listing and we cannot assure you whether Nasdaq Capital Market or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach, or experience as it relates to our audit. 20 The HFCA Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB.
Nationalization or expropriation could even result in the total loss of our investment in the PRC and in the total loss of any investment in us. Because our operations are located in the PRC, information about our operations is not readily available from independent third-party sources.
Nationalization or expropriation could even result in the total loss of our investment in the PRC and in the total loss of any investment in us. Because the majority of our operations are located in the PRC, information about our operations is not readily available from independent third-party sources.
Our auditor, the independent registered public accounting firm that issues the audit report for the year ended December 31, 2022 included elsewhere in this annual 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 for the year ended December 31, 2024 included elsewhere in this annual 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 for the year ended December 31, 2023 included elsewhere in this annual 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 for the year ended December 31, 2024 included elsewhere in this annual 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.
This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources, or at all. 20 If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Shares may decline.
This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources, or at all. 22 If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Shares may decline.
These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial conditions and results of operations. 19 If our financial condition deteriorates as a NASDAQ listed company, we may not meet continued listing standards on the NASDAQ Capital Market.
These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial conditions and results of operations. 21 If our financial condition deteriorates as a NASDAQ listed company, we may not meet continued listing standards on the NASDAQ Capital Market.
On August 10, 2020, the SEC announced that SEC Chairman had directed the SEC staff to prepare proposals in response to the PWG Report, and that the SEC was soliciting public comments and information with respect to these proposals. 17 On March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the Act.
On August 10, 2020, the SEC announced that SEC Chairman had directed the SEC staff to prepare proposals in response to the PWG Report, and that the SEC was soliciting public comments and information with respect to these proposals. 19 On March 24, 2021, the SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the Act.
In addition, any litigation in China may be protracted and result in substantial costs and diversion of our resources and management attention. 5 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 the value of our Common Shares.
In addition, any litigation in China may be protracted and result in substantial costs and diversion of our resources and management attention. 8 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 the value of our Common Shares.
Thus, if the value of the foreign currency decreases before you actually convert the currency into U.S. dollars, you will be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you will actually ultimately receive. 12 We may become a passive foreign investment company, which could result in adverse U.S. tax consequences to U.S. investors.
Thus, if the value of the foreign currency decreases before you actually convert the currency into U.S. dollars, you will be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you will actually ultimately receive. 13 We may become a passive foreign investment company, which could result in adverse U.S. tax consequences to U.S. investors.
There are also common law rights for the protection of shareholders that may be invoked, largely dependent on English common law, since the common law of the British Virgin Islands for business companies is limited. 21 We may not be able to pay any dividends on our shares in the future due to British Virgin Islands law.
There are also common law rights for the protection of shareholders that may be invoked, largely dependent on English common law, since the common law of the British Virgin Islands for business companies is limited. 24 We may not be able to pay any dividends on our shares in the future due to British Virgin Islands law.
Such developments could adversely affect our businesses, lead to reduction in demand for our products and services and adversely affect our competitive position. Uncertainties with respect to the PRC legal system could have a material adverse effect on us. The PRC legal system is based on written statutes.
Such developments could adversely affect our businesses, lead to reduction in demand for our properties and services and adversely affect our competitive position. Uncertainties with respect to the PRC legal system could have a material adverse effect on us. The PRC legal system is based on written statutes.
Furthermore, any adverse change in the economic conditions in China, in policies of the PRC government or in laws and regulations in China could have a material adverse effect on the overall economic growth of China and market demand for our products and services.
Furthermore, any adverse change in the economic conditions in China, in policies of the PRC government or in laws and regulations in China could have a material adverse effect on the overall economic growth of China and market demand for our properties and services.
Our shareholders may have greater difficulty in obtaining information about them on a timely basis than would shareholders of a U.S.-based company. Their operations will continue to be conducted in the PRC and shareholders may have difficulty in obtaining information about them from sources other than the companies themselves.
Our shareholders may have greater difficulty in obtaining information about them on a timely basis than would shareholders of a U.S.-based company. Because the majority of our operations will continue to be conducted in the PRC and shareholders may have difficulty in obtaining information about them from sources other than the companies themselves.
Foreign Corrupt Practices Act (“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.
We are subject to the U.S. Foreign Corrupt Practices Act (“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.
We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard. We may also be subject to sanctions imposed by PRC regulatory agencies including Chinese Securities Regulatory Commission (“CSRC”) if we fail to comply with their rules and regulations.
We are also subject to the risks of uncertainty about any future actions of the PRC government in this regard. We may also be subject to sanctions imposed by PRC regulatory agencies including the CSRC if we fail to comply with their rules and regulations.
If we are not able to effectively manage and acquire new restaurants that successfully generate revenue, we may not be able to grow and maintain our business as anticipated, and our sales may decline and our business, financial condition and results of operations may be materially adversely affected.
If we are not able to effectively manage and/or acquire new commercial properties that successfully generate revenue, we may not be able to grow and maintain our business as anticipated, and our revenue may decline and our business, financial condition and results of operations may be materially adversely affected.
Our business can potentially involve collecting and retaining certain internal and customer data. We also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customer, employee and company data is critical to our business. Our customers and employees expect that we will adequately protect their personal information.
We also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customer, employee and company data is critical to our business. Our customers and employees expect that we will adequately protect their personal information.
If we are unable to successfully take necessary steps, we may be unable to sustain or increase our profitability in the future. 2 We discontinued our petfood manufacturing segment and the turnaround of our business depends, in part, on our ability to successfully generate revenue in the restaurant segment.
If we are unable to successfully take necessary steps, we may be unable to sustain or increase our profitability in the future. We discontinued our restaurant segment, and the turnaround of our business depends, in part, on our ability to successfully generate revenue in the commercial real estate management business.
Our failure to make contributions to various employee benefit plans and in complying with applicable PRC labor-related laws may subject us to fines, penalties, government investigations or labor disputes and we could be required to make up the contributions for these plans as well as to pay late fees and fines, which may adversely affect our financial condition and results of operations.
Our failure to make contributions to various employee benefit plans and in complying with applicable PRC labor-related laws may subject us to fines, penalties, government investigations or labor disputes and we could be required to make up the contributions for these plans as well as to pay late fees and fines, which may adversely affect our financial condition and results of operations. 16 We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption law.
Information available from newspapers, trade journals, or local, regional or national regulatory agencies such as issuance of construction permits and contract awards for development projects will not be readily available to shareholders and, where available, will likely be available only in Chinese.
Information available from newspapers, trade journals, or local, regional or national regulatory agencies such as issuance of construction permits and contract awards for development projects will not be readily available to shareholders and, where available, will likely be available only in Chinese. Shareholders will be dependent upon management for reports of their progress, development, activities and expenditure of proceeds.
In addition, the Enterprise Income Tax Law of PRC, and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated. 16 Risks Related to the Ownership of Our Common Shares We are a holding company incorporated in the British Virgin Islands.
In addition, the Enterprise Income Tax Law of PRC, and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated.
If we are unable to resolve material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Shares could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.
However, i f we are unable to resolve material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Shares could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources. 23 As the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.
We are a holding company incorporated in the British Virgin Islands. We may need dividends and other distributions on equity from our PRC subsidiaries to satisfy our liquidity requirements. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations.
We are a holding company incorporated in the British Virgin Islands. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations.
For instance, various regulatory bodies in China, including the CAC, the Ministry of Public Security and the State Administration for Market Regulation, or the SAMR (formerly known as State Administration for Industry and Commerce, or the SAIC), have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations.
For instance, various regulatory bodies in China, including the CAC, the Ministry of Public Security and SAMR, have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations.
The Draft Rules Regarding Overseas Listing aim to lay out the filing regulation arrangement for both direct and indirect overseas listing and clarify the determination criteria for indirect overseas listing in overseas markers. 7 The Draft Rules Regarding Overseas Listing, among other things, stipulate that, after making initial applications with overseas stock markets for initial public offerings or listings, all China-based companies shall file with the CSRC within three working days.
The Draft Rules Regarding Overseas Listing, among other things, stipulate that, after making initial applications with overseas stock markets for initial public offerings or listings, all China-based companies shall file with the CSRC within three working days.
The value of the RMB fluctuates and is subject to changes in the PRC’s political and economic conditions. We do not currently engage in hedging activities to protect against foreign currency risks. Even if we choose to engage in such hedging activities, we may not be able to do so effectively.
We do not currently engage in hedging activities to protect against foreign currency risks. Even if we choose to engage in such hedging activities, we may not be able to do so effectively.
Affected third parties or government authorities could initiate legal or regulatory actions against us in connection with any actual or perceived security breaches or improper access to or disclosure of data, which could cause us to incur significant expense and liability, and our business and operations could be materially and adversely affected. 3 Risks Related to the Restaurant Segment Our restaurant base is geographically concentrated in Missouri, and we could be negatively affected by conditions specific to this state.
Affected third parties or government authorities could initiate legal or regulatory actions against us in connection with any actual or perceived security breaches or improper access to or disclosure of data, which could cause us to incur significant expense and liability, and our business and operations could be materially and adversely affected. 2 Risks Related to the Commercial Property Management Business In order to grow we need to continue to acquire investment properties.
The growth of the Chinese economy may not continue at a rate experienced in the past, and the impact of COVID-19 on the Chinese economy may continue. Any prolonged slowdown in the Chinese economy may reduce the demand for our services and materially and adversely affect our business and results of operations.
Any prolonged slowdown in the Chinese economy may reduce the demand for our services and materially and adversely affect our business and results of operations.
Our turnaround depends, in part, on our ability to successfully introduce manage and acquire new restaurants. This, in turn, depends on our ability to predict and respond to evolving consumer trends, demands and preferences. The management and acquisition of restaurants involves considerable costs.
We are now focusing on commercial real estate management business. Our turnaround depends, in part, on our ability to successfully acquire and/or sublet new commercial properties. This, in turn, depends on our ability to predict and respond to evolving tenant trends, demands and preferences. The management and acquisition of commercial properties involves considerable costs.
Shareholders will be dependent upon management for reports of their progress, development, activities and expenditure of proceeds. 15 Failure to comply with PRC laws and regulations related to labor and employee benefits may subject us to penalties or additional cost. Companies operating in China are required to comply with various laws and regulations related to labor and employment benefits.
Failure to comply with PRC laws and regulations related to labor and employee benefits may subject us to penalties or additional cost. Companies operating in China are required to comply with various laws and regulations related to labor and employment benefits.
As a result, it could be difficult for investors to effect service of process in the U.S., or to enforce a judgment obtained in the U.S. against us or any of these persons. 11 We may be subject to PRC regulatory limitations on merger and acquisition (M&A) activities.
As a result, it could be difficult for investors to effect service of process in the U.S., or to enforce a judgment obtained in the U.S. against us or any of these persons. 12 We hold certain of our cash balances in RMB in uninsured bank accounts in China.
Despite these efforts to develop a legal system, the PRC’s system of laws is not yet complete.
Since 1979, the Chinese government has promulgated many new laws and regulations covering general economic matters. Despite these efforts to develop a legal system, the PRC’s system of laws is not yet complete.
As a result of these differences, our business may not develop in the same way or at the same rate as might be expected if the PRC economy were similar to those of the OECD member countries. Since 1979, the Chinese government has promulgated many new laws and regulations covering general economic matters.
These differences include, without limitation: ● economic structure; ● level of government involvement in the economy; ● level of development; ● level of capital reinvestment; ● control of foreign exchange; ● methods of allocating resources; and ● balance of payments position. 15 As a result of these differences, our business may not develop in the same way or at the same rate as might be expected if the PRC economy were similar to those of the OECD member countries.
ITEM 3. KEY INFORMATION A. [Reserved] B. Capitalization and Indebtedness Not required. C. Reasons for the Offer and Use of Proceeds Not required. D. Risk factors You should carefully consider the following risk factors, together with all of the other information included in this Annual Report.
ITEM 3. KEY INFORMATION A. [Reserved] B. Capitalization and Indebtedness Not required. C. Reasons for the Offer and Use of Proceeds Not required. D. Risk factors Before you decide to purchase our Common Shares, you should understand the high degree of risk involved.
If a customer of our restaurant becomes ill from foodborne illnesses or as a result of food safety issues, it may be temporarily closed, which would decrease our revenues. 4 Risks Related to Doing Business in China Because of our corporate structure, we as well as the investors are subject to unique risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including but not limited to limitation regulatory review of overseas listing of PRC companies through a special purpose vehicle.
Lease payment defaults by tenants could negatively impact our net income and reduce the amounts available for distribution to stockholders. 7 Risks Related to Doing Business in China Because of our corporate structure, we as well as the investors are subject to unique risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including but not limited to limitation regulatory review of overseas listing of PRC companies through a special purpose vehicle.
If we are not able to effectively manage and acquire new restaurants that successfully generate revenue, we may not be able to grow and maintain our business as anticipated. In order to achieve profitability, among other factors, management must successfully execute our growth and restaurant operations in the markets on which we are focused.
Our business turnaround currently depends, in part, on our ability to successfully manage, acquire and lease new commercial properties. If we are not able to effectively manage, acquire and lease new commercial properties that successfully generate revenue, we may not be able to grow and maintain our business as anticipated.
Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions, which was made available to the public on July 6, 2021.
Further, on July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law, pursuant to which Chinese regulators are required to accelerate rulemaking related to the overseas issuance and listing of securities, and update the existing laws and regulations related to data security, cross-border data flow, and management of confidential information.
Given that the above mentioned newly promulgated laws, regulations and policies were recently promulgated or issued, and have not yet taken effect (as applicable), their interpretation, application and enforcement are subject to substantial uncertainties. Draft rules for China-based companies seeking for securities offerings in foreign stock markets was released by the CSRC for public consultation.
Draft rules for China-based companies seeking for securities offerings in foreign stock markets was released by the CSRC for public consultation.
We have historically incurred recurring losses and it is uncertain whether we may continue to incur losses in the future.
As a result, the trading price of our Common Shares could decline, perhaps significantly. 1 Risks Related to Our Business We have historically incurred recurring losses and it is uncertain whether we may continue to incur losses in the future. Historically, we reported recurring losses of approximately $23.63 million for the year ended December 31, 2023.
CSRC and other Chinese government agencies may exert more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers, especially those in the technology field. Additional compliance procedures may be required in connection offerings, and, if required, we cannot predict whether we will be able to obtain such approval.
We are required to file with the CSRC and may be subject to the approval of, filing or other procedures with other Chinese regulatory authorities in connection with securities offerings under PRC law, and we cannot predict whether we will be able, or how long it will take us, to obtain such approval or complete such filing or other procedures.
However, we fully discontinued our petfood manufacturing segment in 2023 and currently our revenue is substantially generated from the restaurant business segment. Our business turnaround currently depends, in part, on our ability to successfully introduce, manage and acquire new restaurants.
However, we fully discontinued our restaurant business segment in June 2024 and currently our revenue is substantially generated from our commercial real estate management business. Because the commercial real estate property management business is a newly added business line, our revenue from the commercial real estate management business segment only slightly increased by approximately $0.56 million as compared to 2023.
Removed
Risks Related to Our Business We may be subject to claims that were not discharged in Tiandihui’s bankruptcy proceedings, which could have a material adverse effect on our operating results and profitability. From time to time, the Company is a party to various legal actions arising in the ordinary course of business.
Added
You should carefully consider the following risks and other information in this report, including our consolidated financial statements and related notes. If any of the following risks actually occur, our business, financial condition and operating results could be adversely affected.
Removed
The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Since November 2019, the Company has been a subject of 57 lawsuits by its raw material supplies, printing and packaging supplies, transportation companies and other vendors.
Added
Although we reported a net income of approximately $2.68 million for the year ended December 31, 2024, some of our income was generated from investment income. For our continuing business operations, we still reported a loss from operations of approximately $1.83 million for the year ended December 31, 2024.
Removed
The claims raised in these lawsuits pertain to the Company’s non-payment of various invoices for supplier and vendor services rendered, with related interest and costs. In 44 cases, the creditors have reached civil conciliation letters with our company, and in 9 cases, the court has issued civil judgments.
Added
We discontinued our restaurant business during the second quarter of 2024 when TDH Income sold its 51% equity interest in Far Ling’s Inc. and 100% equity interests in Bo Ling’s Chinese Restaurant, Inc. Our decision to discontinue our restaurant business was driven largely by higher costs and its historical performance and expected business forecasts.
Removed
With respect to the remaining 4 cases, the plaintiffs withdrew the lawsuits because of lack of evidence. The settlement and judgments involved total claims of RMB13.86 million (USD $2.12 million). Such liabilities have been accrued and reflected in the consolidated financial statements for the year ended December 31, 2020.
Added
The acquisition of investment properties may be subject to competitive pressures. We face competition in the acquisition and operation of our properties. We expect competition from businesses, individuals, fiduciary accounts and plans, and other entities engaged in real estate investment and financing. This competition may result in a higher cost for properties we wish to purchase.
Removed
On March 13, 2021, a land use right and a factory building on the land owned by Tiandihui were auctioned by the court for $5,098,461 (RMB33.14 million).
Added
Negative market conditions or adverse events affecting our existing or potential tenants, or the industries in which they operate, could have an adverse impact on our ability to attract new tenants, re-lease space, collect rent or renew leases, which could adversely affect our cash flow from operations and inhibit growth.
Removed
On March 16, 2022, the People’s Court of Huangdao District, Qingdao City, Shandong Province made a civil ruling and announced the acceptance of creditors’ application of bankruptcy liquidation of Tiandihui, and it entered into bankruptcy proceedings.
Added
Cash flow from operations depends in part on our ability to lease space to our tenants on economically favorable terms and to collect rent from our clients on a timely basis.
Removed
On November 3, 2023, another land use right and a factory building on the land owned by Tiandihui were auctioned by the court for $875,321 (RMB 6.28 million). On December 27, 2023, the court announced that the bankruptcy property distribution plan of Tiandihui had been implemented and the bankruptcy proceedings were complete.
Added
We could be adversely affected by various facts and events over which we have limited or no control, such as: ● Lack of demand in areas where our properties are located; ● Inability to retain existing tenants and attract new tenants; ● Oversupply of space and changes in market rental rates; ● Declines in our tenants’ creditworthiness and ability to pay rent, which may be affected by their operations (including as a result from changes in consumer behaviors or preferences impacting our tenants operations), economic downturns and competition within their industries from other operators; ● Defaults by and bankruptcies of tenants, failure of tenants to pay rent on a timely basis, or failure of our tenants to comply with their contractual obligations; ● Changes in laws, rules or regulations that negatively impact clients or our properties; ● Epidemics, pandemics or outbreaks of illness, disease or virus that affect countries or regions in which our tenants or in which our properties are located; ● Changes in consumer behaviors (e.g., decrease in discretionary consumer spending), preferences or demographics impacting our tenants’ operations; ● Supply chain disruptions; ● Economic or physical decline of the areas where the properties are located; and ● Deterioration of physical condition of our properties.
Removed
As a result, Tiandihui has been fully disposed as of December 31, 2023, and substantially all the material claims against Tiandihui that arose prior to the date of the bankruptcy completion were addressed. However, we may be subject to claims that were not discharged in the bankruptcy proceedings, if any.
Added
If our tenants do not renew their leases as they expire, we may not be able to rent or sell the properties.
Removed
To the extent any pre-bankruptcy liability still remains, the ultimate resolution of such claims and other obligations may have a material adverse effect on our future operating results, profitability and financial condition. 1 The report of our independent registered public accounting firm on our financial statements includes an explanatory paragraph that expresses substantial doubt about our ability to continue as a going concern, and if our business is unable to continue it is likely investors will lose all of their investment.
Added
Leases that are renewed, and some new leases for properties that are re-leased, may have terms that are less economically favorable than expiring lease terms, or may require us to incur significant costs, such as renovations, improvements on behalf of the tenant or lease transaction costs.
Removed
As discussed in Note 2 to the consolidated financial statements to this Annual Report, the Company fully discontinued its petfood business during 2023 because the Tiandihui bankruptcy process was concluded and all claims against Tiandihui were processed by December 27, 2023. Currently the Company’s revenue is substantially generated from the restaurant business segment.
Added
Negative market conditions may cause us to sell vacant properties for less than their carrying value, which could result in impairments. Any of these events could adversely affect our cash flow from operations and our ability to make distributions to our stockholders and service our indebtedness.
Removed
The Company’s business turnaround currently depends, in part, on its ability to successfully introduce, manage and acquire new restaurants.
Added
A significant portion of the costs of owning and leasing property, such as real estate taxes, insurance and maintenance, are not necessarily reduced when circumstances cause a decrease in rental revenue from the properties.
Removed
If the Company is not able to effectively manage and acquire new restaurants that successfully generate revenue, it may not be able to grow and maintain its business as anticipated, and its sales may decline and its future business, financial condition and results of operations may be materially adversely affected.
Added
In a weakened financial condition, our tenants may not be able to pay these costs of ownership and we may be unable to recover these operating expenses from them. We face potential adverse effects from tenant bankruptcies or insolvencies. Bankruptcy filings or insolvencies by tenants can occur regularly in the course of our operations.
Removed
There can be no assurances that future revenue or capital infusion will be sufficient to enable the Company to develop its business to a level where it will be profitable or continuously to generate positive cash flows.
Added
Most of our tenants are individuals or individual businesses, and we cannot be sure that they will avoid the risk of insolvency.
Removed
Our auditor, YCM CPA Inc., has indicated in their report on the Company’s financial statements for the fiscal year ended December 31, 2023 that there is “substantial doubt about our ability to continue as a going concern”. A “going concern” opinion could impair our ability to finance our operations through the sale of equity, incurring debt, or other financing alternatives.
Added
However, in accordance with the Regulation on Individual Businesses (2016), and General Rules of the Civil Law (2017) in the PRC, the debts of an individual business shall be secured with the individual’s property if the business is operated by an individual and with the household’s property.
Removed
Management’s plan to alleviate the substantial doubt about our ability to continue as a going concern include working to improve the Company’s liquidity and capital sources mainly through cash flow from its operations and raise sufficient capital through equity or debt financing, strategic alliances or otherwise.
Added
Our tenant leases also provide that we are entitled to terminate the lease if the tenant cannot make rental payments to us in a timely manner, as well as to claim all pre-bankruptcy balances due under the lease, fines for delayed payments, the security deposit, and any related damages.
Removed
If we are unable to achieve these goals, our business will be jeopardized and we may not be able to continue. If we ceased operations, it is likely that all of our investors will lose their investment.
Added
A bankruptcy filing by, or relating to, one of our tenants would bar all efforts by us to collect pre-bankruptcy debts from that tenant, or from their property, unless we receive an order permitting us to do so from the court. In addition, we cannot be sure that their property is adequate to satisfy their debt.
Removed
In the absence of an additional liquidity, our ability to continue to operate will be impaired, and we may not be able to continue as a going concern.
Added
A bankrupt tenant may not vacate its space in a timely manner, and we may be unable to re-lease the vacated space during that time at attractive rates, or at all. Furthermore, we may be required to incur significant expense in replacing the bankrupt tenant.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

21 edited+237 added−73 removed49 unchanged
Effective August 2, 2019, Rongfeng Cui ceased to be Company’s CEO and Dandan Liu was appointed as the CEO in his stead. TDH Japan has been deregistered and dissolved in February 2021. As of the date of this filing, TDH Group BVBA is currently under bankruptcy proceeding. 22 On April 22, 2002 Tiandihui was incorporated in Qingdao City, PRC.
Effective August 2, 2019, Rongfeng Cui ceased to be Company’s CEO and Dandan Liu was appointed as the CEO in his stead. TDH Japan has been deregistered and dissolved in February 2021. As of the date of this filing, TDH Group BVBA is currently under bankruptcy proceeding. On April 22, 2002 Tiandihui was incorporated in Qingdao City, PRC.
In connection with the foregoing transactions the Company executed Share Sale and Purchase Agreements (together, the “Agreements”) pursuant to which the Company agreed to pay approximately USD$ 936,782 and USD $156,130 (RMB 6 million and RMB 1 million), respectively, to acquire all of outstanding securities of TDH Group BVBA and TDH JAPAN, respectively, from the sole shareholder of each entity, Rongfeng Cui, the Company’s former CEO.
In connection with the foregoing transactions the Company executed Share Sale and Purchase Agreements (together, the “Agreements”) pursuant to which the Company agreed to pay approximately USD$ 936,782 and USD $156,130 (RMB 6 million and RMB 1 million), respectively, to acquire all of outstanding securities of TDH Group BVBA and TDH JAPAN, respectively, from the sole shareholder of each entity, Rongfeng Cui, the Company’s former CEO.
The purchase consideration under the Agreements was paid by issuance of 936,782 and 156,130 restricted common shares of the Company, respectively. Rongfeng Cui incorporated TDH Group BVBA in 2012 and TDH JAPAN in 2017 to develop and maintain all the clients in Europe and Japan, and to distribute and expand product sales in European and Japanese markets.
The purchase consideration under the Agreements was paid by issuance of 936,782 and 156,130 restricted common shares of the Company, respectively. Rongfeng Cui incorporated TDH Group BVBA in 2012 and TDH JAPAN in 2017 to develop and maintain all the clients in Europe and Japan, and to distribute and expand product sales in European and Japanese markets.
TDH HK, in turn, owns all of the outstanding capital stock of Tiandihui, our operating subsidiary based in Qingdao City, Shandong Province, China, incorporated in April 2002 as a PRC limited liability company Tiandihui. TDH Foods Limited owns 100% of the outstanding capital stock of Qingdao Pet Foodstuffs, with its wholly-owned subsidiary of Tiandihui Foodstuffs Sales.
TDH HK, in turn, owned all of the outstanding capital stock of Tiandihui, our former operating subsidiary based in Qingdao City, Shandong Province, China, incorporated in April 2002 as a PRC limited liability company Tiandihui. TDH Foods Limited owns 100% of the outstanding capital stock of Qingdao Pet Foodstuffs, with its wholly-owned subsidiary of Tiandihui Foodstuffs Sales.
TDH Japan has been deregistered and dissolved in February 2021. As of the date of this filing, TDH Group BVBA is currently under bankruptcy proceeding. 28 Intellectual Property The PRC has domestic laws for the protection of rights in copyrights, patents, trademarks and trade secrets.
TDH Japan has been deregistered and dissolved in February 2021. As of the date of this filing, TDH Group BVBA is currently under bankruptcy proceeding. Intellectual Property The PRC has domestic laws for the protection of rights in copyrights, patents, trademarks and trade secrets.
The following chart reflects our organizational structure as of the filling date: On September 20, 2018, the Board has approved acquisitions by the Company of TDH Group BVBA, a company established under the laws of Belgium and TDH JAPAN, a company established under the laws of Japan.
The following chart reflects our organizational structure as of the filling date: On September 20, 2018, the Board approved acquisitions by the Company of TDH Group BVBA, a company established under the laws of Belgium and TDH JAPAN, a company established under the laws of Japan.
We priced our products to be accessible to the average consumer. 25 Due to the sharp rise in market price of raw materials, the lack of operational efficiency of our production facilities and our inability to make bank loan repayments upon maturity, we suspended our production and normal business operations and we were involved in certain legal proceedings beginning in November 2019.
We priced our products to be accessible to the average consumer. 30 Due to the sharp rise in market price of raw materials, the lack of operational efficiency of our production facilities and our inability to make bank loan repayments upon maturity, we suspended our production and normal business operations and we were involved in certain legal proceedings beginning in November 2019.
For the year ended December 31, 2023, we provided working capital loans of $0 million in aggregate to our subsidiaries. We have not declared or paid any cash dividends, nor do we have any present plan to pay any cash dividends on our common shares in the foreseeable future.
For the year ended December 31, 2024 and 2023, we provided working capital loans of $0 million and $0 million in aggregate to our subsidiaries. We have not declared or paid any cash dividends, nor do we have any present plan to pay any cash dividends on our common shares in the foreseeable future.
As a result, Tiandihui has been fully disposed as of December 31, 2023. On July 19, 2016, Tiandihui acquired 100% shares of Chongai Jiujiu from Rongfeng Cui and Yanjuan Wang for $87,849 (RMB 610,000). The acquisition of Chongai Jiujiu was a transaction between entities under common control. Chongai Jiujiu had immaterial operations and suffered recurring operating losses since its inception.
As a result, Tiandihui was fully disposed as of December 31, 2023. 25 On July 19, 2016, Tiandihui acquired 100% shares of Chongai Jiujiu from Rongfeng Cui and Yanjuan Wang for $87,849 (RMB 610,000). The acquisition of Chongai Jiujiu was a transaction between entities under common control. Chongai Jiujiu had immaterial operations and suffered recurring operating losses since its inception.
If we are unable to receive funds from our subsidiaries, we may be unable to pay cash dividends on our common shares. 24 Cash dividends, if any, on our common shares will be paid in U.S. dollars.
If we are unable to receive funds from our subsidiaries, we may be unable to pay cash dividends on our common shares. 27 Cash dividends, if any, on our common shares will be paid in U.S. dollars.
Our primary trademark portfolio consists of 15 registered trademarks relating to petfood and manufacturing, we do not currently have any patents related to our restaurant business. Properties Under Chinese law, all of the land in China is either state-owned or collectively-owned, depending on its location and the specific laws governing such land.
We do not currently have any patents related to our commercial real estate business. 33 Properties Under Chinese law, all of the land in China is either state-owned or collectively-owned, depending on its location and the specific laws governing such land.
On October 31, 2021, TDH Income Corporation acquired 100% equity interests of Bo Ling’s Chinese Restaurant, Inc. On January 22, 2022, Beijing Wenxin was incorporated in Beijing City, PRC. On March 27, 2023, Qingdao Chihong was incorporated in Qingdao City, PRC.
On October 31, 2021, TDH Income Corporation acquired 100% equity interests of Bo Ling’s Chinese Restaurant, Inc. In June 2024, the Company sold all its ownership interests in Far Ling’s Inc and Bo Ling’s Chinese Restaurant, Inc to third parties. On January 22, 2022, Beijing Wenxin was incorporated in Beijing City, PRC.
With the exception of Bo Lings’ employees, all of our employees are located in Beijing and Shandong Province, PRC. Our History and Corporate Structure We are a holding company incorporated in the British Virgin Islands (incorporated on September 30, 2015) that owns all of the outstanding capital stock of TDH HK Limited, our wholly-owned Hong Kong subsidiary (TDH HK).
Our hiring practices do not, and have not, included quotas or numerical targets based on any of these characteristics. Our History and Corporate Structure We are a holding company incorporated in the British Virgin Islands (incorporated on September 30, 2015) that owns all of the outstanding capital stock of TDH HK Limited, our wholly-owned Hong Kong subsidiary (TDH HK).
On September 20, 2018, the Board approved acquisitions by the Company of TDH Group BVBA, a company established under the laws of Belgium and TDH JAPAN, a company established under the laws of Japan.
On November 15, 2024, Beijing Ruihe Space Commercial Management Co., Ltd. was incorporated in Beijing City, PRC. On September 20, 2018, the Board approved acquisitions by the Company of TDH Group BVBA, a company established under the laws of Belgium and TDH JAPAN, a company established under the laws of Japan.
On June 9, 2021, Ruby21Noland LLC (“Ruby21Noland”) was incorporated in Missouri. Ruby21Noland is a wholly owned subsidiary of TDH Income. On October 31, 2021, TDH Income Corporation acquired 51% equity interests of Far Ling’s Inc. On October 31, 2021, TDH Income Corporation acquired 100% equity interests of Bo Ling’s Chinese Restaurant, Inc. On January 22, 2022, Beijing Wenxin Co., Ltd.
On June 9, 2021, Ruby21Noland LLC (“Ruby21Noland”) was incorporated in Missouri. Ruby21Noland is a wholly owned subsidiary of TDH Income. On October 31, 2021, TDH Income Corporation acquired 51% equity interests of Far Ling’s Inc. In June 2024, the Company transferred all its ownership interests in Far Ling’s Inc to a third party.
If we use our equity interest to purchase the assets or equity interest of a PRC company owned by PRC residents in the future, such PRC residents will be subject to the registration procedures described in Circular 37. 30 New M&A Regulations and Overseas Listings On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Administration for Taxation, the State Administration for Industry and Commerce, China Security Regulation Commission (CSRC) and SAFE, jointly issued the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&A Rule, which became effective on September 8, 2006 and was amended on June 22, 2009.
On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the SAT, the SAIC, the China Securities Regulatory Commission, or CSRC, and the SAFE, jointly issued the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors , or the M&A Rules, which became effective on September 8, 2006 and was amended on June 22, 2009.
Cash Flows through Our Organization We are a holding company with no operations of its own. We conduct our operations principally in the United States and China through our subsidiaries. As a result, we may rely upon dividends paid to us by our subsidiaries in the PRC to pay dividends and to finance any debt we may incur.
Cash Flows through Our Organization We are a holding company with no operations of its own. We conduct our operations principally in the United States and China through our subsidiaries. Our subsidiaries in the PRC generate and retain cash generated from operating activities and re-invest it in our business.
Business Overview Special Considerations Implications of the HFCA Act We are not a Chinese operating company but a British Virgin Islands holding company with operations conducted by our subsidiaries established in Missouri, Nevada, PRC, Belgium, and Hong Kong.
We believe this pivot to the commercial real estate management business line is in the best interests of our shareholders due to high costs we were experiencing in the restaurant segment business line, and the Company believes it can obtain stable revenue from rental income and property appreciation income from the increasing demand in the commercial real estate market from small and medium sized enterprises. 26 Business Overview Special Considerations Implications of the HFCA Act We are not a Chinese operating company but a British Virgin Islands holding company with operations conducted by our subsidiaries established in Missouri, Nevada, PRC, Belgium, and Hong Kong.
As a result, Tiandihui has been fully disposed as of December 31, 2023. Restaurant Segment On October 31, 2021, the Company completed the acquisition of 51% equity interests of Far Ling’s Inc. and 100% equity interests of Bo Ling’s Chinese Restaurant, Inc. The acquisition brought a new revenue source for the Company.
This resulted in an increase of $3.1 million and $3.2 million in restaurant food service revenue for the years ended December 31, 2022 and 2023, respectively On October 31, 2021, the Company completed the acquisition of 51% equity interests of Far Ling’s Inc. and 100% equity interests of Bo Ling’s Chinese Restaurant, Inc.
We have not installed any cash management policies that dictate the amount of such funds and how such funds are transferred. Overview Petfood Manufacturing We started our company in 2002 in Qingdao, Shandong Province, PRC with a single mission of becoming a producer of high-quality petfood for pet owners in China and worldwide.
We have not installed any cash management policies that dictate the amount of such funds and how such funds are transferred. Permissions Required from the PRC Authorities for Our Operations We conduct some of our business in China through our PRC subsidiaries established under PRC law.
(“Beijing Wenxin”) was incorporated in Beijing City, PRC. On March 27, 2023, Qingdao Chihong Information Consulting Co., Ltd. (“Qingdao Chihong”) was incorporated in Qingdao City, PRC. Recent Developments Discontinued operations We discontinued our petfood manufacturing segment during the first quarter of 2023.
On November 1, 2024, TDH Holdings, Inc. acquired 90% equity interests of Beijing Ruihe Commercial Management Co., Ltd. On November 15, 2024, Beijing Ruihe Space Commercial Management Co., Ltd. was incorporated in Beijing City, PRC. Recent Developments Discontinued operations We discontinued our restaurant business segment during the second quarter of 2024.
Removed
Our decision to discontinue our petfood business was driven largely by the following factors: the increase in cost of raw materials required for production; accepting less orders in an attempt to avoid unprofitable orders and customers; decreased demand for sales of petfood; its historical performance and expected business forecasts in the absence of further capital investments and opportunity costs; lawsuits and the closing of our manufacturing facilities and them being subject to bankruptcy proceedings.
Added
On October 31, 2021, TDH Income Corporation acquired 100% equity interests of Bo Ling’s Chinese Restaurant, Inc. In June 2024, the Company transferred all its ownership interests in Bo Ling’s Chinese Restaurant, Inc to a third party. On January 22, 2022, Beijing Wenxin Co., Ltd. (“Beijing Wenxin”) was incorporated in Beijing City, PRC.
Removed
We believe the discontinuation of our petfood manufacturing business will provide us with the opportunity to redirect our focus and resources towards expanding and improving our restaurant segment. 23 On December 27, 2023, the court announced that the bankruptcy property distribution plan of Tiandihui was implemented and the bankruptcy proceedings were completed.
Added
On March 27, 2023, Qingdao Chihong Information Consulting Co., Ltd. (“Qingdao Chihong”) was incorporated in Qingdao City, PRC. On April 30, 2024, Beijing Wenxin Co., Ltd. acquired 60% equity interests of Beijing Jingshi Commercial Management Co., Ltd. On May 14, 2024, HARDEES2470 LLC (“HARDEES2470”) was incorporated in Missouri. HARDEES2470 is a wholly owned subsidiary of TDH Income.
Removed
Due to the completion of Tiandihui’s bankruptcy proceedings, all the claims against it were concluded. As a result, Tiandihui has been fully disposed as of December 31, 2023, and all the material claims against Tiandihui that arose prior to the date of the bankruptcy completion were addressed.
Added
On November 1, 2024, TDH Holdings, Inc. acquired 90% equity interests of Vigour Management Limited. On April 30, 2024, Beijing Wenxin Co., Ltd. acquired 60% equity interests of Beijing Jingshi Space Commercial Management Co., Ltd. On November 1, 2024, TDH Holdings, Inc. acquired 90% equity interests of Hengzhuo Investment Limited.
Removed
As of the date of this report, none of our subsidiaries has issued any dividends or distributions to us and we have not made any dividends or distributions to our shareholders. Our subsidiaries in the PRC generate and retain cash generated from operating activities and re-invest it in our business.
Added
The Company now focuses on the commercial real estate managment.
Removed
This resulted in an increase of $3.1 million and $3.2 million in restaurant food service revenue for the years ended December 31, 2022 and 2023, respectively. In addition, we decided to discontinue our petfood manufacturing business segment in the first quarter of 2023 due to the above operational challenges and to focus on our restaurant segment.
Added
We are required to obtain certain permissions from the PRC authorities to operate, issue securities to foreign investors, and transfer certain data. The PRC government has exercised, and may continue to exercise, substantial influence or control over virtually every sector of the Chinese economy through regulation and state ownership.
Removed
On March 16, 2022, the People’s Court of Huangdao District, Qingdao City, Shandong Province made a civil ruling and announced the acceptance of creditors’ application of bankruptcy liquidation of Tiandihui, and it entered into bankruptcy proceedings.
Added
Our ability to operate in China may be undermined if our PRC subsidiaries are not able to obtain or maintain approvals to operate in China. The central or local governments could impose new, stricter regulations or interpretations of existing regulations that could require additional expenditures, and efforts on our part to ensure our compliance with such regulations or interpretations.
Removed
On November 3, 2023, our remaining pet food manufacturing facility was auctioned by the court for $875,321 (RMB 6.28 million) to pay off bankruptcy debts. On December 27, 2023, the Court announced that the bankruptcy property distribution plan of Tiandihui was implemented and the bankruptcy proceedings were completed.
Added
To operate our general business activities currently conducted in mainland China, each of our PRC subsidiaries is required to obtain a business license from the local counterpart of the State Administration for Market Regulation, or SAMR.
Removed
Bo Lings Chinese Restaurant, which was founded by Richard (Bo) and Far Ling (Ling) Ng, husband and wife, in 1981. Today there are 5 Bo Lings Chinese Restaurants in the Kansas City area, as well as a warehouse for distribution of supplies.
Added
Each of our PRC subsidiaries has obtained a valid business license from the local SAMR, and no application for any such license has been denied. Our PRC subsidiaries are also required to obtain certain licenses and permits.
Removed
All Bo Lings restaurants are full service that include a dining area, bar, carry out menu and offer catering services. The location we purchased is in Kansas City and offers a full Cantonese Dim Sum menu and space for banquets. Most of the menu items are prepared onsite in the kitchen and cooked to order.
Added
As of the date of this report, we and our PRC subsidiaries have received all requisite permits, approvals and certificates from the PRC government authorities to conduct our business operations in China. To our knowledge, no permission or approval has been denied or revoked.
Removed
Business is managed by Richard and Far Ling with a team of employees in each restaurant, including bookkeepers, a marketing manager and a purchasing director. Over the years, we believe Bo Lings has built a reputation as one of the best Chinese restaurants in the Kansas City area.
Added
However, given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by government authorities, we cannot be certain that relevant policies in this regard will not change in the future, which may require us or our PRC subsidiaries to obtain additional licenses, permits, filings or approvals for conducting our business in the PRC.
Removed
Currently, no other Chinese Restaurant has 2 or more restaurants in our area.
Added
If we or our PRC subsidiaries do not receive or maintain required permissions or approvals, or inadvertently conclude that such permissions or approvals are not required, we may be subject to governmental investigations or enforcement actions, fines, penalties, suspension of operations, or be prohibited from engaging in relevant business or conducting securities offering, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. 28 In connection with our previous issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, we and our PRC subsidiaries, (i) are not required to obtain permissions from the CSRC, (ii) are not required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, and (iii) have not received or were denied such requisite permissions by any PRC authority.
Removed
Business Strategy Our Growth agenda is based on four key drivers: ● Culture and Talent: Leverage our culture and people capability to fuel brand performance and franchise success; ● Operating Capability: Recruit and equip high-quality restaurant operators to deliver great customer experiences; ● Strategically optimize our restaurant portfolio and pursue high quality assets and acquisitions: We aim to prudently pursue investments in high-quality assets.
Added
However, the PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. On July 10, 2021, the CAC published a revised draft revision to the Cybersecurity Review Measures for public comment, or the Revised Cybersecurity Measures.
Removed
Our investment strategy primarily focuses on, restaurant brands with excellent growth potential and synergy, and related business such as catering and events. We continue to identify and evaluate investment opportunities in high-quality brands to capture growth opportunities.
Added
Under these measures, an operator having more than one million users shall be subject to cybersecurity review before listing abroad. The cybersecurity review will evaluate the risk of critical information infrastructure, core data, important data, or a large amount of personal information being influenced, controlled or maliciously used by foreign governments after going public overseas.
Removed
We will prudently assess investment targets based on each candidate’s strategic value, brand equity, business scale and financial performance, among other factors; and ● Menu Innovations: Offering appealing, tasty and convenient food at great prices is our value proposition.
Added
The procurement of network products and services, data processing activities and overseas listing should also be subject to cybersecurity review if they concern or potentially pose risks to national security.
Removed
We focus on the development and innovation of new recipes and improvement of existing products. 26 Operating Strategy Our operating strategy is built on the following key components: ● Offering high quality, freshly prepared food: We place a great deal of emphasis on providing our guests with high quality, freshly prepared food.
Added
According to the effective Cybersecurity Review Measures, online platform/website operators of certain industries may be identified as critical information infrastructure operators by the CAC, once they meet standard as stated in the National Cybersecurity Inspection Operation Guide, and such operators may be subject to cybersecurity review.
Removed
As part of our process, we have developed proprietary recipes to provide consistency in quality and taste.
Added
On December 28, 2021, the CAC, the National Development and Reform Commission (“NDRC”), and other government agencies jointly issued the final version of the Revised Measures for Cybersecurity Review, or the Measures, which took effect on February 15, 2022 and replaced the previously issued Revised Cybersecurity Review Measures.
Removed
We expect our employees to inspect every entrée before it leaves the kitchen to confirm it matches the guest’s order and meets our standards for quality, portion size, appearance and presentation; ● Creating a comfortable atmosphere with a focus on high quality service: We believe the service quality and atmosphere we establish is a key component for fostering repeat business.
Added
Under the Measures, an “online platform operator” in possession of personal data of more than one million users must apply for a cybersecurity review if it intends to list its securities on a foreign stock exchange.
Removed
We focus on keeping our table-to-server ratios low to allow our servers to truly focus on their guests and serve their needs in a personal, individualized manner.
Added
The operators of critical information infrastructure and the online platform operators (collectively, the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, and any online platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country.
Removed
In addition, Bo Lings features a modern design; and ● Offering attractive price points: When we evaluate menu pricing, we focus on remaining disciplined as we balance short-term pressures with long-term growth while always keeping our guest top of mind.
Added
Pursuant to the Measures, we believe we are not subject to the cybersecurity review by the CAC, given that (i) we possess personal information of a relatively small number of users in our business operations as of the date of this report, significantly less than one million users; and (ii) data processed in our business does not have a bearing on national security and thus shall not be classified as core or important data by the PRC authorities.
Removed
Prices are reviewed and are offered at moderate price points that we believe are as low as or lower than those offered by our competitors without sacrificing food quality. Within each menu category, we offer a choice of several price points with the goal of fulfilling each guest’s budget and value expectations.
Added
We don’t believe that we are an Operator within the meaning of the Measures, nor do we control more than one million users’ personal information, and as such, we should not be required to apply for a cybersecurity review under the Revised Measures.
Removed
Based on the results of our pricing evaluations, we will continue to take pricing actions as we feel are needed. Marketing Our marketing strategy aims to promote our brands while retaining a localized focus.
Added
Further, an expert interpretation of the Measures published at the CAC’s website on February 17, 2022 indicated no application review is required for operators that have been listed abroad before the implementation of the Revised Cybersecurity Measures.
Removed
We strive to increase restaurant sales by increasing the frequency of visits by our current guests and attracting new guests at Bo Lings and also by communicating and promoting our food quality, the guest experience and value. We accomplish these objectives through three major initiatives. Local Restaurant Marketing.
Added
However, the Measures were just recently released and there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation.
Removed
Given our strategy to be a neighborhood destination, local restaurant marketing is integral in developing brand awareness in each market. In-restaurant Marketing. A significant portion of our marketing is spent communicating with our guests inside our restaurants through point of purchase materials. Advertising. We do not rely on national television or print advertising to promote our brands.
Added
Whether the data processing activities carried out by traditional enterprises (such as food, medicine, manufacturing, and merchandise sales enterprises) are subject to such review and the scope of the review remain to be further clarified by the regulatory authorities in the subsequent implementation process.
Removed
Earned local media is a critical part of our strategy that features our products and people. We use mailing lists, social media and digital marketing, to promote the brand and engage with our guests. Additionally, we continue to look for ways through various strategic initiatives to drive awareness and guest engagement with our brands.
Added
The PRC government recently initiated a series of regulatory actions and statements to regulate business operations in China, including adopting new measures to extend the scope of cybersecurity reviews, cracking down on illegal activities in the securities market, and expanding the efforts in anti-monopoly enforcement. The PRC government is increasingly focused on data security.
Removed
Supply and Distribution Bo Lings purchases a number of food and paper products, equipment and other restaurant supplies. The principal items purchased include chicken, cheese, beef and pork products, paper and packaging materials. Prices paid for these supplies fluctuate.
Added
In July 2021, the CAC opened cybersecurity probes into several U.S.-listed technology companies focusing on anti-monopoly regulation, and how companies collect, store, process and transfer data.
Removed
When prices increase, Bo Lings may attempt to pass on such increases to its customers, although there is no assurance that this can be done in practice.
Added
On November 14, 2021, the CAC published the Draft Regulations on Network Data Security Management for public comments, which among other things, stipulates that a data processor listed overseas must conduct an annual data security review by itself or by engaging a data security service provider and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 of the following year.
Removed
Bo Lings does not typically experience significant continuous shortages of supplies, and alternative sources for most of these supplies are generally available. 27 Seasonal Operations Bo Lings does not consider its operations to be seasonal to any material degree. Competition Competition in the restaurant industry is intense.
Added
If the Draft Regulations on Network Data Security Management are enacted in the current form, we, as an overseas listed company, would be required to carry out an annual data security review and comply with the relevant reporting obligations.
Removed
We compete with well-established food service companies on the basis of taste, quality and price of the food offered, service, atmosphere, location, take-out and delivery options as well as the overall dining experience.
Added
As of the date of this report, the draft regulations have been released for public comment only and have not been formally adopted. The final provisions and the timeline for its adoption are subject to changes and uncertainties.
Removed
Our competitors include a large and diverse group of restaurant chains and individual restaurants that range from independent local operators that have opened restaurants in various markets to well-capitalized national restaurant chains. We also face competition from meal kit delivery services as well as the supermarket industry.
Added
We have been closely monitoring the regulatory development in China, particularly regarding the requirements of approvals, annual data security review or other procedures that may be imposed on us.
Removed
In addition, improving product offerings of fast casual and quick-service restaurants and better execution of to-go sales, together with negative economic conditions could cause consumers to choose less expensive alternatives.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

112 edited+52 added−81 removed66 unchanged
Due to the sharp rise in market price of raw materials, the lack of operational efficiency of our production facilities and our inability to make bank loan repayments upon maturity, we suspended our production and normal business operations and we were involved in certain legal proceedings beginning in November 2019.
Due to the sharp rise in market price of raw materials, the lack of operational efficiency of our production facilities and our inability to make bank loan repayments upon maturity, we suspended our production and normal business operations and we were involved in certain legal proceedings beginning in November 2019.
Revenue is recognized net of any taxes collected from customers that are subsequently remitted to governmental authorities, including value-added tax (“VAT”), business tax, applicable local government levies. At the time revenue is recognized, allowances are recorded, with the related reduction to revenue, for estimated sales returns based upon historical experience and related terms of customer arrangements.
Revenue is recognized net of any taxes collected from customers that are subsequently remitted to governmental authorities, including value-added tax (“VAT”), business tax, and applicable local government levies. At the time revenue is recognized, allowances are recorded, with the related reduction to revenue, for estimated sales returns based upon historical experience and related terms of customer arrangements.
The availability of these other sources of financing will depend upon our financial condition and results of operations as well as prevailing market conditions, and may not be available on terms reasonably acceptable to us or at all. 44 Regulatory Restrictions on Capital Injections We used proceeds from our initial public offering and subsequent offerings to fund our business.
The availability of these other sources of financing will depend upon our financial condition and results of operations as well as prevailing market conditions and may not be available on terms reasonably acceptable to us or at all. Regulatory Restrictions on Capital Injections We used proceeds from our initial public offering and subsequent offerings to fund our business.
TDH HK, in turn, owns all of the outstanding capital stock of Tiandihui, our operating subsidiary based in Qingdao City, Shandong Province, China, incorporated in April 2002 as a PRC limited liability company. TDH Foods Limited owns 100% of the outstanding capital stock of Tiandihui Pet Foodstuffs, with its wholly-owned subsidiary of Qingdao Foodstuff Sales Co., Ltd.
TDH HK, in turn, owns all of the outstanding capital stock of Tiandihui, our former operating subsidiary based in Qingdao City, Shandong Province, China, incorporated in April 2002 as a PRC limited liability company. TDH Foods Limited owns 100% of the outstanding capital stock of Tiandihui Pet Foodstuffs, with its wholly-owned subsidiary of Qingdao Foodstuff Sales Co., Ltd.
Net cash used in investing activities for the year ended December 31, 2023 totaled $6,067,051 from our continuing operations, primarily include purchase of short-term investments of $37,066,925 and proceeds from sale of short-term investments of $31,024,365. There was no cash used in our discontinued operations during the year ended December 31, 2023.
There was no cash used in our discontinued operations during the year ended December 31, 2024. Net cash used in investing activities for the year ended December 31, 2023 totaled $6,067,051 from our continuing operations, primarily include purchase of short-term investments of $37,066,925 and proceeds from sale of short-term investments of $31,024,365.
During the year ended December 31, 2023, our cash used in operating activities was $2,492,725, cash used in investing activities was $6,067,051, cash provided by financing activities was $1,921,554, and had the negative effect of prevailing exchange rates on our cash of $1,557,521.
During the year ended December 31, 2023, our cash used in operating activities was $2,492,725, cash used in investing activities was $6,067,051, and cash provided by financing activities was $1,921,554, and the negative effect of prevailing exchange rates on our cash was $1,557,521.
During the year ended December 31, 2022, our cash used in operating activities was $2,072,715, cash used in investing activities was $1,332,827, cash provided by financing activities was $6,055,480, and had the positive effect of prevailing exchange rates on our cash of $985,263.
During the year ended December 31, 2022, our cash used in operating activities was $2,072,715, cash used in investing activities was $1,332,827, and cash provided by financing activities was $6,055,480, and the positive effect of prevailing exchange rates on our cash was $985,263.
The balance of due to related parties represented expenses incurred by related parties in the ordinary course of business, expense paid by related parties on behalf of the Company as well as the loans the Company obtained from related parties for working capital purpose. The loans owed to the related parties are interest free, unsecured and repayable on demand.
The balance of due to related parties represented expenses incurred by related parties in the ordinary course of business, expenses paid by related parties on behalf of the Company as well as the loans the Company obtained from related parties for working capital purpose. The loans owed to the related parties are interest free, unsecured and repayable on demand.
We rely heavily on the expertise and leadership of our senior management to maintain our core competence. The loss of the service of any of our key personnel could adversely affect our business. 35 Macro-economic conditions.
We rely heavily on the expertise and leadership of our senior management to maintain our core competence. The loss of the service of any of our key personnel could adversely affect our business. Macro-economic conditions.
We account for income taxes under the provisions of Section 740-10-30 of the FASB Accounting Standards Codification, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or tax returns. 36 The following factors affect our cost of revenues and expense.
We account for income taxes under the provisions of Section 740-10-30 of the FASB Accounting Standards Codification, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or tax returns. 46 The following factors affect our cost of revenues and expense.
We conduct some of our business through Tiandihui Pet Foodstuff and Tiandihui Foodstuff Sales which has one wholly-owned subsidiary: Beijing Chongai Jiujiu Cultural Communication Co., Ltd. (incorporated on March 3, 2011). TDH Income Corporation owns 100% of the outstanding capital stock of Ruby21Noland LLC. Ruby21Noland LLC was incorporated in the State of Missouri on June 9, 2021.
We conducted some of our business through Tiandihui Pet Foodstuff and Tiandihui Foodstuff Sales which has one wholly-owned subsidiary: Beijing Chongai Jiujiu Cultural Communication Co., Ltd. (incorporated on March 3, 2011). TDH Income Corporation owns 100% of the outstanding capital stock of Ruby21Noland LLC. Ruby21Noland LLC was incorporated in the State of Missouri on June 9, 2021.
Most of our oversea sales are denominated in US dollars, for which our oversea sales are exempted from the risk of foreign currency fluctuation. We have not had any foreign currency investments hedged by currency borrowings or other hedging instruments. We manage our price risks through productivity improvements and cost-containment measures 54
Most of our oversea sales are denominated in US dollars, for which our oversea sales are exempted from the risk of foreign currency fluctuation. We have not had any foreign currency investments hedged by currency borrowings or other hedging instruments. We manage our price risks through productivity improvements and cost-containment measures. 63
The Company does not have finance lease arrangements as of December 31, 2023 and 2022. Loss Contingencies The Company records accruals for certain of its outstanding legal proceedings or claims when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated.
The Company does not have finance lease arrangements as of December 31, 2024 and 2023. Loss Contingencies The Company records accruals for certain of its outstanding legal proceedings or claims when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated.
The information on our website is not part of this Annual Report. 32 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this annual filing.
The information on our website is not part of this Annual Report. 44 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this annual filing.
Although we resumed our operations in May 2020 factors including the COVID-19 pandemic, the increase in cost of raw materials required for production; accepting less orders in an attempt to avoid unprofitable orders and customers; and decreased demand for sales of petfood, led to a decrease in our petfood revenue from $0.47 million in 2021, to $0.02 million in 2022 and to only $0 million in 2023.
Although we resumed our operations in May 2020 factors including the Covid-19 pandemic, the increase in cost of raw materials required for production; accepting less orders in an attempt to avoid unprofitable orders and customers; and decreased demand for sales of petfood, led to a decrease in our petfood revenue from $0.02 million in 2022 and to $0 million in 2023.
Accordingly, the following regulations have to be followed, regarding capital injections to foreign-invested enterprises. Chinese regulations relating to investments in offshore companies by Chinese residents . SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Financing and Round-trip Investment through Offshore Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014.
Accordingly, the following regulations regarding capital injections to foreign-invested enterprises must be followed. 54 Chinese regulations relating to investments in offshore companies by Chinese residents . SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Financing and Round-trip Investment through Offshore Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014.
Selling, general and administrative expenses consist primarily of compensation expense for our corporate staff in supporting departments, communication costs, gasoline, shipping and handling cost, welfare expenses, education expenses, professional fees (including consulting, audit and legal fees), travel and business hospitality expenses. Income tax expense.
Selling, general and administrative expenses consist primarily of compensation expense for our corporate staff in supporting departments, communication costs, gasoline, welfare expenses, education expenses, professional fees (including consulting, audit and legal fees), travel and business hospitality expenses. Income tax expense.
There can be no assurance these strategies will be effective, and some strategies may be effective at improving some metrics while adversely affecting other metrics, which could have the overall effect of harming our business. Loss of key personnel. Our revenue was derived from our competitive advantages in our products.
There can be no assurance our strategies in making our properties desirable will be effective, and some strategies may be effective at improving some metrics while adversely affecting other metrics, which could have the overall effect of harming our business. Loss of key personnel. Our revenue was derived from our competitive advantages in our products.
An off-balance sheet arrangement means a transaction, agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have: ● Any obligation under certain guarantee contracts, ● Any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets, ● Any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in shareholder equity in our statement of financial position, and ● Any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us. 49 We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations.
An off-balance sheet arrangement means a transaction, agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have: ● Any obligation under certain guarantee contracts, ● Any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets, ● Any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in shareholder equity in our statement of financial position, and ● Any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us.
Dollars for the purpose of preparing the consolidated financial statements were as follows (USD$1=€): Period Covered Balance Sheet Date Rate Average Rate Year ended December 31, 2023 0.9012 0.9153 Year ended December 31, 2022 0.9383 0.9485 52 Fair Value of Financial Instruments Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Dollars for the purpose of preparing the consolidated financial statements were as follows (USD$1=€): Period Covered Balance Sheet Date Rate Average Rate Year ended December 31, 2024 0.9552 0.9503 Year ended December 31, 2023 0.9012 0.9153 Fair Value of Financial Instruments Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
If we are not able to effectively manage and acquire new restaurants that successfully generate revenue, we may not be able to grow and maintain our business as anticipated, and our sales may decline and our future business, financial condition and results of operations may be materially adversely affected.
If we are not able to effectively manage, lease and acquire new properties that successfully generate revenue, we may not be able to grow and maintain our business as anticipated, and our revenue may decline and our future business, financial condition and results of operations may be materially adversely affected.
Our operations are in China and China’s inflation rates have been relatively stable in the last three years: 2.6% in 2023, 3.7% in 2022, and 1.1% in 2021. Impact of Foreign Currency Fluctuations We do not believe the impact of foreign currency fluctuations on our Company is material.
Our operations are in China, and China’s inflation rates have been relatively stable in the last three years: 0.8% in 2024, 2.6% in 2023 and 3.7% in 2022 Impact of Foreign Currency Fluctuations We do not believe the impact of foreign currency fluctuations on our Company is material.
The Company recorded impairment loss on long-lived assets other than goodwill of $1,954, $6,833 and $217,257 and for the years ended December 31, 2023, 2022 and 2021, respectively. The Company’s goodwill is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.
The Company recorded impairment loss on long-lived assets other than goodwill of $0, $1,964 and $6,833 for the years ended December 31, 2024, 2023 and 2022, respectively. The Company’s goodwill is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.
The following table displays our revenue from our continuing operations by different marketing channels.
The following table displays our revenues from our continuing operations by different marketing channels.
Dollars for the purpose of preparing the consolidated financial statements were as follows (USD$1=RMB): Period Covered Balance Sheet Date Rates Average Rates Year ended December 31, 2023 7.0827 7.0467 Year ended December 31, 2022 6.9646 6.7261 The exchange rates used to translate amounts in Euro into U.S.
Dollars for the purpose of preparing the consolidated financial statements were as follows (USD$1=RMB): Period Covered Balance Sheet Date Rates Average Rates Year ended December 31, 2024 7.1884 7.1217 Year ended December 31, 2023 7.0827 7.0467 The exchange rates used to translate amounts in Euro into U.S.
Net cash used in investing activities for the year ended December 31, 2022 totaled $1,332,827 from our continuing operations, primarily include purchase of short-term investments of $45,418,240 and proceeds from sale of short-term investments of $41,150,967. There was no cash used in our discontinued operations during the year ended December 31, 2022.
There was no cash used in our discontinued operations during the year ended December 31, 2023. Net cash used in investing activities for the year ended December 31, 2022 totaled $1,332,827 from our continuing operations, primarily include purchase of short-term investments of $42,483,794 and proceeds from sale of short-term investments of $41,150,967.
For the subsidiaries whose functional currencies are RMB, Euro and Yen, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates.
The functional currency of TDH Group BVBA is Euro (“€”). For the subsidiaries whose functional currencies are RMB and Euro, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates.
We expect our environment to continue to be highly competitive, and our results in any particular reporting period may be impacted by a contracting IEO segment or by new or continuing actions, product offerings or consolidation of our competitors and third-party partners, which may have a short-term or long-term impact on our results.
We expect our environment to continue to be highly competitive, and our results in any particular reporting period may be impacted by a contracting commercial real estate market or by new or continuing actions, property offerings or consolidation of our competitors and third-party partners, which may have a short-term or long-term impact on our results.
The loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. The Company recorded impairment of goodwill of $0, $0, and $355,570 for the years ended December 31, 2023, 2022 and 2021, respectively.
The loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit. The Company recorded impairment of goodwill of $325,832, $0 and $0 for the years ended December 31, 2024, 2023 and 2022, respectively.
In assessing our liquidity, management monitors and analyzes our cash and cash equivalent, our ability to generate sufficient revenue sources in the future, and our operating and capital expenditure commitments. As of December 31, 2023, we had cash and cash equivalent of approximately $13.66 million.
In assessing our liquidity, management monitors and analyzes our cash and cash equivalent, our ability to generate sufficient revenue sources in the future, and our operating and capital expenditure commitments. As of December 31, 2024, we had cash and cash equivalents of approximately $15.70 million.
There was no cash used in our discontinued operations during the year ended December 31, 2022. For the year ended December 31, 2023, net cash provided by financing activities from continuing operations was $1,921,554, of which borrowing from related parties amounted to $1,928,329 and repayments to related parties of $6,774.
For the year ended December 31, 2023, net cash provided by financing activities from continuing operations was $1,921,554, of which borrowing from related parties amounted to $1,928,329 and repayments to related parties of $6,774.
Significant estimates and assumptions by management include, among others, useful lives and impairment of long-lived assets, allowance for credit losses, write-down in value of inventories and income taxes including the valuation allowance for deferred tax assets.
Significant estimates and assumptions by management include, among others, useful lives and impairment of long-lived assets, allowance for credit losses, estimates used in lease accounting and income taxes including the valuation allowance for deferred tax assets.
This resulted in an increase of $3.1 million and $3.2 million in food service revenue for the years ended December 31, 2022 and 2023, respectively. On December 27, 2023, the court announced that the bankruptcy property distribution plan of Tiandihui was implemented and the bankruptcy proceedings were completed.
This resulted in an increase of $3.1 million and $3.2 million in food service revenue for the years ended December 31, 2022 and 2023, respectively. On December 27, 2023, the court announced that the bankruptcy property distribution plan of Tiandihui was implemented and the bankruptcy proceedings were completed. We discontinued our restaurant business segment during the second quarter of 2024.
Net cash used in operating activities for the year ended December 31, 2023 totaled $2,492,725 (including cash flows of $ 3,525,413 used in operating activities from our continuing operations and cash flows of $1,032,689 provided by operating activities from discontinued operations).
Net cash used in operating activities for the year ended December 31, 2023 totaled $2,492,725 (including cash flows of $ 3,492,712 used in operating activities from our continuing operations and cash flows of $999,987 provided by operating activities from discontinued operations).
Net cash used in operating activities for the year ended December 31, 2022 totaled $2,072,715 (including cash flows of $ 1,977,789 used in operating activities from our continuing operations and cash flows of $94,926 used in operating activities from discontinued operations).
Net cash used in operating activities for the year ended December 31, 2022 totaled $2,072,715 (including cash flows of $ 1,857,721 used in operating activities from our continuing operations and cash flows of $214,994 used in operating activities from discontinued operations).
Our business, financial condition and results of operations may be materially adversely affected by a challenging economic climate, including adverse changes in interest rates, volatile commodity markets and inflation, contraction in the availability of credit in the market and reductions in consumer spending.
Our business, financial condition and results of operations may be materially adversely affected by a challenging economic climate, including adverse changes in interest rates, volatile commodity markets and inflation, contraction in the availability of credit in the market and reductions in consumer spending. A macroeconomic downturn, which decreases the income, may contribute to decreased occupancy at our properties.
Off-Balance Sheet Arrangements Under SEC regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
The remaining lease term of the Company’s leases ranges from approximately 5 years to 6 years. 58 Off-Balance Sheet Arrangements Under SEC regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Our cost of revenues as a percentage of revenue was 67.58% and 66.03% for the years ended December 31, 2023, and 2022, respectively. Our cost of revenues from our continuing operations is primarily comprised of the cost of our raw materials, labor and overhead costs.
Our cost of revenues as a percentage of revenue was 57.71% and 129.39% for the years ended December 31, 2024, and 2023, respectively. Our cost of revenues from our continuing operations is primarily comprised of the cost of our raw materials, labor and overhead costs.
Furthermore, our business operations may be further affected by the COVID-19 pandemic. There can be no assurances that future revenue or capital infusion will be sufficient to enable us to develop our business to a level where we will be profitable or continuously to generate positive cash flows.
There can be no assurances that future revenue or capital infusion will be sufficient to enable us to develop our business to a level where we will be profitable or continuously to generate positive cash flows.
Our operating loss as a percentage of total revenues was negative 98.36%, and negative 338.60% for the years ended December 31, 2022 and 2021, respectively. The continuous loss from operation was mainly due to increased operating expenses in 2022. Income taxes expense from continuing operations .
Our operating loss as a percentage of total revenues was negative 819,980.58%, and negative 12,295.62% for the years ended December 31, 2023 and 2022, respectively. The continuous loss from operation was mainly due to increased operating expenses in 2023. Income taxes expense from continuing operations .
In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including eventual loss, fine, penalty or business impact, if any. 51 Revenue Recognition Revenue is measured according to ASC Topic 606, Revenue from Contracts with Customers. The Company currently generated revenue from two sources: sales of petfood products and revenue from restaurant business operation.
In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including eventual loss, fine, penalty or business impact, if any. 60 Revenue Recognition Revenue is measured according to ASC Topic 606, Revenue from Contracts with Customers.
Revenue for sale of products is derived from contracts with customers, which primarily include the sale of petfood products. The Company recognizes revenue upon transfer of control of promised goods in a contract with a customer in an amount that reflects the consideration the Company expects to receive in exchange for those products.
The Company recognizes revenue upon transfer of control of promised goods in a contract with a customer in an amount that reflects the consideration the Company expects to receive in exchange for those products.
Revenue under the segment reporting standard is measured on the same basis as under the revenue standard. Contract liabilities are recorded when consideration is received from a customer prior to transferring the control of goods to the customer or other conditions under the terms of a sales contract.
Contract liabilities are recorded when consideration is received from a customer prior to transferring the control of goods to the customer or other conditions under the terms of a sales contract.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 For the year ended December 31, 2022, for revenue generated from petfood sales of our continuing operations, our domestic sales decreased by $282,418 or 92%, and there was no e-commerce sales and overseas sales of petfood products.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 For the year ended December 31, 2023, for revenue generated from petfood sales of our continuing operations, our domestic sales decreased by $23,972 or 97.08%, and there were no e-commerce sales or overseas sales of petfood products.
Changes in fair value, including realized gain of approximately $0.44 million and unrealized loss of approximately $3.08 million for the year ended December 31, 2023.
Changes in fair value include realized gain of approximately $3.37 million and unrealized income of approximately $0.44 million for the year ended December 31, 2024.
Going Concern and Capital Resources Our consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The decrease in our net income was due to the closure of the bankruptcy proceedings of Tiandihui in December 2023. Liquidity and Capital Resources Our consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.
In the ordinary course of business, we enter into operating lease commitments, and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.
We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.
Net loss from discontinued operations On March 16, 2022, the People’s Court of Huangdao District, Qingdao City, Shandong Province made a civil ruling and announced the acceptance of creditors’ application of bankruptcy liquidation of Tiandihui, and it entered into bankruptcy proceedings.
On March 16, 2022, the People’s Court of Huangdao District, Qingdao City, Shandong Province made a civil ruling and announced the acceptance of creditors’ application of bankruptcy liquidation of Tiandihui, and it entered into bankruptcy proceedings. On December 27, 2023, the court announced that the bankruptcy property distribution plan of Tiandihui was implemented and the bankruptcy proceedings were completed.
Our cost of revenues as a percentage of revenue was 66.03% and 71.21% for the years ended December 31, 2022, and 2021, respectively. Gross margin from continuing operations Our gross margin from continuing operations was 32.42% for the year ended December 31, 2023, compared with gross margin of 33.97% for the year ended December 31, 2022.
Our cost of revenues as a percentage of revenue was 129.39% and 426.90% for the years ended December 31, 2023, and 2022, respectively. Gross margin from continuing operations Our gross margin from continuing operations was 42.29% for the year ended December 31, 2024, compared with a negative gross margin of -29.39% for the year ended December 31, 2023.
For the year ended December 31, 2023, our revenue from the restaurant business segment increased by approximately $0.08 million as compared to 2022 and we reported a net loss of approximately $23.63 million and negative cash flows from operating activities of approximately $2.49 million in 2023. We discontinued our petfood manufacturing business segment in 2023.
For the year ended December 31, 2024, our revenue from the commercial real estate management business increased by approximately $0.56 million as compared to 2023, and we reported a net income of approximately $2.50 million and negative cash flows from operating activities of approximately $0.23 million in 2024.
The activities were mainly comprised of a net loss of $23,631,516, depreciation and amortization of $80,149, fair value change of short-term investments $2,644,576, inventory write-down of $42,866, stock-based compensation of 3,040,000, a decrease in prepayment and other current net assets of $10,418, an decrease in other current liabilities of $887,302, and a decrease in accounts payable of $1,748.
The activities were mainly comprised of a net loss of $23,626,172, depreciation and amortization of $22,649, fair value change of short-term investments $2,644,576, inventory write-down of $69,677, stock-based compensation of 3,040,000, an increase in prepayment and other current net assets of $3,210,336, a decrease in other current liabilities of $1,239,570, and a decrease in accounts payable of $369,142.
Recent Developments Discontinued operations We discontinued our petfood manufacturing segment during the first quarter of 2023. On December 27, 2023, the Court announced that the bankruptcy property distribution plan of Tiandihui was implemented and the bankruptcy proceedings had completed. As a result, Tiandihui has been fully disposed as of December 31, 2023.
On December 27, 2023, the court announced that the bankruptcy property distribution plan of Tiandihui was been implemented and the bankruptcy proceedings were completed. As a result, Tiandihui has been fully disposed as of December 31, 2023. We discontinued our restaurant business segment during the second quarter of 2024. The Company now focuses on the commercial real estate managment.
The Company elected to account for shipping and handling fees that occur after the customer has obtained control of goods, for instance, free onboard shipping point arrangements, as a fulfillment cost and accrues for such costs. Management has concluded that the disaggregation level is the same under both the revenue standard and the segment reporting standard.
The Company elected to account for shipping and handling fees that occur after the customer has obtained control of goods, for instance, free onboard shipping point arrangements, as a fulfillment cost and accrues for such costs. In 2024, the Company started its real estate property management business.
The continuous loss from operation was mainly due to increased operating expenses in 2023. Our loss from operations associated with our continuing operations was $3,048,016 for the year ended December 31, 2022, while our loss from operations was $3,660,592 for the year ended December 31, 2021.
The decrease in loss from operation was mainly due to decreased operating expenses in 2024. Our loss from operations associated with our continuing operations was $6,185,523 for the year ended December 31, 2023, while our loss from operations was $3,040,162 for the year ended December 31, 2022.
The decrease of petfood sales revenue of our continuing operations in 2023 was primarily due to the discontinuation of our pet food manufacturing business segment in the first quarter of 2023. As a result of the above, our total revenues from continuing operations for the fiscal year 2023 increased as compared with the fiscal year 2022.
The decrease of petfood sales revenue of our continuing operations in 2023 was primarily due to the discontinuation of our pet food manufacturing business segment in the first quarter of 2023.
On December 27, 2023, the court announced that the bankruptcy property distribution plan of Tiandihui was implemented and the bankruptcy proceedings were completed. In the consolidated statements of operations and comprehensive income (loss), results from discontinued operations is reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis.
In the consolidated statements of operations and comprehensive income (loss), results from discontinued operations is reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis.
Our loss from operations associated with our continuing operations was $6,370,157 for the year ended December 31, 2023, while our loss from operations was $3,048,016 for the year ended December 31, 2022. Our operating loss as a percentage of total revenues was negative 200.58%, and negative 98.36% for the years ended December 31, 2023 and 2022, respectively.
Our loss from operations associated with our continuing operations was $1,832,657 for the year ended December 31, 2024, while our loss from operations was $6,185,523 for the year ended December 31, 2023. Our operating loss as a percentage of total revenues was negative 325.10%, and 819,980.58% for the years ended December 31, 2024 and 2023, respectively.
Balance of taxes payable as of December 31, 2023 was $54,003 representing an increase decrease of $42,080, or 353%, compared with balance of $11,923 as of December 31, 2022. Tabular Disclosure of Contractual Obligations We have certain potential commitments that include future estimated payments.
The balance of taxes payable as of December 31, 2024 was $14,681, representing an increase of $5,391, or 58%, compared with a balance of $9,290 as of December 31, 2023. Tabular Disclosure of Contractual Obligations We have certain potential commitments that include future estimated payments.
The increase in our net income was due to increased revenue from our restaurant business segment and increased investment income for the year ended December 31, 2022.
The increase in our net income was due to increased revenue from our commercial real estate business segment and increased investment income for the year ended December 31, 2024. Our total net loss was $23,631,516 for the year ended December 31, 2023, compared to net income of $855,013 for the year ended December 31, 2022.
Currently, we are working to improve our liquidity and capital sources primarily through financial support from our principal shareholder and the exploration of additional debt or equity financing possibilities. In order to fully implement our business plan and sustain continued growth, we may also need to raise capital from outside investors.
We also plan to evaluate and identify suitable strategic or acquisition opportunities in order to expand our commercial real estate property management business. Currently, we are working to improve our liquidity and capital sources primarily through financial support from our principal shareholder and the exploration of additional debt or equity financing possibilities.
Depreciation of property, plant and equipment is calculated based on cost, less their estimated residual value, if any, using the straight-line method over estimated useful life from 5 years to 50 years. Any change of the depreciation accounting policy or impairment of our property may affect our operating results. Shipping and handling expense.
Our depreciation expenses are mainly driven by the net value of motor vehicles, buildings and other items. Depreciation of property, plant and equipment is calculated based on cost, less their estimated residual value, if any, using the straight-line method over estimated useful life from 5 years to 50 years.
SAFE Circular 19 regulates the conversion by a foreign-invested enterprise of foreign currency registered capital into RMB by restricting how the converted RMB may be used. Furthermore, SAFE promulgated a circular in June 2016, SAFE Circular 16, which further revises some clauses in the SAFE Circular 19.
In March 2015, SAFE issued the Circular Concerning the Reform of the Administration of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 19, which became effective in June 2015. SAFE Circular 19 regulates the conversion by a foreign-invested enterprise of foreign currency registered capital into RMB by restricting how the converted RMB may be used.
The main reason for the increase was mainly due to increased payroll expenses as a result of the increase in the number of employees and stock-based compensation expense due to extension of warrants exercise date. 40 Operating expenses from our continuing operations were $4,100,549, and $3,971,720 for the years ended December 31, 2022 and 2021, respectively, an increase of $128,829, or 3.24%.
The main reason for the increase was mainly due to increased payroll expenses as a result of the increase in the number of employees and stock-based compensation expense due to extension of warrants exercise date. Impairment of goodwill was $325,832, $0 and $0 for the years ended December 31, 2024, 2023 and 2022, respectively.
December 31, Country 2023 2022 China (Mainland) $ 371,807 $ 1,777,357 China (Hong Kong) 2,018,727 80,021 Hong Kong (through a broker account) 107,918 189,056 New Zealand (through a broker account) 8,477,703 16,246,621 U.S. 2,685,227 3,564,070 Total $ 13,661,382 $ 21,857,125 The majority of our cash balances at December 31, 2023 and 2022 are in form of USD and held in a broker accounts in New Zealand and Hong Kong and bank accounts at financial institutions located in China.
December 31, Country 2024 2023 China (Mainland) $ 1,915,855 $ 371,807 China (Hong Kong) 63,969 2,018,727 Hong Kong (through a broker account) 110,502 107,918 New Zealand (through a broker account) 11,690,646 8,477,703 U.S. 1,918,590 2,150,450 Total $ 15,699,562 $ 13,126,605 The majority of our cash balances at December 31, 2024 and 2023 are in form of USD and held in broker accounts in New Zealand and Hong Kong and bank accounts at financial institutions located in China.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Our total revenue from continuing operations increased by $2,017,638 or 187% when comparing 2022 to 2021, among which, revenue generated from pet chews decreased by $37,745 or 82%, revenue from dried pet snacks decreased by $285,320 or 97%, revenue generated from wet canned petfoods decreased by $9,470 or 88%, revenue generated from dental health snacks decreased by $5,577 or 91%, from the year ended December 31, 2021 to the year ended December 31, 2022, respectively.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Our total revenue from continuing operations decreased by $23,972 or 97% when comparing 2023 to 2022, among which, revenue generated from pet chews decreased by $8,367 or 100%, revenue from dried pet snacks decreased by $8,005 or 100%, revenue generated from wet canned petfoods decreased by $1,290 or 100%, revenue generated from dental health snacks decreased by $550 or 100%, from the year ended December 31, 2022 to the year ended December 31, 2023, respectively.
Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment or once delivery and risk of loss has transferred to the customer. The Company started to generate revenue from restaurant business operation when the Company acquired Far Ling’s Inc. and Bo Ling’s Chinese Restaurant, Inc. in late 2021.
Transfer of control occurs once the customer has the contractual right to use the product, generally upon shipment or once delivery and risk of loss has transferred to the customer.
The decrease of petfood sales revenue of our continuing operations in 2023 was primarily due to the discontinuation of our pet food manufacturing business segment in the first quarter of 2023. On the other hand, on October 31, 2021, we acquired 51% equity interests of Far Ling’s Inc and 100% equity interests of Bo Ling’s Chinese Restaurant, Inc.
The decrease of petfood sales revenue of our continuing operations in 2023 was primarily due to the discontinuation of our pet food manufacturing business segment in the first quarter of 2023.
Cash and cash equivalents and restricted cash As of December 31, 2023, cash and cash equivalents were $13,661,382, compared to $21,857,125 at December 31, 2022.
Cash and cash equivalents and restricted cash As of December 31, 2024, cash and cash equivalents were $15,699,562, compared to $13,126,605 at December 31, 2023.
As of December 31, 2023 and 2022, the Company recorded contract liabilities of $4,045 and $11,024, respectively, which were presented as advances from customers on the accompanying consolidated balance sheets. During the years ended December 31, 2023, 2022 and 2021, the Company recognized $6,979, $6,970 and $163,074 of contract liabilities as revenue, respectively.
As of December 31, 2024 and 2023, the Company recorded contract liabilities of $183,173 and $295, respectively, which were presented as advances from customers on the accompanying consolidated balance sheets.
Management’s plan to alleviate the substantial doubt about our ability to continue as a going concern include attempting to improve our business profitability, generating sufficient cash flow from our operations to meet our operating needs on a timely basis, and obtaining additional working capital funds through debt and equity financings in order to meet our anticipated cash requirements.
Our working capital amounted to approximately $24.6 million as of December 31, 2024. We are attempting to further improve our business profitability, generate sufficient cash flow from our operations to meet our operating needs on a timely basis, and obtain additional working capital funds through debt and equity financings in order to meet our anticipated cash requirements.
During the year ended December 31, 2021, our cash used in operating activities was $3,299,563, cash used in investing activities was $1,642,776, cash provided by financing activities was $17,952,057, and had the negative effect of prevailing exchange rates on our cash of $247,807.
During the year ended December 31, 2024, our cash used in operating activities was $233,987, cash provided by investing activities was $2,781,030, and cash provided by financing activities was $0, and the negative effect of prevailing exchange rates on our cash was $508,863.
Although we have not been subject to significant wage inflation, a significant increase in the market rate for wages could harm our operating results and our operating margin. Our ability to attract, retain, and expand our senior management and our professional and technical staff is an important factor in determining our future success.
Prevailing salary levels . Our cost of revenues is impacted by prevailing salary levels. Although we have not been subject to significant wage inflation, a significant increase in the market rate for wages could harm our operating results and our operating margin.
The ratio of operating expenses as a percentage of revenue decreased from 367.38% for the year ended December 31, 2021 to 132.33% for the year ended December 31, 2022. Selling expense from our continuing operations was $91,370 and $74,278 for the years ended December 31, 2022, and 2021, respectively, an increase of $17,092 or 23.01%.
The ratio of operating expenses as a percentage of revenue decreased from 819,951.18% for the year ended December 31, 2023 to 367.39% for the year ended December 31, 2024. Selling expense from our continuing operations was $0 and $22 for the years ended December 31, 2024, and 2023, respectively, a decrease of $22 or $100%.
The activities were mainly comprised of a net income of $803,700, depreciation and amortization of $17,114, fair value change of short-term investments $4,161,093, inventory write-down of $11,532, an increase in prepayment and other current net assets of $1,017,261, an increase in other current liabilities of $1,054,749, and a decrease in accounts payable of $305,382. 43 Net cash used in operating activities for the year ended December 31, 2021 totaled $3,299,563 (including cash flows of $8,154,363 used in operating activities from our continuing operations and cash flows of $4,854,800 provided by operating activities from discontinued operations).
The activities were mainly comprised of a net income of $803,700, depreciation and amortization of $17,114, fair value change of short-term investments $4,161,093, inventory write-down of $11,532, a decrease in prepayment and other current net assets of $2,714,557, an increase in other current liabilities of $811,658, and a decrease in accounts payable of $266,778. 53 Net cash provided by investing activities for the year ended December 31, 2024 totaled $2,781,030 from our continuing operations, primarily include purchase of property and equipment of $1,881,370, proceeds from disposal of subsidiaries of $578,400, purchases of short-term investments of $46,777,749 and proceeds from sale of short-term investments of $50,944,982.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Overall, in terms of revenue from our continuing operations, our petfood sales to the China domestic market and overseas market both significantly decreased in 2022 as compared to 2021, mainly due to decreased sales volume of our products as affected by the negative impact of COVID-19 as discussed above, as well as decrease in sales orders, and our unfavorable selling price.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Overall, in terms of revenue from our continuing operations, our petfood sales to the China domestic market and overseas market both significantly decreased in 2023 and 2022, mainly due to the discontinuation of our pet food manufacturing business segment in the first quarter of 2023.
Selling expense from our continuing operations was $90,659 and $91,370 for the years ended December 31, 2023, and 2022, respectively, a decrease of $711 or 0.78%. Our selling expenses decreased in 2023 compared to 2022, mainly due to the company’s management saving expenses.
Our selling expenses was $0 in 2024 as compared to 2023, mainly due to the company’s management saving expenses. General and administrative expenses from our continuing operations were $1,745,247 and $3,145,280 for the years ended December 31, 2024 and 2023 respectively, representing a decrease of $1,400,033, or $44.51%, in fiscal year 2024 as compared to fiscal year 2023.
Cost of revenues of our restaurant business consist primarily of food and packaging costs, payroll and employee benefit costs, store lease and occupancy costs and depreciation and amortization costs. Selling, general and administrative expenses .
Costs and Expenses from continuing operations Our costs and expenses primarily include the following: Costs of revenues . Cost of revenues of our commercial real estate management business consists primarily, payroll and employee benefit costs, lease and occupancy costs, depreciation and amortization costs and agency service costs. Selling, general and administrative expenses .
As of December 31, 2023, we had the following contractual obligations: Payments Due by Period Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years Lease Obligations $ 683,113 240,000 443,113 - - Total $ 683,113 $ 240,000 $ 443,113 $ - $ - The Company has signed one lease agreement for restaurant premises.
As of December 31, 2024, we had the following contractual obligations: Payments Due by Period Contractual Obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years Lease Obligations $ 2,224,492 584,825 1,347,541 292,125 - Total $ 2,224,492 $ 584,825 $ 1,347,541 $ 292,125 $ - The Company has signed seven commercial real estate lease agreements.
This resulted in an increase of $3.2 million and $3.1 million in food service revenue for the years ended December 31, 2023 and 2022, respectively. We decided to discontinue our petfood manufacturing business segment in the first quarter of 2023 due to the operational challenges and we plan to focus on our restaurant segment.
On October 31, 2021, we acquired 51% equity interests of Far Ling’s Inc and 100% equity interests of Bo Ling’s Chinese Restaurant, Inc. and started our restaurant business. This resulted in an increase of $3.1 million, $3.2 and $1.3 million in food service revenue for the years ended December 31, 2022, 2023 and 2024, respectively.
Cost of revenues from continuing operations Our cost of revenues from our continuing operations is primarily comprised of the cost of our raw materials, labor and overhead costs.
Cost of revenues from continuing operations Our cost of revenues from our continuing operations is primarily comprised of the cost of our payroll and employee benefit costs, lease and occupancy costs, depreciation and amortization costs and agency service costs.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

18 edited+0 added−0 removed60 unchanged
Nominating Committee The Nominating Committee will be responsible for, among other matters: ● selecting or recommending for selection candidates for directorships; ● evaluating the independence of directors and director nominees; ● reviewing and making recommendations regarding the structure and composition of our board and the board committees; ● developing and recommending to the board corporate governance principles and practices; ● reviewing and monitoring the Company’s Code of Business Conduct and Ethics; and ● overseeing the evaluation of the Company’s management Our Nominating Committee consists of consists of Caifen Zou, Qiu Li, and Owens Meng, with Caifen Zou serving as chair of the Nominating Committee.
Nominating Committee The Nominating Committee will be responsible for, among other matters: ● selecting or recommending for selection candidates for directorships; ● evaluating the independence of directors and director nominees; ● reviewing and making recommendations regarding the structure and composition of our board and the board committees; ● developing and recommending to the board corporate governance principles and practices; ● reviewing and monitoring the Company’s Code of Business Conduct and Ethics; and ● overseeing the evaluation of the Company’s management Our Nominating Committee consists of Caifen Zou, Qiu Li, and Owens Meng, with Caifen Zou serving as chair of the Nominating Committee.
A director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested.
A director may vote, attend a board meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested.
A director must promptly disclose the interest to all other directors after becoming aware of the fact that he or she is interested in a transaction we have entered into or are to enter into.
A director must promptly disclose the interest to all other directors after becoming aware of the fact that he or she is interested in a transaction we have entered into or are to enter into.
A general notice or disclosure to the board or otherwise contained in the minutes of a meeting or a written resolution of the board or any committee of the board that a director is a shareholder, director, officer or trustee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company will be sufficient disclosure, and, after such general notice, it will not be necessary to give special notice relating to any particular transaction.
A general notice or disclosure to the board or otherwise contained in the minutes of a meeting or a written resolution of the board or any committee of the board that a director is a shareholder, director, officer or trustee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company will be sufficient disclosure, and, after such general notice, it will not be necessary to give special notice relating to any particular transaction.
The directors may receive such remuneration as our board of directors may determine from time to time.
The directors may receive such remuneration as our board of directors may determine from time to time.
Each director is entitled to be repaid or prepaid for all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board of directors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director.
Each director is entitled to be repaid or prepaid for all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred in attending meetings of our board of directors or committees of our board of directors or shareholder meetings or otherwise in connection with the discharge of his or her duties as a director.
The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors.
The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors.
Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party.
Our board of directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party.
In addition, our board has determined that Lei Wang qualifies as an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the NASDAQ rules. 59 Compensation Committee The Compensation Committee will be responsible for, among other matters: ● reviewing and approving, or recommending to the board of directors to approve the compensation of our CEO and other executive officers and directors; ● reviewing key employee compensation goals, policies, plans and programs; ● administering incentive and equity-based compensation; ● reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and ● appointing and overseeing any compensation consultants or advisors.
In addition, our board has determined that Lei Wang qualifies as an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the NASDAQ rules. 68 Compensation Committee The Compensation Committee will be responsible for, among other matters: ● reviewing and approving, or recommending to the board of directors to approve the compensation of our CEO and other executive officers and directors; ● reviewing key employee compensation goals, policies, plans and programs; ● administering incentive and equity-based compensation; ● reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and ● appointing and overseeing any compensation consultants or advisors.
The functions and powers of our board of directors include, among others: ● appointing officers and determining the term of office of the officers; ● authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable; 60 ● exercising the borrowing powers of the company and mortgaging the property of the company; ● executing checks, promissory notes and other negotiable instruments on behalf of the company; and maintaining or registering a register of mortgages, charges or other encumbrances of the company.
The functions and powers of our board of directors include, among others: ● appointing officers and determining the term of office of the officers; ● authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable; 69 ● exercising the borrowing powers of the company and mortgaging the property of the company; ● executing checks, promissory notes and other negotiable instruments on behalf of the company; and maintaining or registering a register of mortgages, charges or other encumbrances of the company.
Zou received her Associate’s degree in Administration Management from Shandong Normal University, and held Intermediate Accountant Qualification Certificate and Intermediate Economist Qualification Certificate in China. The Board of Directors determined that Ms. Zou should serve as our director based on her experience and expertise in accounting, management and internal controls. 55 Owens Meng is an independent director.
Zou received her Associate’s degree in Administration Management from Shandong Normal University, and held Intermediate Accountant Qualification Certificate and Intermediate Economist Qualification Certificate in China. The Board of Directors determined that Ms. Zou should serve as our director based on her experience and expertise in accounting, management and internal controls. 64 Owens Meng is an independent director.
As a smaller reporting company with a small board of directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters. 58 Director Independence Our board has reviewed the independence of our directors, applying the NASDAQ independence standards.
As a smaller reporting company with a small board of directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight matters. 67 Director Independence Our board has reviewed the independence of our directors, applying the NASDAQ independence standards.
Director Compensation Directors are entitled to receive compensation for their actual travel expenses for each Board meeting attended. We paid $10,000 compensation to each of our directors during each of the years ended December 31, 2023 and 2022.
Director Compensation Directors are entitled to receive compensation for their actual travel expenses for each Board meeting attended. We paid $10,000 compensation to each of our directors during each of the years ended December 31, 2024 and 2023.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable as a matter of United States law. 57 Retirement Benefits As of December 31, 2023, we have contributed to the government-mandated employee welfare and retirement benefit plan and provided pension, retirement or similar benefits to its employees.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors or officers under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable as a matter of United States law. 66 Retirement Benefits As of December 31, 2024, we have contributed to the government-mandated employee welfare and retirement benefit plan and provided pension, retirement or similar benefits to its employees.
A director is not required to hold shares as a qualification to office. 56 B. Compensation The following table shows the annual compensation paid by us for the years ended December 31, 2023 and 2022 to our principal executive officers.
A director is not required to hold shares as a qualification to office. 65 B. Compensation The following table shows the annual compensation paid by us for the years ended December 31, 2024 and 2023 to our principal executive officers.
Name and principal position Year Salary ($) Bonus ($) Total Paid ($) Dandan Liu 2023 95,000 (1) 1,998,457 (2) 2,093,457 CEO and director 2022 95,000 (1) 35,000 130,000 Feng Zhang 2023 58,000 (1) - 58,000 CFO 2022 58,000 (1) - 58,000 (1) Includes $10,000 received as compensation for serving as a director.
Name and principal position Year Salary ($) Bonus ($) Total Paid ($) Dandan Liu 2024 120,000 (1) - 120,000 CEO and director 2023 95,000 (1) 1,998,457 (2) 2,093,457 Feng Zhang 2024 58,000 (1) - 58,000 CFO 2023 58,000 (1) - 58,000 (1) Includes $10,000 received as compensation for serving as a director.
We consider our relations with our employees to be good. 2021 2022 2023 Number of Employees 42 51 56 E. Share Ownership See Item 7 below. 61
We consider our relations with our employees to be good. 2022 2023 2024 Number of Employees 51 56 17 E. Share Ownership See Item 7 below. 70
Directors and senior management The following table sets forth our executive officers and directors, their ages and the positions held by them as of April 29, 2024: Name Age Position Dandan Liu 36 Chief Executive Officer, Class A Director Feng Zhang 41 Chief Financial Officer, Class A Director Caifen Zou (1) (2) (3) 59 Class B Director, independent Qiu Li (1) (2) (3) 63 Class B Director, independent Owens Meng (1) (2) (3) 46 Class C Director, independent (1) Member of the Audit Committee.
Directors and senior management The following table sets forth our executive officers and directors, their ages and the positions held by them as of April 21, 2025: Name Age Position Dandan Liu 37 Chief Executive Officer, Class A Director Feng Zhang 42 Chief Financial Officer, Class A Director Caifen Zou (1) (2) (3) 60 Class B Director, independent Qiu Li (1) (2) (3) 64 Class B Director, independent Owens Meng (1) (2) (3) 47 Class C Director, independent (1) Member of the Audit Committee.

Item 7. Management's Discussion & Analysis

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

7 edited+3 added−13 removed7 unchanged
As a result, the corresponding loan was classified as current liability and included in short term loans – related parties as of December 31, 2023 and 2022. The Company is aware of the possible penalty and/or other consequence due to the default, however, no reasonable estimate can be made at this time.
As a result, the corresponding loan was classified as current liability and included in short term loans – related parties as of December 31, 2024 and 2023. The Company is aware of the possible penalty and/or other consequence due to the default, however, no reasonable estimate can be made at this time.
Short term loans from related parties December 31, December 31, 2023 2022 Rongfeng Cui $ 277,408 $ 266,451 Total $ 277,408 $ 266,451 In March 2018, TDH Group BVBA borrowed non-interest bearing, unsecured long term loans from Rongfeng Cui in the aggregate amount of €250,000 (approximately $288,000), of which payments of €60,000 (approximately $69,000), €60,000 (approximately $69,000), €60,000 (approximately $69,000), €60,000 (approximately $69,000), €10,000 (approximately $11,500) and $0 were due in the years ended December 31, 2019, 2020, 2021, 2022, 2023 and thereafter, respectively.
Short term loans from related parties In March 2018, TDH Group BVBA borrowed non-interest bearing, unsecured long term loans from Rongfeng Cui in the aggregate amount of €250,000 (approximately $288,000), of which payments of €60,000 (approximately $69,000), €60,000 (approximately $69,000), €60,000 (approximately $69,000), €60,000 (approximately $69,000), €10,000 (approximately $11,500) and $0 were due in the years ended December 31, 2019, 2020, 2021, 2022, 2023 and thereafter, respectively.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major shareholders The following table sets forth, as of April 26, 2024 certain information regarding beneficial ownership of our shares by each person who is known by us to beneficially own more than 5% of our shares.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major shareholders The following table sets forth, as of April 21, 2025 certain information regarding beneficial ownership of our shares by each person who is known by us to beneficially own more than 5% of our shares.
The Company did not make any repayment to Rongfeng Cui during the years ended December 31, 2013, 2022 and 2021, such failure to pay may lead to callable of the loan at any time by Rongfeng Cui.
The Company did not make any repayment to Rongfeng Cui during the years ended December 31, 2024, 2023 and 2022, such failure to pay may lead to callable of the loan at any time by Rongfeng Cui.
The interest expenses for the loans from related parties amounted to $0, $0 and $29,581 for the years ended December 31, 2023, 2022 and 2021, respectively. Accounts payable to related parties December 31, December 31, 2023 2022 Richard Ng $ - $ 1,033 Total $ - $ 1,033 C. Interests of Experts and Counsel Not required. 64
The interest expenses for the loans from related parties amounted to $0, $0 and $29,581 for the years ended December 31, 2024, 2023 and 2022, respectively. C. Interests of Experts and Counsel Not required. 72
Due to related parties from continuing operations Due to related parties consisted of the following: December 31, December 31, 2023 2022 Dandan Liu 1,963,457 - Rongfeng Cui - 33,624 Feng Zhang - 22,123 Products Inc. 19,973 - Total $ 1,983,430 $ 55,747 63 The balance of due to related parties represents expenses paid by related parties on behalf of the Company as well as advances the Company obtained from related parties for working capital purposes.
Due to related parties from continuing operations Due to related parties consisted of the following: December 31, December 31, 2024 2023 Dandan Liu 200,318 1,963,794 Total $ 200,318 1,963,794 The balance of due to related parties represents expenses paid by related parties on behalf of the Company as well as advances the Company obtained from related parties for working capital purposes.
B. Related Party Transactions The related parties had transactions for the years ended December 31, 2023, 2022 and 2021 consist of the following: Name of Related Party Nature of Relationship at December 31, 2023 Dandan Liu Chairman of the Board, Shareholder, Chief Executive Officer (“CEO”) Rongfeng Cui Former Chairman of the Board and Former CEO.
Related Party Transactions The related parties with whom the Company had transactions for the years ended December 31, 2024, 2023 and 2022 consist of the following: Name of Related Party Nature of Relationship at December 31, 2024 Dandan Liu Chairman of the Board, Shareholder, Chief Executive Officer (“CEO”) Feng Zhang Chief Financial Officer (“CFO”) 71 Name of Related Party Nature of Relationship at December 31, 2021 Caifen Zou Independent director of TDH Holding, Inc.
Removed
Rongfeng Cui ceased to be the CEO of the Company effective August 2, 2019. Rongbing Cui Former Chief Financial Officer (“CFO”), Rongfeng Cui’s brother Feng Zhang CFO Yanjuan Wang Rongfeng Cui’s wife Yan Fu Former Sales Vice President Yuxiang Qi Dandan Liu’s mother Tide (Shanghai) Industrial Co. Ltd.
Added
Qiu Li Independent director of TDH Holding, Inc. Owens Meng Independent director of TDH Holding, Inc. Xue Jiang The Executive Director and Manager of QD Pet Food The Executive Director and Manager of QD Food Sales Shanghai Yuanhong Health Management Consulting Co., Ltd.
Removed
Owned by Rongfeng Cui and Yanjuan Wang 62 Name of Related Party Nature of Relationship at December 31, 2021 Qingdao Like Pet Supplies Co., Ltd. Rongfeng Cui served as CEO, and Shuhua Cui, sister of Rongfeng Cui, served as the legal person.
Added
Xue Jiang serves as the Executive Director and holds 100% of the shares; Long He serves as the Supervisor. Yulan Li The Executive Director and Manager of Beijing Jingshi Commercial Management Co., Ltd., holding 40% of the shares Kai Wang The Executive Director and Manager of Beijing Jingshi Space Commercial Management Co., Ltd.
Removed
On May 26, 2016, both Rongfeng Cui and Shuhua Cui resigned from their positions, but still have significant influence on Like. Qingdao Saike Environmental Technology Co., Ltd.
Added
Fan Wu The Executive Director and Manager of Beijing Ruihe Commercial Management Co., Ltd.; The Executive Director and Manager of Beijing Ruihe Space Commercial Management Co., Ltd.
Removed
Owned by Rongfeng Cui and Yanjuan Wang Huangdao Ding Ge Zhuang Kangkang Family Farm Controlled by Rongfeng Cui’s father TDH Group BVBA A Belgium company solely owned by Rongfeng Cui prior to November 30, 2018; a wholly owned subsidiary of the Company since November 30, 2018 TDH JAPAN A Japanese company solely owned by Rongfeng Cui prior to November 30, 2018; a wholly owned subsidiary of the Company since November 30, 2018.
Removed
Dissolved in February 2021. Qingdao Yinhe Jiutian Information Technology Co., Ltd. Solely owned by Rongbing Cui Huangdao Hanyinhe Software Development Center Co., Ltd. Solely owned by Xiaomei Wang Beijing Quanmin Chongai Information Technology Co., Ltd. (“Quanmin Chongai”) Rongbing Cui serves as supervisor of Quanmin Chongai LAI LINGS LENEXA Raymond Ng is the son of Richard Ng Products Inc.
Removed
Owned by Richard Ng Bo Lings at Zona Rosa in the Northland Owned by Richard Ng Richard Ng Richard owns 49% control of Far Ling’s Inc.
Removed
Modification of Loans from related party In January 2018, the Company entered into a loan agreement with Dandan Liu.
Removed
In May 2018, the agreement was amended to, among others, reclassify unpaid interest payable to the principal of the loan, resulting in an increase of principal from RMB3,000,000 (approximately $466,000) to RMB3,030,000 (approximately $471,000) and increase the interest rate from 3% to 15%. Interest rate will be 24% for the period past due.
Removed
In March 2019, the agreement was further amended to, among others, reclassify unpaid interest payable to the principal of the loan, resulting in an increase of principal to RMB3,484,500 (approximately $539,000) and extend the maturity date from January 2019 to May 2019. As of Dec. 31, 2022, the loan had $69,566 of interest outstanding.
Removed
In connection with the bankruptcy proceedings of Tiandijhui, on December 27, 2023, the Court announced that the bankruptcy property distribution plan of Tiandihui was implemented and the bankruptcy proceedings were completed. Pursuant to the judgment and decision by the Court, loans payable plus accrued interest to be paid to Dandan Liu were not approved by the bankruptcy distribution plan.
Removed
As a result, the loans are included in the loss from discontinued operation of Tiandihui for the year ended December 31, 2023. In June 2018, the Company entered into a loan agreement with Yuxiang Qi. Interest rate was 15% during the loan period and 24% for the period past due.
Removed
In March 2019, the agreement was amended to, among others, reclassify unpaid interest payable to the principal of the loan, resulting in an increase of principal from RMB3,000,000 (approximately $462,000) to RMB3,405,000 (approximately $522,000) and extend the maturity date from December 2018 to May 2019.
Removed
Pursuant to the judgment and decision by the Court in connection with the bankruptcy distribution plan, only RMB 94,270 (approximately $13,284) in principal of the loan was approved by the court. The Company made the payment of RMB 94,270 (approximately $13,284) to Yuxiang Qi in December 2023.

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