UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2023

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 333-169397

Tengjun Biotechnology Corp.

(Exact name of small business issuer as specified in its charter)

Nevada		27-3042462
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification Number)

East Jinze Road and South Huimin Road, Food Industry Economic and Technology Development District,
Jianxiang County, Jining City, Shandong Province, China

(Address of principal executive offices and zip code)

(86) 0537-8711599

(Registrant’s telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒☐ Non-accelerated filer ☐☒ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the Registrant’s common stock, $0.001 par value per share, outstanding as of ~~May~~August 810, 2023, was 100,711,196.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Not applicable		Not applicable		Not applicable

TABLE OF CONTENTS

		Page No.
	PART I. - FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1819
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2327
Item 4.	Controls and Procedures	2327
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	2428
Item 1A.	Risk Factors	2428
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2428
Item 3.	Defaults upon Senior Securities	2428
Item 4.	Mine Safety Disclosures	2428
Item 5.	Other Information	2428
Item 6.	Exhibits	2428
Signatures		2529

PART 1 - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TENGJUN BIOTECHNOLOGY CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30,			December 31,
	2023			2022
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	25,112,151		$	2,830,646
Advance to suppliers		72,272			416,911
Inventories, net		2,348,133			1,001,028
Due from related party		2,936,417			4,534,714
Other receivables		400,029,668			41,785,778
Total Current Assets		430,498,641			50,569,077

Property and equipment, net		617,138			325,561
Construction in progress		7,846,534			7,734,862

Total Assets	$	438,962,313		$	58,629,500

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	5,716,166		$	5,497,322
Advances from customers		385,437,763			44,512
Due to related parties		7,341,606			14,992,896
Accrued liabilities and other payables		25,201,808			23,122,233
Total Current Liabilities		423,697,343			43,656,963

Total Liabilities		423,697,343			43,656,963

Shareholders’ Equity
Preferred stock, $.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding		-			-
Common stock, $.001 par value; 200,000,000 shares authorized; 100,711,196 and 96,309,169 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		100,711			96,309
Additional paid-in capital		8,988,779			3,868,599
Subscribed stock		-			2,751,828
Accumulated profit (deficit)		8,068,592			8,159,037
Accumulated other comprehensive loss		(2,302,142	)		(420,376	)
Total Stockholders’ Equity		14,855,940			14,455,397

Noncontrolling interests		409,030			517,140
Total Equity (Deficit)		15,264,970			14,972,537

Total Liabilities and Equity	$	438,962,313		$	58,629,500

	March 31,			December 31,
	2023			2022
Assets
Current Assets
Cash and cash equivalents	$	12,014,466		$	2,830,646
Advance to suppliers		85,298,237			416,911
Inventories, net		1,064,493			1,001,028
Due from related party		2,549,146			4,534,714
Other receivables		64,487,077			41,785,778
Total Current Assets		165,413,419			50,569,077
Property and equipment, net		361,618			325,561
Construction in progress		8,146,134			7,734,862
Total Assets	$	173,921,171		$	58,629,500
Liabilities and Deficit
Current Liabilities
Accounts payable	$	5,576,247		$	5,497,322
Advances from customers		117,746,702			44,512
Due to related parties		14,941,850			14,992,896
Accrued liabilities and other payables		19,887,949			23,122,233
Total Current Liabilities		158,152,748			43,656,963
Total Liabilities		158,152,748			43,656,963
Stockholders’ equity (deficit)
Preferred stock, $.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding		-			-
Common stock, $.001 par value; 200,000,000 shares authorized; 99,309,169 and 96,309,169 shares issued and outstanding as of March 31, 2023 and 2022, respectively		99,309			96,309
Additional paid-in capital		6,865,612			3,868,599
Subscribed stock		29,582			2,751,828
Accumulated profit (deficit)		8,521,704			8,159,037
Accumulated other comprehensive loss		(298,796	)		(420,376	)
Total stockholders’ equity		15,217,411			14,455,397
Noncontrolling interests		551,012			517,140
Total Equity		15,768,423			14,972,537
Total Liabilities and Equity	$	173,921,171		$	58,629,500

The accompanying notes are an integral part of these consolidated financial statements

~~The accompanying notes are an integral part of these consolidated financial statements~~1

1TENGJUN BIOTECHNOLOGY CORP. AND SUBSIDIARIES

~~TENGJUN~~CONSOLIDATED STATEMENTS ~~BIOTECHNOLOGY~~OF ~~CORP.~~INCOME AND ~~SUBSIDIARIES~~COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022

Sales revenue, net	$	-		$	51,290,462		$	8,516,646		$	55,574,576
Cost of goods sold		10,170			3,438,949			531,818			3,809,013
Gross Profit (Loss)		(10,170	)		47,851,513			7,984,828			51,765,563
Selling and marketing expenses		-			42,952,863			7,077,178			46,310,836
General and administrative expenses		417,334			268,934			759,169			499,273
Total operating expenses		417,334			43,221,797			7,836,347			46,810,109
Income (Loss) from operations		(427,504	)		4,629,716			148,481			4,955,454
Interest income (expense), net		9,540			7,397			21,432			7,421
Other (expense) income, net		(51,000	)		(74	)		(56,480	)		(74	)
Income (Loss) before provision for income taxes		(468,964	)		4,637,039			113,433			4,962,801
Provision for income taxes		(2,264	)		503,231			189,547			596,186
Net income (loss)	$	(466,700	)	$	4,133,808		$	(76,114	)	$	4,366,615
Net income (loss) attributable to noncontrolling interest		(13,588	)		212,665			14,331			226,649
Net income (loss) attributable to the Company		(453,112	)		3,921,143			(90,445	)		4,139,966
Net income (loss)		(466,700	)		4,133,808			(76,114	)		4,366,615
Other comprehensive income (loss):
Foreign currency translation loss	$	(2,131,739	)	$	(46,501	)	$	(2,004,207	)	$	(55,939	)
Comprehensive income (loss)		(2,598,439	)		4,087,307			(2,080,321	)		4,310,676
Comprehensive income (loss) attributable to noncontrolling interests		(141,982	)		210,317			(108,110	)		223,824
Comprehensive income (loss) attributable to Tengjun stockholders	$	(2,456,457	)	$	3,876,990		$	(1,972,211	)	$	4,086,852

Net Loss Per Common Share:
Net income (loss) per common share - basic and diluted (in Dollars per share)	$	0.00		$	0.06		$	0.00		$	0.06

Weighted average shares outstanding:
Basic and diluted (in Shares)		100,187,364			65,309,169			98,258,980			65,309,169

~~(UNAUDITED)~~The accompanying notes are an integral part of these consolidated financial statements.

	For the Three Months Ended
	March 31,
	2023			2022
Sales revenue, net	$	8,516,646		$	4,284,114
Cost of goods sold		521,648			370,064
Gross profit		7,994,998			3,914,050
Selling and marketing expenses		7,077,178			3,357,973
General and administrative expenses		341,834			230,339
Total operating expenses		7,419,012			3,588,312
Income (Loss) from operations		575,986			325,738
Interest income (expense), net		11,892			24
Other (expense) income, net		(5,480	)		-
Income (Loss) before provision for income taxes		582,398			325,762
Provision for income taxes		191,811			92,955
Net income (loss)		390,587		$	232,807
Net income (loss) attributable to noncontrolling interest		27,920			13,984
Net income (loss) attributable to the Company		362,667			218,823
Net income (loss)		390,587			232,807
Other comprehensive income (loss):
Foreign currency translation loss		127,532			(9,438	)
Comprehensive income (loss)		518,119			223,369
Comprehensive income (loss) attributable to noncontrolling interests		33,872			13,507
Comprehensive income (loss) attributable to Tengjun stockholders	$	484,247		$	209,862
Net Loss Per Common Share:
Net income (loss) per common share - basic and diluted	$	0.00		$	0.00
Weighted average shares outstanding:
Basic and diluted		99,039,506			65,309,169

~~The~~TENGJUN BIOTECHNOLOGY ~~accompanying~~CORP. ~~notes~~AND ~~are an integral part of these consolidated financial statements.~~SUBSIDIARIES

2CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

~~TENGJUN BIOTECHNOLOGY CORP. AND SUBSIDIARIES~~(UNAUDITED)

CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT

													Accumulated
					Additional					Accumulated			Other
	Common Stock				Paid-in		Subscribed			Profit			Comprehensive			Noncontrolling			Total
	Shares		Amount		Capital		Stock			(Deficit)			Loss			Interests			Equity
Balance at Dec. 31, 2021		65,309,169	$	65,309	$	1,099,599	$	-		$	(3,187,804	)	$	(168,535	)	$	(94,299	)	$	(2,285,730	)
Net loss		-		-		-		-			218,823			-			13,984			232,807
Foreign currency translation		-		-		-		-			-			(8,961	)		(477	)		(9,438	)
Balance at Mar. 31, 2022		65,309,169		65,309		1,099,599		-			(2,968,981	)		(177,496	)		(80,792	)		(2,062,361	)
Net Income (restated)		-		-		-		-			3,921,143			-			212,665			4,133,808
Foreign currency translation (restated)		-		-		-		-			-			(44,153	)		(2,348	)		(46,501	)
Balance at Jun. 30, 2022 (restated)		65,309,169	$	65,309	$	1,099,599	$	-		$	952,162		$	(221,649	)	$	129,525		$	2,024,946

													Accumulated
					Additional					Accumulated			Other
	Common Stock				Paid-in		Subscribed			Profit			Comprehensive			Noncontrolling			Total
	Shares		Amount		Capital		Stock			(Deficit)			Loss			Interests			Equity
Balance at Dec. 31, 2022		96,309,169	$	96,309	$	3,868,599	$	2,751,828		$	8,159,037		$	(420,376	)	$	517,140		$	14,972,537
Issuance of common stock		3,000,000		3,000		2,997,013		(2,751,828	)		-			-			-			248,185
Common stock subscriptions received in advance		-		-		-		29,582			-			-			-			29,582
Net income		-		-		-		-			362,667			-			27,920			390,587
Foreign currency translation		-		-		-		-			-			121,580			5,952			127,532
Balance at Mar. 31, 2023		99,309,169		99,309		6,865,612		29,582			8,521,704			(298,796	)		551,012			15,768,423
Issuance of common stock		1,402,027		1,402		2,123,167		(29,582	)		-			-			-			2,094,987
Net income		-		-		-		-			(453,112	)		-			(13,588	)		(466,700	)
Foreign currency translation		-		-		-		-			-			(2,003,346	)		(128,394	)		(2,131,740	)
Balance at Jun. 30, 2023		100,711,196	$	100,711	$	8,988,779	$	0		$	8,068,592		$	(2,302,142	)	$	409,030		$	15,264,970

~~(UNAUDITED)~~The accompanying notes are an integral part of these consolidated financial statements.

												Accumulated
					Additional							Other
	Common Stock				Paid-in		Subscribed			Accumulated		Comprehensive			Noncontrolling		Total
	Shares		Amount		Capital		Stock			Profit		Loss			Interests		Equity
Balance at December 31, 2022		96,309,169	$	96,309	$	3,868,599	$	2,751,828		$	8,159,037	$	(420,376	)	$	517,140		14,972,537
Issuance of common stock		3,000,000		3,000		2,997,013		(2,751,828	)		-		-			-		248,185
Common stock subscriptions received in advance		-		-		-		29,582			-		-			-		29,582
Net income		-		-		-		-			362,667		-			27,920		390,587
Foreign currency translation		-		-		-		-			-		121,580			5,952		127,532
Balance at March 31, 2023		99,309,169	$	99,309	$	6,865,612	$	29,582		$	8,521,704	$	(298,796	)	$	551,012	$	15,768,423

												Accumulated
					Additional							Other						Total
	Common Stock				Paid-in		Subscribed		Accumulated			Comprehensive			Noncontrolling			Equity
	Shares		Amount		Capital		Stock		Deficit			Loss			Interests			(Deficit)
Balance at December 31, 2021		65,309,169	$	65,309	$	1,099,599	$	-	$	(3,187,804	)	$	(168,535	)	$	(94,299	)		(2,285,730	)
Net income		-		-		-		-		218,823			-			13,984			232,807
Foreign currency translation		-		-		-		-		-			(8,961	)		(477	)		(9,438	)
Balance at March 31, 2022		65,309,169	$	65,309	$	1,099,599	$	0	$	(2,968,981	)	$	(177,496	)	$	(80,792	)	$	(2,062,361	)

TENGJUN BIOTECHNOLOGY CORP. AND SUBSIDIARIES

~~The~~CONSOLIDATED STATEMENTS ~~accompanying~~OF ~~notes~~CASH ~~are an integral part of these consolidated financial statements.~~FLOWS

3(UNAUDITED)

TENGJUN BIOTECHNOLOGY CORP. AND SUBSIDIARIES

	For the Six Months Ended
	June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(76,114	)	$	4,366,615
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		(291,577	)		163,941
Changes in assets and liabilities:
Inventories		(1,347,105	)		1,728,160
Prepaid taxes		-			676,958
Other receivables		(358,243,890	)		(8,119,391	)
Advance to suppliers		344,639			(12,867	)
Accounts payable		218,844			51,004
Advance from customers		385,393,251			1,004,045
Taxes payable		-			7,930,253
Accrued liabilities and other payable		2,079,575			(96,868	)
Net cash provided by operating activities		28,077,623			7,691,850

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		-			(4,967	)
Payment for construction in progress		(111,672	)		(207,908	)
Net cash used in investing activities		(111,672	)		(212,875	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuing common stocks		2,372,754			-
Net proceeds (repayment of) loans from related parties		(6,052,993	)		(776,804	)
Net cash used in financing activities		(3,680,239	)		(776,804	)

EFFECT OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS		(2,004,207	)		(228,026	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		22,281,505			6,474,145

CASH AND CASH EQUIVALENTS, BEGINNING BALANCE		2,830,646			285,568
CASH AND CASH EQUIVALENTS, ENDING BALANCE		25,112,151			6,759,713

Supplemental cash flow information
Interest paid	$	-		$	4,977

~~CONSOLIDATED~~The accompanying ~~STATEMENTS~~notes OFare ~~CASH~~an ~~FLOWS~~integral part of these consolidated financial statements.

~~(UNAUDITED)~~4

	For the Three Months Ended
	March 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	390,587		$	232,807
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		45,210			84,111
Changes in net assets and liabilities:
Inventories		(50,107	)		258,837
Prepaid taxes		-			514,376
Other receivables		(22,214,448	)		-
Advance to suppliers		(85,174,409	)		4,949
Accounts payable		4,606			-
Advance from customers		118,115,836			-
Taxes payable		1,283,876			211,485
Accrued liabilities and other payable		(4,841,673	)		(45,626	)
Net cash used in operating activities		7,559,478			1,260,939
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(76,978	)		(2,384	)
Payment for construction in progress		(307,782	)		(46,089	)
Net cash used in investing activities		(384,760	)		(48,473	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuing common stocks		277,767			-
Net proceeds (repayment of) loans from related parties		1,737,409			190,716
Net cash provided by financing activities		2,015,176			190,716
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS		(6,074	)		2,089
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		9,183,820			1,405,271
CASH AND CASH EQUIVALENTS, BEGINNING BALANCE		2,830,646			285,568
CASH AND CASH EQUIVALENTS, ENDING BALANCE	$	12,014,466		$	1,690,839
					-
SUPPLEMENTAL DISCLOSURES:
Income tax paid	$	-		$	-
Interest paid	$	-		$	-

TENGJUN BIOTECHNOLOGY CORP. AND SUBSIDIARIES

~~The~~NOTES ~~accompanying~~TO ~~notes are an integral part of these consolidated financial~~CONSOLIDATED ~~statements.~~FINANCIAL STATEMENTS

4(UNAUDITED)

~~TENGJUN BIOTECHNOLOGY~~NOTE ~~CORP~~1. ORGANIZATION AND ~~SUBSIDIARIES~~NATURE OF BUSINESS

~~NOTES~~Tengjun Biotechnology TOCorp. ~~CONSOLIDATED~~(formerly known as China Herb Group Holdings Corporation, the “Company”) was incorporated under the name ~~FINANCIAL~~“Island ~~STATEMENTS~~Radio, Inc.” under the laws of the State of Nevada on June 28, 2010. On December 9, 2019, the Company changed its corporate name to Tengjun Biotechnology Corp. (“Tengjun”).

~~(UNAUDITED)~~Business Combination

~~NOTE~~Tengjunxiang Biotechnology 1Ltd. ~~ORGANIZATION~~(“Tengjunxiang”) ~~AND~~is ~~NATURE~~a OFholding ~~BUSINESS~~company incorporated in the Cayman Islands on July 19, 2021. On August 5, 2021, Tengjunxiang formed a wholly-owned subsidiary, Tengjunxiang Biotechnology HK Limited (“Tengjunxiang HK”), under the laws of Hong Kong. Shandong Minfu Biology Science and Technology Co., Ltd. (“Shandong Minfu”) is a company incorporated under the laws of the People’s Republic of China (the “PRC”) on August 29, 2021. Tengjunxiang HK owns all of the equity interests in Shandong Minfu, a wholly-foreign owned entity formed (“WFOE”) under the laws of PRC.

~~Tengjun~~Shandong Tengjunxiang Biotechnology ~~Corp~~Co., Ltd (~~formerly~~“Shandong ~~known~~Tengjunxiang”) aswas incorporated under the laws of PRC on June 27, 2014. Jinxiang ~~China~~County ~~Herb~~Kanglong ~~Group~~Water ~~Holdings~~Purification ~~Corporation~~Equipment Co., ~~the~~Ltd (“~~Company~~Jinxiang Kanglong”), a wholly-owned subsidiary of Shandong Tengjunxiang, was ~~incorporated~~formed under the ~~name~~laws ~~“Island~~of ~~Radio~~the PRC on January 6, ~~Inc~~2015.” Shandong Tengjunxiang and Jinxiang Kanglong have been under common control. Shandong ~~the~~Tengjunxiang ~~laws~~and ofits ~~the~~subsidiary, ~~State~~Jinxiang ofKanglong ~~Nevada~~are onprimarily ~~June~~engaged 28in processing, ~~2010.~~packaging, Ondistribution ~~December~~and 9sale of dandelion teas, ~~2019~~and producing and sale of water purifiers in China, ~~the~~and ~~Company~~plans ~~changed~~to increase its ~~corporate~~tea ~~name~~processing toand ~~Tengjun~~water ~~Biotechnology~~purifier production lines ~~Corp.~~and ~~(“Tengjun”)~~expand its sales channels in the next one to two years.

~~Business~~On ~~Combination~~December 15, 2021, all shareholders and the Board of Shandong Tengjunxiang agreed to increase its registered capital to RMB 100 million, of which RMB 94.95 million shall be contributed by Shandong Minfu and the remaining RMB 5.05 million shall be contributed by fourteen other shareholders. On December 16, 2021, Tengjunxiang completed its restructuring transaction (the “Restructuring Transaction”). As a result of the Restructuring Transaction, Tengjunxiang, through its subsidiaries, directly owns 94.95% of the ownership of Shandong Tengjunxiang and therefore became the controlling shareholder of Shandong Tengjunxiang.

~~Tengjunxiang~~All ~~Biotechnology~~of ~~Ltd. (“Tengjunxiang”)~~the isentities aof ~~holding company incorporated in~~ the Restructuring ~~Cayman~~Transaction are ~~Islands~~under oncommon ~~July~~control ~~19,~~of ~~2021~~Mr. OnXianchang ~~August 5~~Ma, ~~2021,~~the ~~Tengjunxiang~~controlling ~~formed~~shareholder aof ~~wholly-owned subsidiary~~Tengjunxiang, ~~Tengjunxiang~~before ~~Biotechnology~~and HKafter ~~Limited~~the Restructuring ~~(“Tengjunxiang HK”)~~Transaction, ~~under~~which results in the ~~laws~~consolidation of ~~Hong~~Tengjunxiang ~~Kong.~~and ~~Shandong~~its ~~Minfu~~subsidiaries ~~Biology~~and ~~Science~~has ~~and~~been ~~Technology~~accounted ~~Co.,~~for ~~Ltd.~~as ~~(“Shandong Minfu”) is~~ a ~~company~~reorganization ~~incorporated~~of entities under ~~the~~common ~~laws~~control ofat ~~the~~carrying ~~People’s~~value ~~Republic~~and offor ~~China (~~accounting purpose, the ~~“PRC”)~~reorganization onwas accounted ~~August~~for ~~29,~~as ~~2021~~a recapitalization. ~~Tengjunxiang~~The HKconsolidated ~~owns~~financial ~~all~~statements ofare prepared on the ~~equity~~basis ~~interests~~as inif the ~~Shandong~~Restructuring ~~Minfu,~~Transaction became effective aas ~~wholly-foreign owned~~of ~~entity~~the ~~formed~~beginning ~~(“WFOE”)~~of ~~under~~the first period presented in the ~~laws~~accompanying ofconsolidated ~~PRC~~financial statements.

~~Shandong~~On ~~Tengjunxiang~~December 23, ~~Biotechnology Co.~~2021, the ~~Ltd (“Shandong~~Company ~~Tengjunxiang”)~~entered ~~was~~into ~~incorporated~~a ~~under~~Share ~~the~~Purchase/Exchange ~~laws~~Agreement of(the ~~PRC~~“Share onExchange ~~June~~Agreement”) 27with Tengjunxiang, and ~~2014.~~eleven ~~Jinxiang~~shareholders ~~County~~of ~~Kanglong~~Tengjunxiang ~~Water~~(the ~~Purification Equipment~~“Selling CoShareholders”)., ~~Ltd~~The ~~(“Jinxiang~~Selling ~~Kanglong”),~~Shareholders acollectively ~~wholly-~~owned ~~subsidiary~~100% of all ~~Shandong~~issued and outstanding shares of Tengjunxiang, ~~was~~(the ~~formed~~“Tengjunxiang ~~under~~Shares”). Pursuant to the ~~laws~~Share ofExchange Agreement, the ~~PRC~~Selling onShareholders ~~January~~jointly 6,agreed ~~2015.~~to ~~Shandong~~sell ~~Tengjunxiang~~or ~~and~~transfer ~~Jinxiang~~to ~~Kanglong~~the ~~have~~Company ~~been~~one ~~under~~hundred ~~common~~percent ~~control.~~(100%) ~~Shandong~~of the Tengjunxiang ~~and~~Shares ~~its~~in exchange ~~subsidiary,~~for ~~Jinxiang~~a ~~Kanglong~~total ~~are~~of ~~primarily~~19,285,714 ~~engaged~~shares inof ~~processing,~~the ~~packaging,~~Company’s ~~distribution~~common ~~and~~stock. ~~sale~~As a result of ~~dandelion~~such ~~teas,~~exchange ~~and~~(the ~~producing~~“Stock Exchange”), ~~and~~Tengjunxiang ~~sale~~has ofbecome ~~water~~a ~~purifiers~~wholly-owned insubsidiary ~~China,~~of the Company and ~~plans~~the toSelling ~~increase~~Shareholders ~~its~~collectively ~~tea~~have ~~processing~~received ~~and~~19,285,714 ~~water~~shares of ~~purifier~~the ~~production~~Company’s ~~lines~~common stock, ~~and~~representing ~~expand~~approximately ~~its~~29.53% ~~sales channels~~of in the ~~next~~then ~~one~~issued toand ~~two~~outstanding ~~years~~shares of the Company’s common stock.

OnIn ~~December~~connection with ~~15, 2021, all shareholders and~~ the ~~Board~~ acquisition of ~~Shandong~~ Tengjunxiang ~~agreed~~pursuant to ~~increase~~the ~~its~~Share ~~registered~~Exchange ~~capital to RMB 100 million~~Agreement, ~~of which RMB 94.95 million shall be contributed by Shandong Minfu and~~ the ~~remaining~~Company ~~RMB 5.05 million~~with ~~shall~~its besubsidiaries ~~contributed~~commenced byits ~~fourteen other shareholders.~~business Onoperations ~~December~~in 16processing, ~~2021~~packaging, ~~Tengjunxiang~~distribution ~~completed~~and ~~its~~sale ~~restructuring~~of ~~transaction~~dandelion ~~(the~~teas, ~~“Restructuring~~producing ~~Transaction”).~~and Assale ~~a result~~ of ~~the~~water ~~Restructuring~~purifiers ~~Transaction, Tengjunxiang,~~in China through Tengjunxiang and its subsidiaries, ~~directly~~in ~~owns 94.95%~~the People’s Republic of ~~the~~China. ~~ownership~~The acquisition of ~~Shandong~~ Tengjunxiang ~~and~~is ~~therefore~~treated ~~became~~as ~~the~~a ~~controlling~~reverse ~~shareholder~~acquisition of(the “Reverse ~~Shandong Tengjunxiang~~Acquisition”).

All of the entities of the Restructuring Transaction are under common control of Mr. Xianchang Ma, the controlling shareholder of Tengjunxiang, before and after the Restructuring Transaction, which results in the consolidation of Tengjunxiang and its subsidiaries and has been accounted for as a reorganization of entities under common control at carrying value and for accounting purpose, the reorganization was accounted for as a recapitalization. The consolidated financial statements are prepared on the basis as if the Restructuring Transaction became effective as of the beginning of the first period presented in the accompanying consolidated financial statements.5

~~On December 23, 2021, the Company entered~~Unaudited ~~into~~Interim aFinancial Share Purchase/Exchange Agreement (the “Share Exchange Agreement”) with Tengjunxiang, and eleven shareholders of Tengjunxiang (the “Selling Shareholders”). The Selling Shareholders collectively owned 100% of all issued and outstanding shares of Tengjunxiang (the “Tengjunxiang Shares”). Pursuant to the Share Exchange Agreement, the Selling Shareholders jointly agreed to sell or transfer to the Company one hundred percent (100%) of the Tengjunxiang Shares in exchange for a total of 19,285,714 shares of the Company’s common stock. As a result of such exchange (the “Stock Exchange”), Tengjunxiang has become a wholly-owned subsidiary of the Company and the Selling Shareholders collectively have received 19,285,714 shares of the Company’s common stock, representing approximately 29.53% of the then issued and outstanding shares of the Company’s common stock.Information

InThe accompanying ~~connection~~unaudited interim consolidated financial statements and information have been prepared in accordance with accounting principles generally accepted in the ~~acquisition~~United ofStates ~~Tengjunxiang pursuant~~and toin accordance with the ~~Share~~SEC’s ~~Exchange~~regulations ~~Agreement~~for interim financial information and with the instructions for Form 10-Q. Accordingly, they do not include all of the ~~Company~~information ~~with~~and ~~its~~disclosures ~~subsidiaries~~required ~~commenced~~by ~~its~~accounting ~~business~~principles ~~operations~~generally accepted in ~~processing,~~the ~~packaging, distribution~~United ~~and~~States ~~sale~~for ofcomplete ~~dandelion~~financial ~~teas,~~statements. ~~producing~~In ~~and~~the ~~sale~~opinion of ~~water~~management, ~~purifiers~~these infinancial ~~China~~statements ~~through~~contain ~~Tengjunxiang~~all normal and recurring ~~its~~adjustments ~~subsidiaries~~considered in necessary to present fairly the ~~People~~Company’s ~~Republic~~financial ofposition, ~~China.~~results ~~The acquisition~~ of ~~Tengjunxiang~~operations, iscomprehensive ~~treated~~income, cash asflows, aand ~~reverse~~stockholders’ ~~acquisition~~equity (for the ~~“Reverse~~periods ~~Acquisition”)~~presented.

5These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on April 17, 2023.

~~Unaudited Interim~~NOTE ~~Financial Information~~2. LIQUIDITY

The ~~accompanying unaudited~~Company’s ~~interim consolidated~~ financial statements ~~and~~are ~~information have been~~ prepared inusing ~~accordance~~generally ~~with~~accepted accounting principles ~~generally accepted~~ in the United States ~~and~~of inAmerica ~~accordance~~applicable ~~with~~to ~~the~~a ~~SEC’s regulations for interim financial information and with the instructions for Form~~going ~~10-Q. Accordingly~~concern, ~~they~~which docontemplates ~~not~~the ~~include~~realization ~~all~~ of ~~the~~assets ~~information~~ and ~~disclosures~~the ~~required~~satisfaction byof ~~accounting~~liabilities ~~principles generally accepted~~ in the ~~United~~normal ~~States~~course ~~for~~of ~~complete~~business. ~~financial~~The ~~statements.~~Company has Injust ~~the~~started ~~opinion~~to ofgenerate ~~management,~~revenues ~~these~~and ~~financial~~turned ~~statements~~around ~~contain~~to ~~all~~be ~~normal~~profitable ~~and recurring~~since ~~adjustments~~2022. ~~considered~~As ~~necessary~~of toJune ~~present~~30, ~~fairly~~2023, the Company’s ~~financial~~had ~~position,~~an ~~results~~accumulated profit of ~~operations~~$8,068,592, ~~comprehensive~~working ~~income, cash~~capital ~~flows~~of $6,801,298, and ~~stockholders’~~cash ~~equity~~of ~~for~~$28,077,623 ~~the~~provided ~~periods~~by ~~presented~~operating activities. ~~The~~As ~~results~~of ~~for~~June 30, 2022, the Company ~~three~~had ~~months~~an ~~ended~~accumulated ~~March~~deficit 31of $6,228,771, ~~2023~~and ~~are~~working ~~not~~capital ~~necessarily indicative~~deficit of ~~the~~$14,282,875, ~~results~~and tocash bebalance ~~expected for the full year~~of $6,759,713.

~~These~~The ~~unaudited interim~~Company’s ~~consolidated~~ability ~~financial~~to ~~statements~~continue ~~should~~as a going concern will be ~~read~~dependent inupon ~~conjunction~~its ~~with~~ability ~~the~~to ~~audited~~execute ~~consolidated~~on ~~financial~~its ~~statements~~business ~~and~~plan, ~~related~~including ~~notes~~the ability to generate ~~included~~revenue inand ~~our~~the ~~Annual~~Company’s ~~Report~~ability to raise additional capital. Although no assurances can be given as to the Company’s ability to deliver on ~~Form~~its ~~10-K~~revenue ~~for~~plans or that unforeseen expenses may arise, management has evaluated the ~~year~~significance ~~ended~~of ~~December~~the 31conditions as of June 30, ~~2022~~2023 ~~filed~~and ~~with~~has concluded that due to the ~~Securities~~receipt of the net proceeds from the completion of the Initial Public Offering and ~~Exchange~~cash ~~Commission~~provided by operating activities during the year of 2022 and the first quarter of the year 2023, the Company has sufficient cash on hand to satisfy its anticipated cash requirements for the next twelve months from the issuance ~~April~~of ~~17,~~these ~~2023~~financial statements.

NOTE 2 3. ~~LIQUIDITY~~ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~The Company’s financial statements are~~Basis ~~prepared using generally accepted accounting principles in the United States~~ of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has just started to generate revenues and turned around to be profitable since 2022. During the year ended December 31, 2021, the Company had a net loss of $747,525. As of December 31, 2021, the Company had an accumulated deficit of $3,187,804, working capital deficit of $11,687,585, and cash of $561,297 used in operating activities. For the three months ended March 31, 2023, the Company had a net profit of $390,587. As of March 31, 2023, the Company had an accumulated profit of $8,521,704, working capital of $7,260,671, and cash balance of $12,014,466. Accounting

The ~~Company’s ability to continue as a~~consolidated ~~going~~financial ~~concern~~statements ~~will be dependent upon its ability to execute on its business plan, including the ability to generate revenue~~ and ~~the~~accompanying ~~Company’s ability~~notes toare ~~raise~~prepared ~~additional~~in ~~capital.~~accordance ~~Although~~with noaccounting ~~assurances~~principles ~~can~~generally beaccepted ~~given~~in ~~as to~~ the ~~Company’s~~United ~~ability to deliver on its revenue~~States ~~plans or that unforeseen expenses may arise, management has evaluated the significance~~ of ~~the~~America conditions as of March 31, 2023 and has concluded that due to the receipt of the net proceeds from the completion of the Initial Public Offering and cash provided by operating activities during the year of 2022 and the first quarter of the year 2023, the Company has sufficient cash on hand to satisfy its anticipated cash requirements for the next twelve months from the issuance of these financial statements(“GAAP”).

~~NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING~~Principles ~~POLICIES~~of consolidation

~~Basis~~The consolidated financial statements include the financial statements of ~~Accounting~~Tengjun Biotechnology Corp., Tengjunxiang and its 100% owned subsidiaries, Tengjunxiang HK and WOFE, and its 94.95% owned subsidiaries, Shandong Tengjunxiang and Jinxiang Kanglong. All inter-company transactions and balances are eliminated in consolidation.

~~The~~Use ~~consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States~~ of ~~America (“GAAP”).~~ Estimates

~~Principles~~The preparation of ~~consolidation~~consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. As of June 30, 2023, the Company’s estimates primarily consisted of the allowance for obsolete inventory and impairment assessment on fixed assets and other long-lived assets. These estimates required management’s judgment, and actual results could differ from these estimates.

The consolidated financial statements include the financial statements of Tengjun Biotechnology Corp., Tengjunxiang and its 100% owned subsidiaries, Tengjunxiang HK and WOFE, and its 94.95% owned subsidiaries, Shandong Tengjunxiang and Jinxiang Kanglong. All inter-company transactions and balances are eliminated in consolidation.6

~~Use of Estimates~~Reclassification

~~The preparation of consolidated financial statements~~Certain inclassifications ~~conformity~~have ~~with~~been ~~accounting~~made ~~principles generally accepted in the United States of America requires management~~ to ~~make estimates and assumptions that affect~~ the ~~reported~~prior ~~amounts~~year’s ~~of assets and liabilities and disclosure of contingent assets and liabilities at the date of the~~ financial statements ~~and~~to ~~the~~conform ~~amount~~to ~~of revenues and expenses during~~ the ~~reporting~~current ~~periods.~~year ~~Management makes these estimates using the best information available at the time the estimates are made~~presentation. AsThe ~~of March 31, 2023, the Company’s estimates primarily consisted~~reclassification ofhad ~~the~~no ~~allowance~~impact ~~for obsolete inventory and impairment assessment~~ on ~~fixed~~previously ~~assets~~reported ~~and~~net ~~other~~loss ~~long-lived~~or ~~assets.~~accumulated ~~These estimates required management’s judgment, and actual results could differ from these estimates~~deficit.

6Cash and Cash Equivalents

~~Reclassification~~The Company considers all cash on hand and in banks, certificates of deposit with banks and other highly liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

~~Certain~~Advance ~~classifications have been made~~ to ~~the prior year’s financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net loss or accumulated deficit.~~suppliers

~~Cash~~The Company makes advances to certain vendors for construction and ~~Cash~~purchase ~~Equivalents~~of equipment. The Company had advances to suppliers of $72,272 and $416,911 as of June 30, 2023, and December 31, 2022, respectively. Based on management’s evaluation, no allowance for advances to suppliers was recorded as of June 30, 2023, and December 31, 2022.

The Company considers all cash on hand and in banks, certificates of deposit with banks and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.Inventories

~~Advance~~The toCompany’s inventories ~~suppliers~~primarily consist of dandelion teas and water purifiers. Inventories are valued at the lower of cost (determined on a weighted average basis) and net realizable value. Inventories mainly consist of raw materials, goods in process, and finished goods. The Company reviews its inventories regularly for possible obsolete goods and establishes reserves when determined necessary. Allowance for obsolete inventory as of June 30, 2023, and December 31, 2022, was $0 and $36,299, respectively.

~~The Company makes advances to certain vendors~~Property ~~for construction~~ and purchase of equipment. The Company had advances to suppliers of $85,298,237 and $416,911 as of March 31, 2023 and December 31, 2022, respectively. Based on management’s evaluation, no allowance for advances to suppliers was recorded as of March 31, 2023 and December 31, 2022.Equipment

~~Inventories~~Property and equipment are recorded at cost less accumulated depreciation. Gains or losses on disposals are reflected as gain or loss in the period of disposal. All ordinary repair and maintenance costs are expensed as incurred.

~~The Company’s inventories primarily consist~~Depreciation offor ~~dandelion~~financial ~~teas~~reporting ~~and~~purposes ~~water~~is ~~purifiers. Inventories~~provided ~~are~~using ~~valued at~~ the ~~lower~~straight-line ofmethod ~~cost~~over ~~(determined~~the onestimated auseful ~~weighted~~lives ~~average basis) and net realizable value. Inventories mainly consist~~ of ~~raw~~the materials, goods in process, and finished goods. The Company reviews its inventories regularly for possible obsolete goods and establishes reserves when determined necessary. Allowance for obsolete inventory as of March 31, 2023 and December 31, 2022 was $36,790 and $36,299, respectively.assets:

Property and Equipment

		Estimated Useful Life
Buildings and improvements		3-5 years
Machinery and equipment		3-10 years
Office furniture and equipment		3 years
Vehicles		5 years

~~Property~~Costs ~~and~~incurred in ~~equipment~~constructing ~~are~~new ~~recorded~~facilities, atincluding ~~cost~~progress ~~less accumulated~~payments ~~depreciation.~~and ~~Gains~~other orcosts ~~losses~~related onto ~~disposals~~construction, are ~~reflected~~capitalized asand ~~gain~~transferred orto property, ~~loss~~plant inand ~~the~~equipment ~~period~~on ofcompletion, ~~disposal.~~at ~~All~~which ~~ordinary~~time ~~repair~~depreciation ~~and maintenance costs are expensed as incurred~~commences.

~~Depreciation~~Construction ~~for~~in ~~financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets:~~Progress

		Estimated Useful Life
Buildings and improvements		3-5 years
Machinery and equipment		3-10 years
Office furniture and equipment		3 years
Vehicles		5 years

Construction in progress represents direct costs of construction, interest and design fees incurred. No interest was capitalized for the six months ended June 30, 2023, and 2022. Capitalization of these costs ceases and the construction in progress is transferred to property, plant, and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is recognized until it is completed and ready for intended use. Construction in progress as of June 30, 2023, and December 31, 2022, was $7,846,534 and $7,734,862, respectively.

Costs incurred in constructing new facilities, including progress payments and other costs related to construction, are capitalized and transferred to property, plant and equipment on completion, at which time depreciation commences.7

~~Construction~~Impairment of inLong-lived ~~Progress~~Assets

~~Construction~~The ~~in progress represents direct costs~~Company ofevaluates ~~construction,~~long-lived ~~interest~~assets ~~and~~for ~~design~~impairment ~~fees~~whenever ~~incurred.~~events Noor ~~interest~~changes ~~was~~in ~~capitalized~~circumstances ~~for~~indicate that the ~~three~~carrying ~~months~~amount ~~ended~~of ~~March~~an ~~31,~~asset ~~2023 and 2022. Capitalization~~may ofnot ~~these~~be ~~costs~~recoverable ~~ceases~~through ~~and~~ the ~~construction~~estimated inundiscounted ~~progress~~cash isflows ~~transferred~~expected to ~~property,~~result ~~plant,~~from ~~and~~the ~~equipment~~use ~~when~~and ~~substantially~~eventual ~~all~~disposition of the ~~activities~~assets. ~~necessary~~Whenever toany ~~prepare~~such ~~the~~impairment ~~assets~~exists, ~~for~~an ~~their~~impairment ~~intended~~loss ~~use~~will ~~are~~be ~~completed.~~recognized Nofor ~~depreciation~~the isamount ~~recognized~~by ~~until~~which itthe iscarrying ~~completed~~value ~~and~~exceeds ~~ready~~the ~~for~~fair ~~intended use~~value. ~~Construction~~Based inon ~~progress~~management’s asevaluation, no impairment of ~~March~~long-live ~~31,~~assets ~~2023~~was ~~and~~recognized ~~December~~for ~~31,~~the ~~2022~~six ~~was~~months ~~$8,146,134~~ended ~~and~~June 730,~~734~~ 2023,~~862,~~ and ~~respectively~~2022.

7Value added tax (“VAT”)

~~Impairment~~All ~~of Long~~China-~~lived~~based enterprises ~~Assets~~are subject to a VAT imposed by the PRC government on their domestic product sales and services. The Company’s subsidiaries in the PRC are subject to VAT at rates ranging from 0% to 17% on proceeds received from customers and are entitled to a deduction for VAT already paid or borne on the products purchased by them. The VAT payable will be presented on the balance sheets when input VAT is less than the output VAT. Receivable balance, prepaid VAT, will be presented on the balance sheets when input VAT is larger than the output VAT.

~~The Company evaluates long-lived assets for impairment~~Advances ~~whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result~~ from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. Based on management’s evaluation, no impairment of long-live assets was recognized for the three months ended March 31, 2023 and 2022. customers

~~Value~~Payments received ~~added~~before ~~tax~~all ~~(“VAT”)~~the relevant criteria for revenue recognition are satisfied are recorded as advance from customers. When all revenue recognition criteria are met, the advances from customers are recognized as revenue.

~~All China-based enterprises are subject to a~~Revenue VAT imposed by the PRC government on their domestic product sales and services. The Company’s subsidiaries in the PRC are subject to VAT at rates ranging from 0% to 17% on proceeds received from customers, and are entitled to a deduction for VAT already paid or borne on the products purchased by them. The VAT payable will be presented on the balance sheets when input VAT is less than the output VAT. Receivable balance, prepaid VAT, will be presented on the balance sheets when input VAT is larger than the output VAT.Recognition

~~Advances~~The Company recognizes revenue in accordance with ASC Topic 606, Revenue from ~~customers~~Contracts with Customers. To determine the revenue to be recognized, the Company applies the following five-step model:

~~Payments~~● ~~received~~identify ~~before~~arrangements ~~all~~with ~~the relevant criteria for revenue recognition are satisfied are recorded as advance from~~ customers~~. When all revenue recognition criteria are met, the advances from customers are recognized as revenue.~~;

~~Revenue~~● ~~Recognition~~identify performance obligations;

~~The~~● ~~Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. To~~ determine ~~the~~transaction ~~revenue to be recognized, the Company applies the following five-step model:~~price;

● ~~identify~~allocate ~~arrangements~~transaction ~~with~~price ~~customers~~to the separate performance obligations in the arrangement, if more than one exists; and

● ~~identify~~recognize revenue as performance obligations; are satisfied.

●The ~~determine~~Company generates ~~transaction~~revenues ~~price;~~mainly from sales of packaged dandelion teas and water purifiers. The Company is also engaged in the sale of certain nutraceutical products and water treatment accessories. Revenue from the sales of goods is recognized when the control over the promised goods is transferred to customers.

●Cash ~~allocate~~payments received ~~transaction~~or ~~price~~due tofrom ~~the~~customers ~~separate~~before ~~performance~~revenue ~~obligations~~recognized inare ~~the~~recorded ~~arrangement,~~as ifadvances ~~more~~from ~~than~~customers. ~~one~~The ~~exists;~~advance ~~and~~from customers is recognized as revenue when the Company’s performance obligation is completed.

●Cost of ~~recognize~~goods ~~revenue as performance obligations are satisfied.~~sold

~~The~~Cost ~~Company~~of goods ~~generates~~sold ~~revenues~~consists ~~mainly~~primarily ~~from sales~~ of ~~packaged~~cost ~~dandelion~~of ~~teas~~goods ~~and~~purchased, ~~water~~direct ~~purifiers.~~raw ~~The~~material ~~Company~~cost, isdirect ~~also~~labor ~~engaged~~cost, inand ~~the~~cost ~~sale~~ of ~~certain~~manufacturing ~~nutraceutical products and water treatment~~overheads ~~accessories.~~including ~~Revenue from~~ the ~~sales~~depreciation of ~~goods~~production ~~is recognized when the control over the promised goods is transferred to customers~~equipment.

~~Cash payments received or due from customers~~Selling ~~before~~and ~~revenue~~marketing ~~recognized are recorded as advances from customers. The advance from customers is recognized as revenue when the Company’s performance obligation is completed.~~expenses

~~Cost~~Selling and marketing expenses primarily consist of ~~goods~~advertising ~~sold~~costs, agency fees, costs for promotional materials, and commission costs made to sales force. The selling and marketing expenses for the three months ended June 30, 2023, and 2022 were $0 and $42,952,863, respectively. The selling and marketing expenses for the six months ended June 30, 2023, and 2022 were $7,077,178 and $46,310,836, respectively.

~~Cost of goods sold consists primarily of cost of goods purchased, direct raw material cost, direct labor cost, and cost of manufacturing overheads including the depreciation of production equipment.~~8

~~Selling~~ General and ~~marketing~~administrative expenses

~~Selling~~ General and ~~marketing~~administrative expenses primarily consist of ~~advertising~~payroll ~~costs,~~and ~~agency~~benefit ~~fees,~~ costs for ~~promotional~~corporate ~~materials~~employees, ~~and~~legal, ~~commission~~consulting, ~~costs~~professional ~~made to sales force. The selling and marketing~~ expenses ~~for the three months ended March 31~~, rental ~~2023~~expenses and ~~2022~~other ~~were~~corporate ~~$7,077,178~~overhead ~~and $3,357,973, respectively~~costs.

8Concentration of Credit Risk

~~General~~The operations of the Company are primarily in the PRC. Accordingly, the Company’s business, financial condition, and ~~administrative~~results ~~expenses~~of operations may be influenced by the political, economic, and legal environments in the PRC, and by the general state of the PRC economy.

~~General~~The Company has cash on hand and ~~administrative~~demand ~~expenses~~deposits ~~primarily consist~~in ofaccounts ~~payroll~~maintained ~~and~~with ~~benefit~~state-owned ~~costs~~banks ~~for~~within ~~corporate~~the ~~employees,~~PRC. ~~legal,~~Cash ~~consulting,~~in ~~professional~~state-owned ~~expenses~~banks is covered by insurance up to RMB 500,000 ($72,500) ~~rental~~per ~~expenses~~bank. ~~and~~The ~~other~~Company ~~corporate~~has not experienced any losses in such accounts and believes ~~overhead~~they ~~costs~~are not exposed to any risks with their cash in these bank accounts.

~~Concentration~~The Company generated total revenue of ~~Credit~~$0 ~~Risk~~and $8,516,646 during the three and six months ended June 30, 2023. No customer accounted for over 10% of total revenue during the three and six months ended June 30, 2023.

~~The~~During ~~operations of~~ the ~~Company are primarily in~~ ~~the~~three ~~PRC.~~and ~~Accordingly,~~six ~~the~~months ~~Company’s~~ended ~~business~~June 30, ~~financial condition~~2023, ~~and results of operations may be influenced by~~ the ~~political, economic,~~Company ~~and~~had ~~legal~~one ~~environments~~supplier inthat ~~the~~accounted ~~PRC,~~for ~~and~~100% ~~by the general state~~ of ~~the~~its ~~PRC~~total ~~economy~~purchase.

~~The~~During ~~Company~~the ~~has~~three ~~cash on hand~~ and ~~demand~~six ~~deposits in~~months ~~accounts~~ended ~~maintained~~June ~~with~~30, ~~state-owned~~2022, ~~banks within~~ the ~~PRC.~~Company ~~Cash in state-owned banks is covered by insurance up to RMB 500,000 ($72,500)~~had ~~per~~two ~~bank.~~major ~~The~~suppliers ~~Company~~that ~~has~~accounted ~~not~~for ~~experienced~~over ~~any~~10% ~~losses~~of inits ~~such~~total ~~accounts and believes they are not exposed to any risks with their cash in these bank accounts~~purchases.

The Company generated total revenue of $8,516,646 during the three months ended March 31, 2023. No customer accounted for over 10% of total revenue during the three months ended March 31, 2023.

	For the Three Months Ended June 30,		For the Three Months Ended June 30,		% of total
Supplier	2023		2022		purchase
A	$	143,818				100	%
B		*	$	1,005,275		82	%
C		*	$	227,376		18	%

For the Company’s water purifier business segment, the Company purchases total inventory of $380,471 from one supplier during the three months ended March 31, 2023. One supplier accounted for over 100% of the Company’s total purchases.

	For the Six Months Ended June 30,		For the Six Months Ended June 30,		% of total
Supplier	2023		2022		purchase
A	$	524,289				100	%
B		*	$	1,005,275		82	%
C		*	$	227,376		18	%

	March 31,		% of total
Supplier	2023		purchase
A	$	380,471		100	%

Income Taxes

~~For~~The Company accounts for income taxes using an asset and liability approach which allows for the ~~dandelion~~recognition ~~teas~~and ~~business~~measurement ~~segment,~~of nodeferred ~~supplier~~tax assets ~~accounted~~based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for ~~over 10%~~the net tax effects of ~~total~~temporary ~~purchase~~differences ~~during~~between the ~~three~~carrying ~~months~~amounts ~~ended~~of ~~March~~assets 31and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, ~~2023~~or that future deductibility is uncertain.

~~Income~~Under ~~Taxes~~ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred.

The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.9

~~Under~~Related ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred.parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.

~~The Company follows ASC 850, “Related Party~~Foreign ~~Disclosures,”~~Currency for the identification of related parties and disclosure of related party transactions. Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.Translation

9The Company uses the United States dollar (“U.S. dollars”) for financial reporting purposes. The functional currency of the Company and its subsidiaries is the Chinese Yuan or Renminbi (“RMB”). The Company’s subsidiaries maintain their books and records in their functional currency, being the primary currency of the economic environment in which their operations are conducted. For the Company and its subsidiaries whose functional currencies are other than the U.S. dollar, all asset and liability accounts were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at the historical rates and items in the income statement and cash flow statements are translated at the average rate in each applicable period. Translation adjustments resulting from this process are included in the accumulated other comprehensive income in the statement of shareholders’ equity. The resulting translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

~~Foreign~~The ~~Currency~~following exchange ~~Translation~~rates were used to translate the amounts from RMB into United States dollars (“USD$”) for the prospective periods:

The Company uses the United States dollar (“U.S. dollars”) for financial reporting purposes. The functional currency of the Company and its subsidiaries is the Chinese Yuan or Renminbi (“RMB”). The Company’s subsidiaries maintain their books and records in their functional currency, being the primary currency of the economic environment in which their operations are conducted. For the Company and its subsidiaries whose functional currencies are other than the U.S. dollar, all asset and liability accounts were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at the historical rates and items in the income statement and cash flow statements are translated at the average rate in each applicable period. Translation adjustments resulting from this process are included in the accumulated other comprehensive income in the statement of shareholders’ equity. The resulting translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

	June 30,		June 30,
	2023		2022

Period End Exchange Rate (RMB/USD)		7.2688		6.6981
Average Period Exchange Rate (RMB/USD)		6.9294		6.4791

~~The following exchange rates were used to translate~~Fair ~~the~~Values ~~amounts~~of ~~from~~Financial ~~RMB into United States dollars (“USD$”) for the prospective periods:~~Instruments

	March 31,		March 31,
	2023		2022
Period End Exchange Rate (RMB/USD)		6.8717		6.5518
Average Period Exchange Rate (RMB/USD)		6.8476		6.4817

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

~~Fair~~Level ~~Values~~1 – ofquoted ~~Financial~~prices ~~Instruments~~in active markets for identical assets or liabilities.

~~ASC~~Level ~~820 defines fair value as the exchange price~~2 ~~that~~– ~~would~~quoted beprices ~~received~~ for ansimilar ~~asset~~assets orand ~~paid~~liabilities ~~to transfer a liability (an exit price)~~ in ~~the~~active ~~principal~~markets or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs ~~and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs~~ that ~~may~~are ~~be used to measure fair value:~~observable.

Level 1 3 – ~~quoted~~inputs ~~prices~~that inare ~~active markets for identical assets or liabilities~~unobservable.

~~Level~~The 2Company’s financial –instruments ~~quoted~~primarily ~~prices~~consist of cash and cash equivalents, advances to suppliers, prepaid expenses, other receivable, accounts payable, accrued expenses, other payables, and related party borrowings. As for ~~similar~~the ~~assets~~balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheets. This is attributed to the short maturities of the instruments and ~~liabilities~~that ininterest ~~active~~rates ~~markets~~on orthe ~~inputs~~borrowings approximate those that ~~are~~would ~~observable~~have been available for loans of similar remaining maturity and risk profile at respective balance sheet dates.

~~Level 3 – inputs that are unobservable.~~Lease

The Company~~’s financial instruments primarily~~ ~~consist~~adopted ofFASB ~~cash~~Accounting ~~and~~Standards ~~cash equivalents~~Codification, ~~advances~~Topic ~~to suppliers~~842, ~~prepaid~~Leases ~~expenses,~~(“ASC ~~other~~842”) ~~receivable,~~using ~~accounts payable, accrued expenses, other payables, and related party borrowings. As for~~ the ~~balance~~modified ~~sheet~~retrospective ~~dates~~approach, electing the ~~estimated~~practical ~~fair~~expedient ~~values~~that ofallows the ~~financial~~Company ~~instruments were~~ not ~~materially~~to ~~different~~restate ~~from~~its ~~their~~comparative ~~carrying~~periods ~~values~~prior ~~as presented on the balance sheets. This is attributed~~ to the ~~short~~adoption ~~maturities~~ of the ~~instruments~~standard ~~and that interest rates~~ on ~~the borrowings approximate those that would have been available for loans of similar remaining~~January ~~maturity~~1, ~~and risk profile at respective balance sheet dates~~2019.

~~Lease~~10

The ~~Company~~new leasing ~~adopted~~standard ~~FASB~~requires ~~Accounting~~recognition ~~Standards Codification,~~of ~~Topic~~leases ~~842,~~on ~~Leases~~the consolidated balance sheets as right-of-use (“~~ASC 842~~ROU”) ~~using~~assets and lease liabilities. ROU assets represent the ~~modified~~Company’s ~~retrospective~~right ~~approach,~~to ~~electing~~use underlying assets for the ~~practical~~lease ~~expedient~~terms ~~that allows~~and lease liabilities represent the Company’s ~~not~~obligation to ~~restate~~make ~~its~~lease ~~comparative~~payments ~~periods~~arising ~~prior~~from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. The Company’s future minimum based payments used to determine the ~~adoption~~Company’s lease liabilities mainly include minimum based rent payments. As most of the ~~standard~~Company’s onleases ~~January~~do 1not provide an implicit rate, ~~2019~~the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The ~~new~~adoption of ~~leasing~~ASC ~~standard~~842 ~~requires~~had ~~recognition of~~no ~~leases~~material impact on the Company’s consolidated balance sheets, asresults ~~right-~~of~~-use~~ ~~(“ROU”)~~operations ~~assets~~or ~~and~~cash ~~lease liabilities~~flows. ~~ROU~~In ~~assets represent the~~addition, ~~Company’s~~the ~~right~~adoption toof ~~use~~ASC ~~underlying~~842 ~~assets~~did ~~for~~not ~~the~~result ~~lease~~in ~~terms~~a ~~and~~cumulative-effect ~~lease~~adjustment ~~liabilities~~to ~~represent~~ the ~~Company’s~~opening ~~obligation~~balance ~~to make~~of ~~lease~~retained ~~payments~~earnings ~~arising~~(accumulated ~~from the leases~~deficit). Operating lease ~~ROU~~cost ~~assets~~is ~~and~~recognized ~~operating~~as ~~lease~~a ~~liabilities~~single ~~are~~lease ~~recognized~~cost ~~based~~ on ~~the~~a ~~present value~~straight-line ~~and~~basis ~~future minimum lease payments~~ over the lease term atand ~~commencement~~is ~~date.~~recorded ~~The~~in ~~Company’s~~selling, ~~future~~general and ~~minimum~~administrative ~~based~~expenses. Variable lease payments ~~used to~~for ~~determine~~common ~~the~~area ~~Company’s~~maintenance, ~~lease~~property ~~liabilities~~taxes ~~mainly~~and ~~include~~other ~~minimum~~operating ~~based~~expenses ~~rent~~are ~~payments.~~recognized as Asexpense ~~most~~in ofthe period when the ~~Company’s~~changes ~~leases do~~in ~~not~~facts ~~provide~~and ancircumstances ~~implicit~~on ~~rate,~~which the ~~Company~~variable ~~uses~~lease ~~its~~payments ~~estimated~~are ~~incremental~~based ~~borrowing~~occur. ~~rate~~The ~~based~~Company current ondoes ~~the~~not ~~information~~have ~~available~~any atoperating ~~commencement date~~or infinancing ~~determining~~leases ~~the~~that ~~present~~last ~~value~~for ofmore ~~lease~~than ~~payments~~twelve months.

10Segment Reporting

~~The adoption of~~ ASC ~~842 had no material impact~~Topic ~~on the Company’s consolidated balance sheets~~280, ~~results~~“Segment ~~of operations or cash flows. In addition~~Reporting,” ~~the~~requires ~~adoption~~use of ~~ASC 842 did not result in a cumulative-effect adjustment to~~ the ~~opening~~“management ~~balance~~approach” ofmodel ~~retained~~for ~~earnings~~segment ~~(accumulated deficit)~~reporting. ~~Operating~~The ~~lease~~management approach ~~cost~~model is ~~recognized as~~based ~~a single lease cost~~ on ~~a straight-line basis over~~ the ~~lease~~way ~~term~~a ~~and~~company’s ischief ~~recorded~~operating indecision ~~selling,~~maker ~~general~~organizes ~~and~~segments ~~administrative~~within ~~expenses. Variable~~the ~~lease~~Company ~~payments~~ for ~~common~~making ~~area maintenance, property taxes and other~~ operating ~~expenses are recognized as expense in the period~~ ~~when~~decisions ~~the~~assessing ~~changes~~performance ~~in facts~~ and ~~circumstances~~allocating onresources. ~~which~~Reportable ~~the~~segments ~~variable lease payments~~ are based ~~occur.~~on ~~The~~products ~~Company~~and ~~current~~services, ~~does~~geography, ~~not~~legal ~~have any~~structure, ~~operating~~management structure, or ~~financing~~any ~~leases~~other ~~that~~manner ~~last~~in ~~for~~which ~~more~~management ~~than~~disaggregates ~~twelve~~a ~~months~~company.

~~Segment~~The ~~Reporting~~Company manages its business in two operating segments, dandelion teas and water purifier, all of which are located in the PRC. All of its revenues are derived from the PRC. All long-lived assets are located in PRC.

~~ASC~~The ~~Topic~~Company’s sale ~~280,~~of ~~“Segment~~dandelion ~~Reporting,” requires~~teas ~~use~~is ofaffected by the ~~“management~~dandelion ~~approach”~~plants’ ~~model~~life cycle. A dandelion plant’s life cycle generally consists of five main stages and its leaves, flowers, and roots are not ready for ~~segment~~production ~~reporting.~~of ~~The~~teas ~~management~~until ~~approach~~May ~~model~~of iseach ~~based~~year. onTherefore, ~~the~~if ~~way~~the aCompany ~~company’s~~does ~~chief~~not ~~operating~~have ~~decision~~enough ~~maker~~storage ~~organizes~~of ~~segments~~the ~~within~~previous ~~the~~year’s ~~Company~~dandelion ingredients for ~~making~~producing ~~operating~~teas, ~~decisions~~it ~~assessing~~will ~~performance~~have no sales for the first and ~~allocating~~second ~~resources~~quarter. ~~Reportable~~As ~~segments~~a ~~are~~result, ~~based~~for onthe ~~products~~three and ~~services,~~six ~~geography,~~months ~~legal~~ended ~~structure~~June 30, ~~management structure~~2023, ~~or any~~the ~~other~~Company ~~manner~~had inno ~~which~~sales ~~management~~of ~~disaggregates~~dandelion ~~a company~~teas.

The ~~Company manages its business in two operating~~following ~~segments, dandelion~~table ~~teas~~shows ~~and~~the ~~water~~Company’s ~~purifier,~~operations ~~all~~by ofbusiness ~~which~~segment ~~are~~for ~~located in~~ the ~~PRC.~~three ~~All~~and ofsix ~~its~~months ~~revenues~~ended ~~are~~June ~~derived~~30, ~~from~~2023, ~~the~~and ~~PRC. All long-lived assets are located in PRC.~~2022:

The Company’s sale of dandelion teas is affected by the dandelion plants’ life cycle. A dandelion plant’s life cycle generally consists of five main stages and its leaves, flowers, and roots are not ready for production of teas until May of each year. Therefore, if the Company does not have enough storage of the previous year’s dandelion ingredients for producing teas, it will have no sales for the first quarter. As a result, for the three months ended March 31, 2023, the Company had no sales of dandelion teas.

	For the Three months Ended
	June 30,			June 30,
	2023			2022
Net revenue
Dandelion teas	$	-		$	51,444,665
Water purifier		-			(154,203	)
Total revenues, net	$	-		$	51,290,462

Cost of goods sold
Dandelion teas	$	-		$	3,456,644
Water purifier		10,170			(17,695	)
Total cost of goods sold	$	10,170		$	3,438,949

Gross profit
Dandelion teas	$	-		$	47,988,021
Water purifier		(10,170	)		(136,508	)
Gross profit	$	(10,170	)	$	47,851,513

Operating expenses
Dandelion teas	$	-		$	43,288,325
Water purifier		417,334			(143,925	)
Total operating expenses	$	417,334		$	43,144,400

Income (loss) from operations
Dandelion teas	$	-		$	4,699,696
Water purifier		(427,504	)		7,417
Income (loss) from operations	$	(427,504	)	$	4,707,113

~~The following table shows the Company’s operations by business segment for the three months ended March 31, 2023 and 2022:~~11

	For the
	For the Six months Ended
	Three Months Ended
	June 30,		June 30,
	March 31,		March 31,
	2023		2022
Net revenue
Dandelion teas	$	-	$	354,~~463~~908,~~678~~343
Water purifier		8,516,646		~~820~~666,~~436~~233
Total revenues, net	$	8,516,646	$	455,~~284~~574,~~114~~576
Cost of goods sold
Dandelion teas	$	-	$	~~273~~3,~~847~~730,491
Water purifier		~~521~~531,~~648~~818		9678,~~217~~522
Total cost of goods sold	$	~~521~~531,~~648~~818	$	~~370~~3,~~064~~809,013
Gross profit
Dandelion teas	$	-	$	351,~~189~~177,~~831~~852
Water purifier		7,~~994~~984,~~998~~828		~~724~~587,~~219~~711
Gross profit	$	7,~~994~~984,~~998~~828	$	351,~~914~~765,~~050~~563
Operating expenses
Dandelion teas	$	-	$	246,~~901~~259,~~127~~134
Water purifier		7,~~419~~836,~~012~~346		~~687~~429,~~185~~482
Total operating expenses	$	7,~~419~~836,~~012~~346	$	346,~~588~~688,~~312~~616
Income (loss) from operations
Dandelion teas	$	-	$	~~288~~4,~~704~~918,718
Water purifier		~~575~~148,~~986~~482		37158,~~034~~229
Income (loss) from operations	$	~~575~~148,~~986~~482	$	~~325~~5,~~738~~076,947

11The following table shows the Company’s assets by business segment as of June 30, and December 31, 2022:

The following table shows the Company’s assets by business segment as of March 31, and December 31, 2022:

	June 30,		December 31,
Segment assets	2023		2022
Dandelion teas	$	-	$	8,326,875
Water purifier		8,516,646		50,302,625
Total assets	$	8,516,646	$	58,629,500

	March 31,		December 31,
Segment assets	2023		2022
Dandelion teas	$	1,739,212	$	8,326,875
Water purifier		172,181,959		50,302,625
Total assets	$	173,921,171	$	58,629,500

Income (Loss) per Share Calculation

~~Income~~Basic net income (~~Loss~~loss) per ~~Share~~common ~~Calculation~~ share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings (loss) per shares is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.

Basic net income (loss) per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings (loss) per shares is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.12

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the standard will have on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which provides guidance on the acquirer’s accounting for acquired revenue contracts with customers in a business combination. The amendments require an acquirer recognizes and measures contract assets and contract liabilities acquired in a business combination at the acquisition date in accordance with ASC 606 as if it had originated the contracts. This guidance also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. The new guidance is required to be applied prospectively to business combinations occurring on or after the date of adoption. This guidance is effective for the Company for the year ending March 31, 2024, and interim reporting periods during the year ending March 31, 2024. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on the financial position, results of operations and cash flows.

12NOTE 4. INVENTORIES, NET

~~NOTE~~Inventories consisted 4.of ~~INVENTORIES,~~the ~~NET~~following:

Inventories consisted of the following:

	June 30,		December 31,
	2023		2022
Raw materials	$	257,146	$	266,725
Work in process		273,397		203,257
Finished goods		1,817,590		567,346
		2,348,133		1,037,328
Less: allowance for obsolete inventories		-		(36,299	)
Inventories, net	$	2,348,133	$	1,001,028

	March 31,			December 31,
	2023			2022
Raw materials	$	272,006		$	266,725
Work in process		265,517			203,257
Finished goods		563,760			567,346
		1,101,283			1,037,328
Less: allowance for obsolete inventories		(36,790	)		(36,299	)
Inventories, net	$	1,064,493		$	1,001,028

NOTE 5. PROPERTY, PLANT, AND EQUIPMENT, NET

~~NOTE~~Property, plant, 5.and ~~PROPERTY,~~equipment ~~PLANT,~~consisted ~~AND~~of ~~EQUIPMENT,~~the ~~NET~~following:

Property, plant, and equipment consisted of the following:

	June 30,			December 31,
	2023			2022
Buildings	$	13,827		$	14,431
Machinery and equipment		974,880			619,839
Office equipment		168,496			135,313
Vehicles		764,218			805,135
		1,921,421			1,574,718
Less: Accumulated depreciation		(1,304,283	)		(1,249,157	)
Property and equipment, net	$	617,138		$	325,561

	March 31,			December 31,
	2023			2022
Buildings	$	14,626		$	14,431
Machinery and equipment		638,595			619,839
Office equipment		203,474			135,313
Vehicles		816,020			805,135
		1,672,715			1,574,718
Less: Accumulated depreciation		(1,311,097	)		(1,249,157	)
Property and equipment, net	$	361,618		$	325,561

Depreciation expenses for the three months ended June 30, 2023, and 2022 were $32,157 and $79,830, respectively.

Depreciation expenses for the ~~three~~six months ended ~~March~~ 31June 30, 2023, and 2022 were $4557,~~210~~577 and $84163,~~111~~941, respectively.

~~NOTE 6. OTHER RECEIVABLE~~13

~~Other~~NOTE ~~receivable~~6. ~~consisted~~OTHER ~~of the following on March 31, 2023 and December 31, 2022:~~RECEIVABLE

	March 31,		December 31,
	2023		2022
Loans to sales agents	$	64,479,862	$	41,775,015
Prepaid Expenses		1,185		4,740
Security deposit		5,600		5,600
Other		430		423
Total	$	64,487,077	$	41,785,778

Other receivable consisted of the following on June 30, 2023, and December 31, 2022:

During the year ended 31, 2022, the Company made loans to various individual sales agents in the aggregate amount of $41,775,015 pursuant to the agreements with each of the sales agents. The loans were made to each of the sales agents for the purpose of market expansion, and all loans shall be repaid in full before December 31, 2023. These loans are unsecured and bear no interest. During the three months ending March 31, 2023, approximately $39,178,129 of the $41,775,015 loans were repaid and the remaining $2,596,886 of the loan shall be repaid before December 31, 2023.

	June 30,		December 31,
	2023		2022
Loans to sales agents	$	400,024,068	$	41,775,015
Prepaid Expenses		-		4,740
Security deposit		5,600		5,600
Other		-		423
Total	$	400,029,668	$	41,785,778

InDuring ~~addition, during~~ the year ~~three months~~ ended 31, ~~2023~~ 2022, the Company ~~also~~made ~~issued new~~ loans to various individual sales agents in the aggregate amount of $6141,~~882~~775,~~976~~ 015 pursuant to the ~~new~~ agreements with each of the sales agents. The loans were made to each of the sales agents for the purpose of market expansion, and ~~all~~ all loans shall be repaid in full before December 31, 2023. These loans are unsecured and bear no interest. During the six months ending June 30, 2023, approximately $39,178,129 was repaid and the remaining $2,596,886 of the loan shall be repaid before December 31, 2023.

13NOTE 7. ACCRUED LIABILITIES AND OTHER PAYABLES

~~NOTE~~Accrued liabilities 7.and ~~ACCRUED~~other ~~LIABILITIES~~payables ~~AND~~consisted ~~OTHER~~of ~~PAYABLES~~the following on June 30, 2023, and December 31, 2022:

Accrued liabilities and other payables consisted of the following on March 31, 2023 and December 31, 2022:

	June 30,			December 31,
	2023			2022
Accrued local taxes	$	25,198,322		$	22,796,102
Advance from employees		(9,654	)		36,139
Accrued payroll		13,140			15,213
Accrued professional fees		-			274,779
Total	$	25,201,808		$	23,122,233

	March 31,		December 31,
	2023		2022
Accrued local taxes	$	19,635,456	$	22,796,102
Advance from employees		-		36,139
Accrued payroll		15,419		15,213
Accrued professional fees		237,074		274,779
Total	$	19,887,949	$	23,122,233

NOTE 8. INCOME TAX

~~NOTE 8. INCOME TAX~~United States

The Company was incorporated in the United States of America and is subject to United States federal taxation. The U.S. Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21%.

Cayman Islands

Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.

Hong Kong

Tengjunxiang HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% on its taxable income generated from operations in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Additionally, payments of dividends by the subsidiary incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax.

PRC

Effective on January 1, 2008, the PRC Enterprise Income Tax Law, EIT Law, and Implementing Rules impose ana unified enterprise income tax rate of 25% on all domestic-invested enterprises and foreign investment enterprises in PRC, unless they qualify under certain limited exceptions. As such, starting from January 1, 2008, the Company’s subsidiaries in PRC are subject to an enterprise income tax rate of 25%. The Company had recorded income tax provision of negative $32,~~442,767~~264 and $92503,~~955~~231 for the three months ended ~~March~~June 3130, 2023, and 2022. The Company had recorded income tax provision of $189,547 and $596,186 for the six months ended June 30, 2023, and 2022.

The following table summarizes the income from operations before income taxes by jurisdiction:

	For the Three Months Ended March 31,
	For the Six months Ended June 30,
	2023			2022
United States	$	~~(160,443~~-	)	$	~~(44,096~~-	)
China		~~742~~(2,~~841~~264	)		~~369~~596,~~858~~186
Total	$	~~582~~(2,~~398~~264	)	$	~~325~~596,~~762~~186

14Provision for income tax expense (benefit) consists of the following:

~~Provision~~The ~~for~~following table summarizes a reconciliation of income tax expense ~~(benefit)~~for ~~consists of~~operations, calculated at the ~~following:~~U.S. statutory federal income tax rate of 21% to total income tax expense (benefit):

	For the Three Months Ended March 31,
	For the Six months Ended June 30,
	2023			2022
Current Tax Expense
Income tax expense at federal statutory rate		21.0	%	$	21.0	%
U.S Federal	$	-		$	-
Increases/(decreases) due to:
China		191,811			92,955
Foreign tax rate differential		4.1	%		4.1	%
Total current tax expense		191,811			92,955
Change in valuation allowance		0.5			0.5	%
Deferred tax expense (benefit)
Effective tax rate		12.0	%		12.0	%
U.S Federal		-			-
Foreign		-			-
Total deferred tax expense (benefit)		-			-
Income tax expense	$	191,811		$	92,955

~~The following table summarizes a reconciliation of income tax expense for operations, calculated at the U.S. statutory federal income tax rate of 21% to total income tax expense (benefit):~~15

	For the Three Months Ended March 31,
	2023			2022
Income tax expense at federal statutory rate	$	122,303		$	68,410
Increases/(decreases) due to:
Foreign tax rate differential		35,815			15,285
Change in valuation allowance		33,693			9,260
Total income tax expense, net	$	191,811		$	92,955
Effective tax rate		32.93	%		28.53	%

The Company periodically evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent that the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.

~~The~~As ~~Company~~of ~~periodically evaluates the likelihood~~June of30, ~~the~~2023, ~~realization~~and ofDecember ~~deferred~~31, ~~tax~~2022, ~~assets~~based ~~and~~on ~~adjusts~~ the ~~carrying~~weight ~~amount~~ of ~~the~~available ~~deferred~~evidence, ~~tax~~including ~~assets~~cumulative bylosses ~~the~~in ~~valuation~~recent ~~allowance~~years toand ~~the~~expectations ~~extent~~of ~~that the~~ future ~~realization~~taxable ofincome, the ~~deferred~~Company ~~tax~~determined ~~assets~~that isit ~~not~~was ~~judged to be~~ more likely than not. ~~The~~that ~~Company considers many factors when assessing the likelihood of future realization of~~ its deferred tax assets, ~~including~~of ~~its~~USA ~~recent~~would ~~cumulative~~not ~~earnings~~be ~~experience by~~realized ~~taxing~~and ~~jurisdiction,~~have ~~expectations~~a 100% ofvaluation ~~future~~allowance ~~taxable~~associated ~~income~~with orits ~~loss,~~deferred ~~the carryforward periods available to the Company for~~ tax ~~reporting purposes, and other relevant factors~~assets.

AsNOTE of9. ~~March~~RISKS ~~31,~~AND 2023 and December 31, 2022, based on the weight of available evidence, including cumulative losses in recent years and expectations of future taxable income, the Company determined that it was more likely than not that its deferred tax assets of USA would not be realized and have a 100% valuation allowance associated with its deferred tax assets. CONTINGENCIES

~~NOTE 9. RISKS AND CONTINGENCIES~~Covid-19

~~Covid~~The global outbreak of the COVID-19 pandemic is having a significant negative impact on the global economy, which has adversely affected the Company’s business and financial results. Starting in late January 2020, the COVID-19 pandemic triggered a series of lockdowns, social distancing requirements and travel restrictions that have significantly and negatively affected, and may continue to negatively affect, our businesses in China. The Company had suspended its normal business operations from early 2020 and did not generate any revenue in the year 2021. The COVID-19 pandemic also presented and may continue to present challenges to the Company’s business operations as well as the business operations of the Company’s merchants, business partners and other participants in the Company’s ecosystem, such as closure of offices and facilities, disruptions to or even suspensions of normal business and logistics operations, as well as restrictions on travel. It is not possible to determine the ultimate impact of the COVID-19 pandemic on the Company’s business operations and financial results, which is highly dependent on numerous factors, including the duration and spread of the pandemic and any resurgence of the COVID-19 pandemic in China or elsewhere, actions taken by governments, the response of businesses and individuals to the pandemic, the impact of the pandemic on business and economic conditions in China, consumer demand, the Company’s ability and the ability of sales agents, logistics service providers and other participants in the Company’s ecosystem to continue operations in areas affected by the pandemic. The COVID-19 pandemic may continue to adversely affect the Company’s business and results of operations.

~~The global outbreak of the COVID-19 pandemic~~Concentration is having a significant negative impact on the global economy, which has adversely affected the Company’s business and financial results. Starting in late January 2020, the COVID-19 pandemic triggered a series of lockdowns, social distancing requirements and travel restrictions that have significantly and negatively affected, and may continue to negatively affect, our businesses in China. The Company had suspended its normal business operations from early 2020 and did not generate any revenue in the year 2021. The COVID-19 pandemic also presented and may continue to present challenges to the Company’s business operations as well as the business operations of the Company’s merchants, business partners and other participants in the Company’s ecosystem, such as closure of offices and facilities, disruptions to or even suspensions of normal business and logistics operations, as well as restrictions on travel. It is not possible to determine the ultimate impact of the COVID-19 pandemic on the Company’s business operations and financial results, which is highly dependent on numerous factors, including the duration and spread of the pandemic and any resurgence of the COVID-19 pandemic in China or elsewhere, actions taken by governments, the response of businesses and individuals to the pandemic, the impact of the pandemic on business and economic conditions in China, consumer demand, the Company’s ability and the ability of sales agents, logistics service providers and other participants in the Company’s ecosystem to continue operations in areas affected by the pandemic. The COVID-19 pandemic may continue to adversely affect the Company’s business and results of operations.Risk

15For the water purifier business segment, the Company relied on one supplier that represented 100% of the total purchases, during the three and six months ended June 30, 2023. In the event of losing the one vendor without alternative providers, the Company’s water purifier business will be materially and adversely affected.

~~Concentration~~NOTE ~~Risk~~10. RELATED PARTY TRANSACTIONS AND BALANCES

~~For~~The ~~the water purifier business segment, the~~related ~~Company~~party ~~relied on one supplier that represented 100%~~ of the ~~total~~company ~~purchases,~~with ~~during~~whom ~~the~~transactions ~~three~~are ~~months~~reported ~~ended~~in ~~March~~these ~~31,~~financial ~~2023.~~statements Inare ~~the event~~as ~~of losing the one vendor without alternative providers, the Company’s water purifier business will be materially and adversely affected.~~follows:

~~NOTE~~Name ~~10.~~of ~~RELATED~~Individual ~~PARTY~~Relationship ~~TRANSACTIONS~~with ~~AND~~the ~~BALANCES~~Company Xianchang Ma Major shareholder, CEO, director of the Company Liuhong Liu Beneficial owner of the Company’s common stock Pan Shi Beneficial owner of the Company’s common stock Jin Tian Beneficial owner of the Company’s common stock Qiuping Lu Shareholder, former director, and CEO

~~The related party of the company with whom transactions are reported in these financial statements are as follows:~~16

~~Name~~Due offrom ~~Individual~~related Relationship with the Company Xianchang Ma Major shareholder, CEO, director of the Company Liuhong Liu Beneficial owner of the Company’s common stock Pan Shi Beneficial owner of the Company’s common stock Jin Tian Beneficial owner of the Company’s common stock Qiuping Lu Shareholder, former director and CEOparty:

Due from related party:

	June 30,		December 31,
	2023		2022

Pan Shi	$	84,714	$	84,714
Xianchang Ma		2,851,703		4,450,000
Total	$	2,936,417	$	4,534,714

	March 31,		December 31,
	2023		2022
Pan Shi	$	85,859	$	84,714
Xianchang Ma		2,463,287		4,450,000
Total	$	2,549,146	$	4,534,714

Due from related party represent advances to its related parties for working capital purpose and receivable from the related party for investment purpose.

Due ~~from related party represent advances~~ to ~~its~~ related parties ~~for working capital purpose and receivable from the related party for investment purpose.~~:

Due to related parties:

	June 30,		December 31,
	2023		2022

Xianchang Ma	$	7,341,141	$	14,992,431
Qiuping Lu		96		96
Pan Shi		307		307
Jin Tian		62		62
	$	7,341,606	$	14,992,896

	March 31,		December 31,
	2023		2022
Xianchang Ma	$	14,941,380	$	14,992,431
Qiuping Lu		96		96
Pan Shi		311		307
Jin Tian		63		62
	$	14,941,850	$	14,992,896

Due to related parties represent advances from its related parties for the Company’s payment for construction, purchase of equipment, and daily operating expenses. The balances are unsecured, non-interest bearing, and payable on demand.

~~Due to related parties represent advances from~~NOTE ~~its related parties for the Company’s payment for construction, purchase of equipment, and daily operating expenses~~11. ~~The balances are unsecured, non-interest bearing, and payable on demand.~~EQUITY

~~NOTE~~Preferred ~~11. EQUITY~~Stock

~~Preferred~~The ~~Stock~~total number of preferred shares authorized that may be issued by the Company is 5,000,000 shares with par value of $0.001 per share.

~~The~~As ~~total number~~ of ~~preferred shares authorized~~June ~~that~~30, ~~may~~2023, beand ~~issued~~December by31, 2022, the Company ishad ~~5,000,000~~no shares ~~with~~of ~~par~~its ~~value~~preferred ofstock ~~$0.001 per~~issued ~~share~~and outstanding.

~~As of March 31, 2023 and December 31, 2022, the~~Common ~~Company had no shares of its preferred stock issued and outstanding.~~Stock

16The total number of common shares authorized that may be issued by the Company was 70,000,000 shares with a par value of $0.001 per share. On March 30, 2022, the board of directors of the Company adopted a resolution to increase its authorized capital from 70,000,000 to 200,000,000 shares of its common stock by amending and restating the Company’s articles of incorporation. As of June 30, 2023, the Company had a total of 79,519,994 restricted common stock shares and a total of 21,191,202 unrestricted common stock shares.

~~Common Stock~~17

~~The total number of~~Common ~~common~~Stock ~~shares~~Issued ~~authorized~~for ~~that~~Reverse may be issued by the Company was 70,000,000 shares with a par value of $0.001 per share. On March 30, 2022, the board of directors of the Company adopted a resolution to increase its authorized capital from 70,000,000 to 200,000,000 shares of its common stock by amending and restating the Company’s articles of incorporation. On March 31, 2022, the Company decided to remove restrictive legend from 9,908,465 shares of common stock, $0.001 par value per share, held by the Company’s twelve unrelated shareholders in accordance with Section 4(a)(1) of the Security Act of 1933. On March 24, 2023, the Company removed restrictive legend from 6,580,710 shares of common stock, $0.001 par value per share, held by the Company’s fourteen unrelated shareholders in accordance with Rule 144. As of March 31, 2023, the Company had a total of 79,519,994 restricted common stock shares and a total of 19,789,175 unrestricted common stock shares.Merger

~~Common~~On ~~Stock~~December 23, ~~Issued~~2021, ~~for~~pursuant ~~Reverse~~to ~~Merger~~the Share Exchange Agreement with Tengjunxiang (see Note 1), the Company issued 19,285,714 shares of its common stock to eleven Selling Shareholders of Tengjunxiang.

On ~~December 23~~July 7, ~~2021~~2022, ~~pursuant to~~ the ~~Share~~Company ~~Exchange Agreement~~sold ~~with~~an ~~Tengjunxiang~~aggregate ~~(see Note 1), the Company issued~~of 1925,~~285~~000,~~714~~000 shares of its common stock toat a price of $0.10 ~~eleven Selling~~per share to unrelated ~~Shareholders~~nine ofinvestors ~~Tengjunxiang~~pursuant to the signed stock purchase agreements.

On ~~July 7~~October 4, 2022, the Company sold an aggregate of 256,000,000 shares of its common stock at a price of $0.1005 per share, to ~~unrelated~~two ~~nine~~ investors pursuant to the ~~signed~~restricted stock agreements with the investors. Of a total of 6,000,000 shares of the common stock sold, 4,000,000 shares were sold to one of the two investors who was a former officer of the Company. As of June 30, 2023, all 6,000,000 common stock shares ~~purchase~~were ~~agreements~~issued and outstanding.

~~On October 4, 2022, the Company sold an aggregate~~Common ~~of 6,000,000 shares~~Stock ofIssued its common stock at a price of $0.05 per share, to two investors pursuant to the restricted stock agreements with the investors. Of a total of 6,000,000 shares of the common stock sold, 4,000,000 shares were sold to one of the two investors who was a former officer of the Company. The Company received advance payments of $300,000 from the two investors in September 2022 and recognized the advance payment as subscribed stock on ~~September~~Initial ~~30,~~Closing ~~2022. As~~ of ~~March~~Public ~~31, 2023, all 6,000,000 common stock shares were issued and outstanding.~~Offering

~~Common~~On ~~Stock~~January 9, ~~Issued~~2023, the company conducted its initial closing for the public offering of its common stock (the “initial closing”) pursuant to the Company’s registration statement on Form S-1 initially filed with the SEC on July 22, 2022 and declared effective on November 4, 2022, whereby the Company sold 3,000,000 shares of common stock shares at $1.00 per share for total purchase price of $3,000,000 (the “Initial Closing ofAmount”) from the investors. The initial Closing amount equals to the minimum offering ~~Public~~amount ~~Offering~~as set forth in the Registration Statement. As of June 30, 2023, all 3,000,000 common stock shares were issued and outstanding.

~~On January 9, 2023, the company conducted its~~Additional initial closing for the public offering of its common stock (the “initial closing”) pursuant to the Company’s registration statement on Form S-1 initially filed with the SEC on July 22, 2022 and declared effective on November 4, 2022, whereby the Company sold 3,000,000 shares of common stock shares at $1.00 per share for total purchase price of $3,000,000 (the “Initial Closing ~~Amount”) from the investors. The initial Closing amount equals to the minimum offering amount as set forth in the Registration Statement. As~~ of ~~March~~ ~~31,~~Public ~~2023, all 3,000,000 common stock shares were issued and outstanding.~~ Offering

~~Subscribed~~On ~~Stock~~May 3, 2023, the Company conducted an additional closing of the public offering pursuant to the Company’s registration statement on Form S-1 initially filed with the SEC July 22, 2022, and declared effective on November 4, 2022, whereby the Company sold 1,402,027 shares of common stock shares at $1.00 per share for total purchase price of $1,402,027 from the investors.

~~As of December 31, 2022, the Company received~~NOTE ~~a total advance payment of $2,751,828 from the investors and recognized the proceed of $2,751,828 as subscribed stock~~12. ~~Subscribed stock shares of~~ ~~2,751,828~~SUBSEQUENT ~~were issued on January 9, 2023 and outstanding as of March 31, 2023.~~ EVENTS

InManagement has ~~January~~evaluated ~~2023,~~subsequent ~~pursuant~~events tothrough the ~~Company’s registration~~date ~~statement,~~on which the ~~Company~~financial ~~offered~~statements anare ~~additional~~available ~~29,582 shares~~to ofbe ~~common stock at $1~~issued.~~00 per~~ ~~share~~All ~~for~~subsequent aevents ~~total purchase~~requiring ~~price~~recognition ofas ~~$29,582. As~~ of ~~March~~June 3130, 2023, ~~the~~have ~~Company~~been ~~received~~incorporated ainto ~~total~~these ~~advance~~financial ~~payment~~statements ofand ~~$29,582 from~~there ~~the~~is ~~investors~~one ~~and~~subsequent ~~recognized~~event that requires ~~the~~disclosure ~~proceed~~in ofaccordance ~~$29~~with FASB ASC Topic 855,~~582 as~~ ~~subscribed~~“Subsequent ~~stock~~Events. ”

~~NOTE~~Mr. 12Xianchang Ma, the Chief Executive Officer, Chief Financial Officer, and Director of the Company, passed away on August 3, 2023. ~~SUBSEQUENT~~ ~~EVENTS~~Mr. Ma served on the Board of the Company since December 2019. The Company will update stockholders of further developments in this regard.

~~Additional Closing of Public Offering~~18

On May 3, 2023, the Company conducted an additional closing of the public offering pursuant to the Company’s registration statement on Form S-1 initially filed with the SEC July 22, 2022 and declared effective on November 4, 2022, whereby the Company sold 1,402,027 shares of common stock shares at $1.00 per share for total purchase price of $1,402,027 from the investors.

Management has evaluated subsequent events through the date on which the financial statements are available to be issued. All subsequent events requiring recognition as of March 31, 2023 have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the results of operations and financial condition should be read in conjunction with our consolidated financial statements and notes thereto included in Item 1 of this part. This report, including the information incorporated by reference, contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. The use of any of the words “believe,” “expect,” “anticipate,” “plan,” “estimate,” and similar expressions are intended to identify such statements. Forward-looking statements include statements concerning our possible or assumed future results. The actual results that we achieve may differ materially from those discussed in such forward-looking statements due to the risks and uncertainties described in the Risk Factors section of this report, in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in other sections of this report, as well as in our annual report on Form 10-K. We undertake no obligation to update any forward-looking statements.

Results of Operations ~~- Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022~~

~~The~~Results ~~following~~of ~~table~~Operations ~~sets~~- ~~forth~~Three ~~information~~Months ~~from~~Ended ~~our~~June ~~statements~~30, of2023, ~~comprehensive~~Compared ~~income~~to ~~for~~Three ~~the~~Months ~~three~~Ended ~~months~~June ~~ended March 31~~30, ~~2023 and~~ 2022:

	Three Months Ended
	March 31,						Change
	2023			2022			(Amount)			(Percent)
Sales revenue	$	8,516,646		$	4,284,114		$	4,232,532			99	%
Cost of Goods Sold		(521,648	)		(370,064	)		(151,584	)		41	%
Gross Profit		7,994,998			3,914,050			4,080,948			104	%
Operating Expenses		(7,419,012	)		(3,588,312	)		(3,830,700	)		107	%
Operating Income (Loss)		575,986			325,738			250,248			77	%
Interest Income (Expense)		11,892			24			11,868			49,450	%
Other Income (Expense)		(5,480	)		-			(5,480	)		*	%
Income Tax Provision (Benefit)		(191,811	)		(92,955	)		(98,856	)		106	%
Net Income (Loss)		390,587			232,807			157,780			68	%
Comprehensive Income (loss)	$	518,119		$	223,369		$	294,750			132	%

The following table sets forth information from our statements of comprehensive income for the six months ended June 30, 2023, and 2022:

	Three Months Ended
	June 30,						Change
	2023			2022			(Amount)			(Percent)
Sales revenue	$	-		$	51,290,462		$	(51,290,462	)		(100.00	)%
Cost of Goods Sold		10,170			3,438,949			(3,428,779	)		(99.70	)%
Gross Profit		(10,170	)		47,851,513			(47,861,683	)		(100.02	)%
Operating Expenses		417,334			43,221,797			(42,804,463	)		(99.03	)%
Operating Income (Loss)		(427,504	)		4,629,716			(5,057,200	)		(109.23	)%
Interest Income (Expense)		9,540			7,397			2,143			28.97	%
Other Income (Expense)		(51,000	)		(74	)		(50,926	)		68818.92	%
Income Tax Provision (Benefit)		(2,264	)		503,231			(505,495	)		(100.45	)%
Net Income (Loss)		(466,700	)		4,133,808			(4,580,508	)		(110.81	)%
Comprehensive Income (loss)	$	(2,598,439	)	$	4,087,307		$	(6,685,746	)		(163.57	)%

Revenues

Our total revenue for the three months ended ~~March~~June 3130, 2023, was $80,~~516,646,~~ as compared to $451,~~284~~290,~~114~~462 for the three months ended ~~March~~June 3130, 2022, representing an ~~increase~~a decrease of $451,~~232~~290,~~532~~462 or 99100%. The revenue ~~increase~~ decrease was primarily attributed to ~~the~~that ~~increase~~management detected an error in ~~sales~~the ofrevenue ~~water~~recognition ~~purifiers~~and decided not to recognize any revenue in this quarter. During the three months ended ~~March~~June 3130, 2023, sales of dandelion teas ~~were $0, constituting 0% of the total revenue for the quarter,~~ and ~~sales of~~ water purifiers generated $~~8,516,646~~0 in revenue~~, representing 100% of the total revenue for the quarter~~. During the three months ended ~~March~~ 31June 30, 2022, sales of dandelion teas generated $351,~~463~~444,~~678~~665 in revenue, constituting approximately ~~80.8~~100% of the total revenue for the quarter, and sales of water purifiers generated $~~820~~154,~~436~~203 in ~~revenue~~loss, representing approximately ~~19.2~~ 0% of the total revenue for the quarter.

The following is the sales breakdown by segment during the three months ended ~~March~~June 3130, 2023, and 2022:

	For the three months ended
	For the three months ended June 30,
	March 31,
	2023				2022
Dandelion teas	$	-	-	%	$	351,~~463~~444,~~678~~665		~~80.8~~100	%
Water purifier		~~8,516,646~~-	~~100.0~~-	%		~~820~~(154,~~436~~203	)	~~19.2~~0	%
Total	$	~~8,516,646~~-	~~100.0~~-	%	$	451,~~284~~290,~~114~~462		100.0	%

1819

The sales of dandelion teas for the three months ended ~~March~~June 3130, 2023, were $0, as compared to $351,~~463~~444,~~678~~665 for the three months ended ~~March~~June 3130, 2022, representing a decrease of $351,~~463~~444,~~678~~665 or 100%. The decrease in sales of dandelion teas was mainly due to the ~~impact~~fact ofthat ~~the~~management ~~dandelion~~detected ~~plants’ life~~an ~~cycle, which generally consists of five main stages. Dandelion plants’ leaves, flowers, and roots are not ready for production~~error ~~of teas until May of each year. We had sales of dandelion teas~~ in ~~amount of $3,463,678 during~~ the ~~three~~revenue ~~months~~recognition ~~ended~~and ~~March~~decided ~~31,~~not ~~2022~~to ~~because we~~recognize ~~sold~~any ~~the~~revenue ~~products~~ in ~~inventory~~this ~~from prior years before our business was temporarily suspended due to COVID-19~~quarter. ~~The Company’s dandelion tea inventories were sold out by the end of last year. Therefore, for the three months ended March 31, 2023, we had no sales of dandelion teas.~~

The sales of water purifiers for the three months ended ~~March~~June 3130, 2023, were $80,~~516,646,~~ as compared to $~~820~~154,~~436~~203 loss for the three months ended ~~March~~June 3130, 2022, representing an increase of $7154,~~696,210~~203 or ~~938~~100%. The ~~increase~~negative inbalance ~~sales~~as of ~~water~~June ~~purifiers~~30, 2022, was ~~mainly~~primarily ~~driven~~due byto ~~consumers’~~the ~~higher~~sales ~~demand~~returns. ~~for~~Additionally, ~~the~~as of ~~products~~June 30, ~~the~~2023,management ~~growth~~detected ofan ~~our~~error ~~sales~~in ~~agents,~~the revenue recognition and ~~increased~~decided ~~product~~not ~~promotion~~to ~~events~~recognize any revenue in this quarter.

Cost of Goods Sold

Our total cost of goods sold was $~~521~~10,~~648~~170 for the three months ended ~~March~~June 3130, 2023, as compared to $~~370~~3,~~064~~438,949 for the three months ended ~~March~~June 3130, 2022, representing ana ~~increase~~decrease of $~~151~~3,~~584~~428,779 or 4199.019%. The ~~increase~~decrease in our total cost of goods sold was mainly ~~due~~caused toby the ~~increase~~fact that management detected an error in the ~~cost~~revenue ofrecognition ~~goods~~and ~~sold of~~decided ~~water~~not ~~purifiers~~to recognize any revenue in this quarter. During the three months ended ~~March~~June 3130, 2023, cost of sales of dandelion teas was $0, constituting 0.0% of the total cost of goods sold, and cost of sales of water purifiers was $~~521~~10,~~648~~170, constituting 100.0% of the total cost of goods sold of the quarter. During the three months ended ~~March~~June 3130, 2022, cost of sales of dandelion teas was $~~273~~3,~~847~~456,644, constituting approximately ~~74.0~~101% of the total cost of goods sold, and cost of sales of water purifiers was $96(17,~~217~~695), constituting approximately ~~26.0~~negative 1% of the total cost of goods sold of the quarter ending ~~March~~June 3130, 2022.

The following is the cost of goods sold breakdown by segment during the three months ended ~~March~~June 3130, 2023, and 2022:

	For the three months ended
	For the three months ended June 30,
	March 31,
	2023				2022
Dandelion teas	$	-	-0	%	$	~~273~~3,~~847~~456,644		~~74.0~~101	%
Water purifier		~~521~~10,~~648~~170	100.0	%		96(17,~~217~~695	)	~~26.0~~(1	)%
Total	$	~~521~~10,~~648~~170	100.0	%	$	~~370~~3,~~064~~438,949		100.0	%

During the three months ended ~~March~~June 3130, 2023, cost of sales of dandelion teas were $0 as compared to $~~273~~3,~~847~~456,644 for the three months ended ~~March~~June 3130, 2022, representing a decrease of $~~273~~3,~~847~~456,644 or 100%, because of no sales during the three months ended ~~March~~June 3130, 2023.

During the three months ended ~~March~~June 3130, 2023, cost of sales of water purifiers were $~~521~~10,~~648~~170, as compared to $96(17,~~217~~695) for the three months ended ~~March~~June 3130, 2022, representing an increase of $~~425~~27,~~431~~865 or ~~442~~157.247%. The ~~increase~~negative inbalance ~~the~~as ~~cost~~ of ~~sales~~June of30, ~~water~~2022, ~~purifiers~~ was ~~mainly~~primarily due to ~~the~~sales ~~increased~~returns ~~sales~~and no such inevents ~~the~~had ~~quarter~~occurred ~~ending~~as ~~March~~of 31June 30, 2023.

Gross Profit

Our ~~gross~~loss ~~profit~~ was $710,~~994,998~~ 170 and our profit was $347,~~914~~851,~~050~~513 for the three months ended ~~March~~June 3130, 2023, and 2022, respectively. Our gross profit decreased by $47,841,343 or 100% during the three months ended June 30, 2023, compared to the same period in 2022. The decrease was mainly caused by the fact that management detected an error in the revenue recognition and decided not to recognize any revenue in this quarter.

~~Our~~During the three months ended June 30, 2023, and 2022, the gross profit ~~increased by~~as $4a percentage of net revenue for the dandelion teas was 0% and 100%,~~080~~ respectively,~~948~~ orand the ~~104~~gross profit as a percentage of net revenue for the water purifiers was approximately 100% ~~during~~and 0%, respectively. The gross profit as a percentage of net revenue for dandelion teas decreased 100% for the three months ended ~~March~~June 3130, 2023, as compared to the same period in 2022 due to zero sales of dandelion teas in this quarter. The gross profit ~~increase~~as ~~was~~a percentage of net revenue for water purifiers increased ~~mainly~~92.55% ~~due~~for the three months ended June 30, 2023, as compared to the ~~increase~~same period in ~~gross~~2022, ~~profit~~driven ofby ~~water~~decreased ~~purifiers~~costs incurred in purchasing materials.

~~During~~The ~~the~~following ~~three months~~table ~~ended~~presents ~~March 31, 2023 and 2022, the~~ gross profit ~~as a percentage of net revenue for the Dandelion teas was 0.0%~~ and ~~92.1%, respectively, and the~~ gross profit asmargin aby ~~percentage~~segment ~~of net revenue~~ for the ~~Water purifiers was approximately 93.9% and 88.3%, respectively. The gross profit as a percentage of net revenue for dandelion teas decreased 92.1% for the~~ three months ended ~~March~~June 3130, 2023, asand ~~compared to the same period in~~ 2022 due to zero sales of dandelion teas in this quarter. The gross profit as a percentage of net revenue for water purifiers increased 5.6% for the three months ended March 31, 2023, as compared to the same period in 2022, driven by decreased costs incurred in purchasing materials.:

	For the three months ended June 30,
	2023					2022
Dandelion teas	$	-		0	%	$	47,988,021		100	%
Water purifier		(10,170	)	100	%		(136,508	)	(0	)%
Total	$	(10,170	)	100	%	$	47,851,513		100	%

The following table presents gross profit and gross profit margin by segment for the three months ended March 31, 2023 and 2022:

	For the three months ended
	March 31,
	2023				2022
Dandelion teas	$	-	-	%	$	3,189,831	92.1	%
Water purifier		7,994,998	93.9	%		724,219	88.3	%
Total	$	7,994,998	93.9	%	$	3,914,050	91.4	%

Selling and Marketing Expenses

Our selling and marketing expenses primarily consist of sales commission, advertising, and product promotional expenses.

Our selling and marketing expenses were $~~7,077,178~~0 for the three months ended ~~March~~June 3130, 2023, as compared to $342,~~357~~952,~~973~~863 for the three months ended June ~~March 31~~30, 2022, representing ana ~~increase~~decrease of $342,~~719~~952,~~205~~863 or ~~110.8~~100%. Such ana ~~increase~~decrease was mainly driven by ana ~~increase~~decrease in sales commission, ~~because~~since management ofdetected an error in the revenue recognition and decided not to recognize ~~increase~~any revenue in ~~sales~~this quarter.

General and administrative expenses

Our general and administrative expenses primarily consist of payroll and benefit costs for corporate employees, legal, consulting, professional expenses, rental expenses, and other corporate overhead costs.

The general and administrative expenses were $~~341~~417,~~834~~334 for the three months ended ~~March~~June 3130, 2023, as compared to $~~230~~268,~~339~~934 for the three months ended ~~March~~June 3130, 2022, representing an increase of $~~111~~148,~~495~~400 or 4855.418%. Such an increase was mainly caused by the increase in accounting, legal and stock transfer agent fees that were associated with the Company’s SEC reporting and public disclosures, and the increase in the Company’s office rental expenses.

Interest income (expense)

Interest income was $119,~~892~~540 for the three months ended ~~March~~June 3130, 2023, as compared to interest loss of $247,397 for the three months ended ~~March~~June 3130, 2022. Our total interest income increased by $112,~~868~~143 or ~~49450~~28.097% during the three months ended ~~March~~June 3130, 2023, compared to the same period in 2022. The increase in in interest income was primarily due to the interest earned from the Company’s bank savings accounts.

Other income (expense)

Other expense consists of miscellaneous non-operating cost. The other expense was $551,~~480~~000 for the three months ended ~~March~~June 3130, 2023., ~~There~~as ~~was~~compared noto ~~other~~$74 ~~income or expenses~~ for the three months ended ~~March~~June 3130, 2022, representing an increase of $50,926 or 68818.92%. The increase was primarily due to the company has borne some of the handling fees for customers receiving advance payments.

Income tax provision

Income tax provision was negative $~~191~~2,~~811~~264 for the three months ended ~~March~~June 3130, 2023, as compared to $92503,~~955~~231 for the three months ended ~~March~~June 3130, 2022. Our income ~~tax~~ tax provision ~~increased~~decreased by $98505,~~856~~495 or ~~106~~100.345% during the three months ending ~~March~~June 3130, 2023, compared to the same period in 2022. The ~~increase~~ decrease in income tax provision was primarily due to the ~~increase~~decrease in income from operations during the three months ended ~~March~~June 3130, 2023.

Net Income (Loss)

Our net ~~income~~loss was $~~390~~466,~~587~~700 for the three months ended ~~March~~June 3130, 2023, as compared to net income of $~~232~~4,~~807~~133,808 for the three months ended ~~March~~June 3130, 2022, ~~increased~~ decreased by $~~157~~4,~~780~~600,508 or 67 111.829%, because of the above factors.

Foreign Currency Translation Loss

We had a foreign currency translation ~~gain~~loss of $~~127~~2,~~532~~131,739 during the three months ended ~~March~~June 3130, 2023, as compared to foreign currency translation loss of $946,~~438~~501 currency loss during the three months ended ~~March~~June 3130, 2022, reflecting a change of $~~136~~2,~~970~~085,238 or ~~1451~~4484.329%. Such an increase in foreign currency translation ~~gain~~ loss was primarily caused by the currency exchange rate fluctuation.

Results of Operations - Six Months Ended June 30, 2023, Compared to Six Months Ended June 30, 2022

The following table sets forth information from our statements of comprehensive income for the six months ended June 30, 2023, and 2022:

	Six Months Ended
	June 30,						Change
	2023			2022			(Amount)			(Percent)
Sales revenue	$	8,516,646		$	55,574,576		$	(47,057,930	)		(84.68	)%
Cost of Goods Sold		531,818			3,809,013			(3,277,195	)		(86.04	)%
Gross Profit		7,984,828			51,765,563			(43,780,735	)		(84.58	)%
Operating Expenses		7,836,346			46,810,109			(38,973,763	)		(83.26	)%
Operating Income (Loss)		148,482			4,955,454			(4,806,972	)		(97.00	)%
Interest Income (Expense)		21,432			7,421			14,011			188.80	%
Other Income (Expense)		(56,480	)		(74	)		(56,406	)		76224.32	%
Income Tax Provision (Benefit)		189,547			596,186			(406,639	)		(68.21	)%
Net Income (Loss)		(76,113	)		4,366,615			(4,442,728	)		(101.74	)%
Comprehensive Income (loss)	$	(2,080,320	)	$	4,310,676		$	(6,390,996	)		(148.26	)%

Revenues

Our total revenue for the six months ended June 30, 2023, was $8,516,646, as compared to $55,574,576 for the six months ended June 30, 2022, representing a decrease of $47,057,930 or 84.68%. The revenue decrease was primarily attributed to the fact that management detected an error in the revenue recognition and decided not to recognize any revenue in this quarter. During the six months ended June 30, 2023, sales of dandelion teas were $0, constituting 0% of the total revenue for the quarter, and sales of water purifiers generated $8,516,646 in revenue, representing 100% of the total revenue for the quarter. During the six months ended June 30, 2022, sales of dandelion teas generated $54,908,343 in revenue, constituting approximately 99% of the total revenue for the quarter, and sales of water purifiers generated $666,233 in revenue, representing approximately 1% of the total revenue for the quarter.

The following is the sales breakdown by segment during the six months ended June 30, 2023, and 2022:

	For the six months ended June 30,
	2023				2022
Dandelion teas	$	-	0	%	$	54,908,343	99	%
Water purifier		8,516,646	100	%		666,233	1	%
Total	$	8,516,646	100	%	$	55,574,576	100	%

The sales of dandelion teas for the six months ended June 30, 2023, were $0, as compared to $54,908,343 for the six months ended June 30, 2022, representing a decrease of $54,908,343 or 100%. The decrease in sales of dandelion teas is primarily attributed to the fact that management detected an error in the revenue recognition and decided not to recognize any revenue in this quarter.

The sales of water purifiers for the six months ended June 30, 2023, were $8,516,646, as compared to $666,233 for the six months ended June 30, 2022, representing an increase of $7,850,413 or 1178.32%. The increase in sales of water purifiers was mainly driven by consumers’ higher demand for the products, the growth of our sales agents, and increased product promotion events.

Cost of Goods Sold

Our total cost of goods sold was $531,818 for the six months ended June 30, 2023, as compared to $3,809,013 for the six months ended June 30, 2022, representing a decrease of $3,277,195 or 86.04%. The decrease in our total cost of goods sold was mainly due to the decrease in sales. During the six months ended June 30, 2023, cost of sales of dandelion teas was $0, constituting 0% of the total cost of goods sold, and cost of sales of water purifiers was $531,818, constituting 100% of the total cost of goods sold of the quarter. During the six months ended June 30, 2022, cost of sales of dandelion teas was $3,730,491, constituting approximately 98% of the total cost of goods sold, and cost of sales of water purifiers was $78,522, constituting approximately 2% of the total cost of goods sold of the quarter ending June 30, 2022.

The following is the cost of goods sold breakdown by segment during the six months ended June 30, 2023, and 2022:

	For the six months ended June 30,
	2023				2022
Dandelion teas	$	-	0	%	$	3,730,491	98	%
Water purifier		531,818	100	%		78,522	2	%
Total	$	531,818	100	%	$	3,809,013	100	%

During the six months ended June 30, 2023, cost of sales of dandelion teas were $0 as compared to $3,730,491 for the six months ended June 30, 2022, representing a decrease of $3,730,491 or 100%. The decrease is attributed to the fact that management detected an error in the revenue recognition and decided not to recognize any revenue in this quarter.

because of no sales during the six months ended June 30, 2023.

During the six months ended June 30, 2023, cost of sales of water purifiers were $531,818, as compared to $78,522 for the six months ended June 30, 2022, representing an increase of $453,296 or 577.29%. The increase in cost of sales of water purifiers was mainly due to the increased sales in the quarter ending June 30, 2023.

Gross Profit

Our gross profit was $7,984,828 and $51,765,563 for the six months ended June 30, 2023, and 2022, respectively.

Our gross profit decreased by $43,780,735 or 84.58% during the six months ended June 30, 2023, compared to the same period in 2022. The gross profit decrease was mainly caused by the fact that management detected an error in the revenue recognition and decided not to recognize any revenue in this quarter.

During the six months ended June 30, 2023, and 2022, the gross profit as a percentage of net revenue for the Dandelion teas was 0% and 99%, respectively, and the gross profit as a percentage of net revenue for the Water purifiers was approximately 100% and 1%, respectively. The gross profit as a percentage of net revenue for dandelion teas decreased 92.1% for the six months ended June 30, 2023, as compared to the same period in 2022 due to zero sales of dandelion teas in this quarter. The gross profit as a percentage of net revenue for water purifiers increased 1258.63% for the six months ended June 30, 2023, as compared to the same period in 2022, driven by decreased costs incurred in purchasing materials and increased demand.

The following table presents gross profit and gross profit margin by segment for the six months ended June 30, 2023, and 2022:

	For the six months ended June 30,
	2023				2022
Dandelion teas	$	-	0	%	$	51,177,852	99	%
Water purifier		7,984,828	100	%		587,711	1	%
Total	$	7,984,828	100	%	$	51,765,563	100	%

Selling and Marketing Expenses

Our selling and marketing expenses primarily consist of sales commission, advertising, and product promotional expenses.

Our selling and marketing expenses were $7,077,178 for the six months ended June 30, 2023, as compared to $46,310,836 for the six months ended June 30, 2022, representing a decrease of $39,233,658 or 84.72%. Such a decrease was mainly driven by the decrease in sales commission as a result of the decrease in sales.

General and administrative expenses

The general and administrative expenses were $759,168 for the six months ended June 30, 2023, as compared to $499,273 for the six months ended June 30, 2022, representing an increase of $259,895 or 52.05%. Such an increase was mainly caused by the increase in accounting, legal and stock transfer agent fees that were associated with the Company’s SEC reporting and public disclosures, and the increase in the Company’s office rental expenses.

Interest income (expense)

Interest income was $21,432 for the six months ended June 30, 2023, as compared to $7,421 for the six months ended June 30, 2022. Our total interest income increased by $14,011 or 188.80% during the six months ended June 30, 2023, compared to the same period in 2022. The increase in interest income was primarily due to the interest earned from the Company’s bank savings accounts.

Other income (expense)

Other expense consists of miscellaneous non-operating cost. The other expense was $56,480 for the six months ended June 30, 2023, as compared to $74 for the six months ended June 30, 2022, representing an increase of $56,406 or 76224.32%. The increase was primarily due to the company’s incurring bank fees in receiving the advances from customers.

Income tax provision

Income tax provision was $189,547 for the six months ended June 30, 2023, as compared to $596,186 for the six months ended June 30, 2022. Our income tax provision decreased by $406,639 or 68.21% during the six months ending June 30, 2023, compared to the same period in 2022. The decrease in income tax provision was primarily due to the decrease in sales during the six months ended June 30, 2023.

Net Income (Loss)

Our net loss was $76,113 for the six months ended June 30, 2023, as compared to net income $4,366,615 for the six months ended June 30, 2022, decreased by $4,442,728 or 101.74%, because of the above factors.

Foreign Currency Translation Loss

We had a foreign currency translation loss of $2,004,207 during the six months ended June 30, 2023, as compared to foreign currency translation loss of $55,939 currency loss during the six months ended June 30, 2022, reflecting a change of $1,948,268 or 3482.84%. Such an increase in foreign currency translation loss was primarily caused by the currency exchange rate fluctuation.

Liquidity and Capital Resources

Working Capital

	March 31,		December 31,		Change
	June 30,		December 31,		Change
	2023		2022		(Amount)			(Percent)
Current Assets	$	~~165~~430,~~413~~498,~~419~~641	$	50,569,077	$	~~114~~379,~~844~~930,~~342~~564			~~227~~751.31	%
Current Liabilities		~~158~~423,~~152~~697,~~748~~343		43,656,963		~~114~~380,~~495~~040,~~785~~380			~~262~~870.51	%
Working Capital (deficit)	$	76,~~260~~801,~~671~~298	$	6,912,114	$	~~348~~(110,~~557~~816	)		5(1.60	)%

Our working capital was $76,~~260~~801,~~671~~298 as of ~~March~~June 3130, 2023, as compared to working capital of $6,912,114 as of December 31, 2022, ana ~~increase~~decrease in working capital of ~~$348~~of 110,~~557~~816 or 51.60%. The ~~increase~~decrease in working capital is primarily due to the increase in ~~cash~~the ~~inflow~~advance from ~~revenue~~customers ~~and~~offsetting by the increase in ~~the advance~~other ~~from customers and tax payable~~receivables.

Cash Flow from Operating Activities

Our net cash provided by operating activities was $728,~~559~~077,~~478~~623 for the ~~three~~six months ended ~~March~~June 3130, 2023, as compared to $17,~~260~~691,~~939~~850 for the ~~three~~six months ended ~~March~~ 31June 30, 2022, reflecting an increase of $620,~~298~~385,~~539~~773 or ~~500~~265.03%. The increase was primarily due to the increase in ~~net income,~~ advance from customers, accrued ~~tax~~liabilities ~~payable~~ and ~~accounts~~other ~~payable,~~payables partially offset by the increase in ~~advance~~other ~~to suppliers~~receivables, ~~loan~~advance to ~~third parties~~suppliers, ~~inventory,~~ and the decrease in inventories, accrued liabilities and other payables during the ~~three~~six months ended ~~March~~June 3130, 2023, as compared to ~~three~~six months ended ~~March~~ ~~31,~~June 30, 2022.

Cash Flow from Investing Activities

Our net cash used in investing activities was $~~384~~111,~~760~~672 for the ~~three~~six months ended ~~March~~June 3130, 2023, as compared to that of $48212,~~473~~875 for the ~~three~~six months ended ~~March~~ 31June 30, 2022, reflecting ana ~~increase~~decrease of $~~336~~101,~~287~~203 or ~~694~~47.54%. The ~~increase~~decrease in net cash used in investing activities was primarily due to the decrease ~~increase~~ in investment in construction in progress ~~and acquisition of equipment~~ during the ~~three~~six months ended ~~March~~June 3130, 2023, as compared to those items in the ~~three~~six months ended ~~March~~June 3130, 2022.

Cash Flow from Financing Activities

Our net cash ~~provided by~~used in financing activities was $23,~~015~~680,~~176~~239 for the ~~three~~six months ended ~~March~~June 3130, 2023, as compared to $~~190~~776,~~716~~804 of net cash ~~provided~~used byin financing ~~activities~~ activities for the ~~three~~six months ended ~~March~~June 3130, 2022, representing an increase of $12,~~824~~903,~~460~~435 or ~~957~~373.77%. The increase was primarily due to the repayment of loans from related parties, offset by proceeds received from issuance of the Company’s stock shares ~~and the loans from related parties~~ during the ~~three~~six months ended ~~March~~June 3130, 2023.

Off-Balance Sheet Arrangements

As of ~~March~~June 3130, 2023, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Critical Accounting Policies and Estimates

We prepare our financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) of the United States, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends, and other factors that management believes to be important at the time the financial statements are prepared. On a regular basis, we review our accounting policies and how they are applied and disclosed in our financial statements.

21While we believe that the historical experience, current trends, and other factors considered support the preparation of our financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.

While we believe that the historical experience, current trends and other factors considered support the preparation of our financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.

Inventories

Our inventories primarily consist of dandelion teas and water purifiers. Inventories are valued at the lower of cost (determined on a weighted average basis) and net realizable value. Inventories consist of raw materials, goods in process, and finished goods. We review our inventories regularly for possible obsolete goods and ~~establishes~~establish reserves when determined necessary. As of ~~March~~June 3130, 2023, and December 31, 2022, the allowance for obsolete inventories was $~~36,790~~0 and $36,299, respectively.

Construction in Progress

Construction in progress represents direct costs of construction, interest and design fees incurred. No interest was capitalized for the ~~three~~six months ended ~~March~~June 3130, 2023, and 2022. Capitalization of these costs ceases and the construction in progress is transferred to property, plant, and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is recognized until it is completed and ready for intended use. Construction in progress as of ~~March~~June 3130, 2023, and December 31, 2022, was $87,~~146~~846,~~134 and~~534 and $7,734,862, respectively.

Revenue Recognition

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. To determine the revenue to be recognized, the Company applies the following five-step model:

	●	identify arrangements with customers;

	●	identify performance obligations;

	●	determine transaction price;

	●	allocate transaction price to the separate performance obligations in the arrangement, if more than one exists; and

	●	recognize revenue as performance obligations are satisfied.

The Company generates revenues mainly from sales of packaged dandelion teas and water purifiers. Revenue from the sales of goods is recognized when the control over the promised goods is transferred to customers.

Cash payments received or due from customers before revenue recognized are recorded as advances from customers. The advance from customers is recognized as revenue when the Company’s performance obligation is completed.

Related parties

Recent Accounting Pronouncements

See Note 3 to unaudited consolidated financial statements for the ~~three~~six months ending ~~March~~June 3130, 2023, and 2022.

2226

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this report, we conducted an evaluation under the supervision and with the participation of our chief (principal) executive officer and chief (principal) accounting officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be presented or detected on a timely basis.

Based on management’s assessment, we have ~~concluded~~ concluded that, as of ~~March~~June 3130, 2023, our disclosure controls and procedures were not effective in timely alerting management to the material ~~information~~ information relating to us required to be included in our annual and interim filings with the SEC.

Our chief executive officer and principal financial officer have concluded that our disclosure controls and procedures had the following material weaknesses:

●

We were unable to maintain any segregation of duties within our financial operations due to our reliance on limited personnel in the finance function. While this control deficiency did not result in any audit adjustments to our 2021 interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties;

●

We lack sufficient resources to perform the internal audit function and does not have an Audit Committee;

●

Documentation of all proper accounting procedures is not yet complete; and

●

We have no formal control process related to the identification and approval of related party transactions.

These weaknesses were identified in our Annual ~~Report~~ Report on Form 10-K for the year ended December 31, ~~2021~~2022. These weaknesses have existed since our inception on June 28, 2010 and, as of ~~March~~ 31June 30, 2023, have not been remediated.

To the extent reasonably possible given our limited financial and personnel resources, we intend to take measures to cure the aforementioned material weaknesses, including, but not limited to, the following:

●

Consider the engagement of consultants to assist in ensuring that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures;

●

Hire additional qualified financial personnel, including a Chief Financial Officer, on a full-time basis;

●

Expand our board of directors to include additional independent individuals willing to perform directorial functions; and

●

Increase our workforce in preparation for commencing revenue producing operations.

Since the recited remedial actions will require that we hire or engage additional personnel, these material weaknesses may not be overcome in the near-term due to our limited financial resources. Until such remedial actions can be realized, we will continue to rely on the limited advice of outside professionals and consultants.

Changes in Controls and Procedures

There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2327

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us or our business.

ITEM 1A. RISK FACTORS

Not applicable for smaller reporting companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number		Description

31.1*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

32.1**		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*		INLINE XBRL INSTANCE DOCUMENT

101.SCH*		INLINE XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT

101.CAL*		INLINE XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT

101.DEF*		INLINE XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT

101.LAB*		INLINE XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT

101.PRE*		INLINE XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed along with this document
**	The certification attached as Exhibit 32.1 accompanying this quarterly report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

2428

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Tengjun Biotechnology Corp.
Date: May 15, 2023	By:	/s/ Xianchang Ma
Date: August 14, 2023	By:	/s/ Caihong Qu
	Name:	~~Xianchang~~Caihong MaQu
	Title:	Chief Executive Officer and Chief Financial Officer
		(Principal Executive Officer, Principal Financial and Accounting Officer)

2529

Filing Compare · Tengjun Biotechnology Corp.