UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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

For the ~~quarterly~~Quarterly ~~period~~Period ~~ended~~Ended ~~March~~June 3130, 2025

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

For the transition period from ________ to __________

Commission file number: 001-41957

WETOUCH TECHNOLOGY INC.

(Exact name of registrant as specified in its charter)

Nevada		20-4080330
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

No. 29, Third Main Avenue Shigao Town, Renshou County Meishan, Sichuan, China		620500
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (86) 28-37390666

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		WETH		Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 past 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 Act) Yes ☐ No ☒

As of October 8, ~~07,~~ 2025, there were 11,931,534 shares of the registrant’s common stock, par value $0.001 per share, issued and outstanding.

WETOUCH TECHNOLOGY INC.

QUARTERLY REPORT ON FORM 10-Q

	TABLE OF CONTENTS	Page Number
	Cautionary Note Regarding Forward Looking Statements	ii
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 (Unaudited)	F-1
	Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for the Three Months Ended March 31 2025 and 2024 (Unaudited)	F-2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	F-3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	F-4
	Notes to Condensed Consolidated Financial Statements	F-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9
Item 4.	Controls and Procedures	9
PART II	OTHER INFORMATION	12
Item 1.	Legal Proceedings	12
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3.	Defaults Upon Senior Securities	12
Item 4.	Mine Safety Disclosures	12
Item 5.	Other Information	12
Item 6.	Exhibits	13
	Signatures	14

TABLE OF CONTENTS

		Page Number

	Cautionary Note Regarding Forward Looking Statements	ii
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024	F-1
	Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)	F-2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)	F-3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (Unaudited)	F-4
	Notes to Condensed Consolidated Financial Statements	F-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.	Controls and Procedures	13

PART II	OTHER INFORMATION	15
Item 1.	Legal Proceedings	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5.	Other Information	15
Item 6.	Exhibits	16
	Signatures	17

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be preceded by, or contain, words such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “predict,” “potential,” “might,” “could,” “would,” “should” or other words indicating future results, though not all forward-looking statements necessarily contain these identifying words. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, without limitation, statements about our future business operations and results, our strategy and competition. These statements represent our current expectations or beliefs concerning various future events and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations, including, but not limited to:

●

Our reliance on our top customers is significant. Failure to attract new customers or retain existing ones cost-effectively could materially and adversely impact our business, financial condition, and results of operations.

●

We hold a substantial amount of accounts receivable, which may become uncollectible.

●

We face fines and penalties from the Chinese government for not completing required filings.

●

Our capacity to uphold the quality and safety standards of our products.

●

Our ability to compete effectively within the touchscreen display industry.

●

Without substantial additional financing, our ability to execute our business plan will be compromised.

●

Failure to secure a new parcel for constructing our new buildings and facilities, as well as acquiring and installing new production lines on the new parcel, could materially and adversely affect our business, financial condition, and results of operations.

●

Revocation or unavailability of preferential tax treatments and government subsidies, or successful challenges to our tax liability calculation by PRC tax authorities, may necessitate payment of tax, interest, and penalties exceeding our tax provisions.

●

Significant interruptions in the operations of our third-party suppliers could potentially disrupt our operations.

●

Risks associated with fluctuations in the cost, availability, and quality of raw materials may adversely affect our results of operations.

●

We are reliant on key executives and highly qualified managers, and retention cannot be assured.

●

Absence of long-term contracts with our suppliers allows them to reduce order quantities or terminate sales to us at any time.

●

Failure to adopt new technologies to evolving customer needs or emerging industry standards may materially and adversely affect our business.

●

Lack of business liability or disruption insurance exposes us to significant costs and business disruption.

●

Adverse regulatory developments in Mainland China may subject us to additional regulatory review, restrictions, disclosure requirements, and regulatory scrutiny by the SEC, increasing compliance costs and hindering future securities offerings.

●

Our common stock may be prohibited from trading in the U.S. under the Holding Foreign Companies Accountable Act if PCAOB inspection of our auditor is incomplete, leading to delisting or prohibition and potential decline in stock value.

●

Changes in China’s economic, political, or social conditions or government policies may adversely affect our business and operations.

●

Uncertainties regarding the PRC legal system, including enforcement and sudden changes in laws and regulations, could adversely affect us and limit legal protections.

●

Fluctuations in exchange rates could materially and adversely affect our results of operations and your investment value.

● The other risks and uncertainties discussed under the section titled “Risk Factors” beginning on page 12 of this Quarterly Report and our other filings with the Securities and Exchange Commission.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We undertake no obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this Quarterly Report with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in the foregoing documents by these cautionary statements.

iii

Item 1. Financial Statements

WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets at March 31, 2025 and December 31, 2024 (Unaudited)	F-1
Condensed Consolidated Balance Sheets at June 30, 2025 (Unaudited) and December 31, 2024	F-1
Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	F-2
Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)	F-2
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	F-3
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30,2025 and 2024 (Unaudited)	F-3
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	F-4
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30,2025 and 2024 (Unaudited)	F-4
Notes to Condensed Consolidated Financial Statements	F-5 - F-2220

WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2025			December 31, 2024
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	110,452,470		$	103,760,324
Accounts receivable, net		10,736,898			7,504,630
Inventories		145,664			112,327
Prepaid expenses and other current assets		1,824,544			2,762,580
TOTAL CURRENT ASSETS		123,159,576			114,139,861

Property, plant and equipment, net		13,020,127			12,782,997
Operating right-of-use assets		813,516			1,055,208
Deferred tax assets		30,971			41,397
TOTAL ASSETS	$	137,024,190		$	128,019,463

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,487,987		$	1,263,981
Due to a related party		642,634			149,211
Income tax payable		866,798			-
Accrued expenses and other current liabilities		1,408,070			966,461
Operating lease liabilities- current		609,059			571,539
TOTAL CURRENT LIABILITIES		5,014,548			2,951,192

Operating lease liabilities- non current		204,458			482,606
TOTAL LIABILITIES	$	5,219,006		$	3,433,798

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value, 15,000,000 shares authorized, 11,931,534 and 11,931,534 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively*	$	11,932		$	11,932
Additional paid in capital*		52,501,680			52,501,680
Statutory reserve		8,073,968			8,073,968
Retained earnings		79,433,924			74,629,374
Accumulated other comprehensive loss		(8,216,320	)		(10,631,289	)
TOTAL STOCKHOLDERS’ EQUITY		131,805,184			124,585,665
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	137,024,190		$	128,019,463

	March 31, 2025			December 31, 2024
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	106,407,564		$	103,760,324
Accounts receivable, net		11,101,555			7,504,630
Inventories		146,625			112,327
Prepaid expenses and other current assets		2,167,153			2,762,580
TOTAL CURRENT ASSETS		119,822,897			114,139,861
Property, plant and equipment, net		12,855,562			12,782,997
Operating right-of-use assets		952,398			1,055,208
Deferred tax assets		47,035			41,397
TOTAL ASSETS	$	133,677,892		$	128,019,463
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,594,777		$	1,263,981
Due to a related party		400,513			149,211
Income tax payable		1,290,822			-
Accrued expenses and other current liabilities		1,558,615			966,461
Operating lease liabilities- current		599,654			571,539
TOTAL CURRENT LIABILITIES		5,444,381			2,951,192
Operating lease liabilities- non current		352,744			482,606
TOTAL LIABILITIES	$	5,797,125		$	3,433,798
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value, 15,000,000 shares authorized, 11,931,534 and 9,732,948 issued and outstanding as of March 31, 2025 and December 31, 2024, respectively*	$	11,932		$	11,932
Additional paid in capital*		52,501,680			52,501,680
Statutory reserve		8,073,968			8,073,968
Retained earnings		77,192,096			74,629,374
Accumulated other comprehensive loss		(9,898,909	)		(10,631,289	)
TOTAL STOCKHOLDERS’ EQUITY		127,880,767			124,585,665
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	133,677,892		$	128,019,463

*	Retrospectively restated for effect of reverse stock split (1-for-20), see Note 10 (2)

*The ~~Retrospectively~~accompanying ~~restated~~notes ~~for~~are ~~effect~~an ofintegral ~~reverse~~part ~~stock~~of these ~~split~~condensed ~~(1-for-20),~~consolidated ~~see~~financial ~~Note 11 (2)~~statements.

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~F-1

~~F-1~~WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

~~WETOUCH TECHNOLOGY~~CONDENSED ~~INC.~~CONSOLIDATED ~~AND~~STATEMENTS ~~ITS~~OF ~~SUBSIDIARIES~~INCOME

~~CONDENSED CONSOLIDATED STATEMENTS OF INCOME~~ AND COMPREHENSIVE ~~LOSS~~INCOME

(Unaudited)

	For the Three Months Ended March 31,
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2025			2024			2025			2024
	(Unaudited)			(Unaudited)
REVENUES	$	12,419,455		$	12,234,575		$	27,709,033		$	27,111,834
REVENUES	$	15,289,578		$	14,877,259
COST OF REVENUES		(8,307,944	)		(7,373,757	)		(17,955,891	)		(18,913,058	)
Cost of revenues		(9,647,947	)		(11,539,301	)
GROSS PROFIT		4,111,511			4,860,818			9,753,142			8,198,776
GROSS PROFIT		5,641,631			3,337,958
OPERATING EXPENSES
OPERATING EXPENSES
Selling expenses		(114,575	)		(289,716	)		(217,032	)		(749,508	)
Selling expenses		(102,457	)		(459,792	)
General and administrative expenses		(914,032	)		(802,663	)		(2,480,472	)		(1,333,016	)
General and administrative expenses		(1,566,440	)		(530,524	)
Research and development expenses		-			(43,211	)		-			(85,949	)
Research and development expenses		-			(42,738	)
TOTAL OPERATING EXPENSES		(1,028,607	)		(1,135,590	)		(2,697,504	)		(2,168,473	)
Total operating expenses		(1,668,897	)		(1,033,054	)
INCOME FROM OPERATIONS		3,082,904			3,725,228			7,055,638			6,030,303
INCOME FROM OPERATIONS		3,972,734			2,304,904
Interest income		35,646			38,046			96,740			69,393
OTHER INCOME (EXPENSES)
Interest expense		-			-			-			(1,169,974	)
Interest income		61,094			31,347
Other income		-			-			-			46,449
Interest expense		-			(1,169,974	)
Gain on changes in fair value of common stock purchase warrants liability		-			37,751			-			45,572
Other income		-			46,620
TOTAL OTHER INCOME (EXPENSES)		35,646			75,797			96,740			(1,008,560	)
Gain on changes in fair value of common stock purchase warrants liability		-			7,821
INCOME BEFORE INCOME TAX EXPENSE		3,118,550			3,801,025			7,152,378			5,021,743
TOTAL OTHER INCOME (EXPENSES)		61,094			(1,084,186	)
INCOME TAX EXPENSE		(876,722	)		(1,099,331	)		(2,347,828	)		(1,761,179	)
INCOME BEFORE INCOME TAX EXPENSE		4,033,828			1,220,718
NET INCOME	$	2,241,828		$	2,701,694		$	4,804,550		$	3,260,564
INCOME TAX EXPENSE		(1,471,106	)		(661,848	)
OTHER COMPREHENSIVE INCOME
NET INCOME	$	2,562,722		$	558,870
Foreign currency translation adjustment		1,682,589			(778,406	)		2,414,969			(2,708,399	)
OTHER COMPREHENSIVE INCOME (LOSS)
COMPREHENSIVE INCOME	$	3,924,417		$	1,923,288		$	7,219,519		$	552,165
Foreign currency translation adjustment		732,380			(1,929,993	)
EARNINGS PER COMMON SHARE*
COMPREHENSIVE INCOME (LOSS)	$	3,295,102		$	(1,371,123	)
Basic	$	0.19		$	0.23		$	0.40		$	0.29
EARNINGS PER COMMON SHARE
Diluted	$	0.19		$	0.23		$	0.40		$	0.29
Basic	$	0.21		$	0.04
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING*
Diluted	$	0.21		$	0.04
Basic		11,931,534			11,931,534			11,931,534			11,325,873
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING*
Diluted		11,931,534			11,982,239			11,931,534			11,376,578
Basic		11,931,534			13,342,294
Diluted		11,931,534			13,392,999

* Retrospectively restated for effect of reverse stock split (1-for-20), see Note 1110 (2)

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

F-2

WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)

	Common stock at Par value $0.001				Additional paid-in		Statutory		Retained		Accumulated other comprehensive			Total stockholders’
	Shares		Amount		capital		reserve		Earnings		loss			equity
Balance as of December 31 2024		11,931,534	$	11,932	$	52,501,680	$	8,073,968	$	74,629,374	$	(10,631,289	)	$	124,585,665
Net income		-		-		-		-		2,562,722		-			2,562,722
Foreign currency translation adjustment		-		-		-		-		-		732,380			732,380
Balance as of March 31, 2025		11,931,534	$	11,932	$	52,501,680	$	8,073,968	$	77,192,096	$	(9,898,909	)	$	127,880,767
Net income										2,241,828					2,241,828
Foreign currency translation adjustment		-		-		-		-		-		1,682,589			1,682,589
Balance as of June 30, 2025		11,931,534	$	11,932	$	52,501,680	$	8,073,968	$	79,433,924	$	(8,216,320	)	$	131,805,184

	Common stock at Par value $0.001				Additional paid-in			Statutory		Retained		Accumulated other comprehensive			Total stockholders’
	Shares		Amount		capital			reserve		Earnings		loss			equity
Balance as of December 31 2023*		9,732,948	$	9,733	$	43,514,125		$	7,195,092	$	69,477,092	$	(7,275,432	)	$	112,920,610
Issuance of common stock from the 2024 Public Offering, net of issuance costs		2,160,000		2,160		8,987,594			-		-		-			8,989,754
Exercise of warrants issued in conjunction with legal/consultant services in 2020 and 2021		35,861		36		(36	)		-		-		-			-
Exercise of warrants issued to third parties in conjunction with debt issuance in 2021		2,725		3		(3	)		-		-		-			-
Net income		-		-		-			-		558,870		-			558,870
Foreign currency translation adjustment		-		-		-			-		-		(1,929,993	)		(1,929,993	)
Balance as of March 31, 2024		11,931,534	$	11,932	$	52,501,680		$	7,195,092	$	70,035,962	$	(9,205,425	)	$	120,539,241
Net income		-		-		-			-		2,701,694		-			2,701,694
Foreign currency translation adjustment		-		-		-			-		-		(778,406	)		(778,406	)
Balance as of June 30, 2024		11,931,534	$	11,932	$	52,501,680		$	7,195,092	$	72,737,656	$	(9,983,831	)	$	122,462,529

* Retrospectively restated for effect of reverse stock split (1-for-20), see Note 1110 (2)

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

F-3

WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
	For the Six Months Ended June 30,
	2025			2024
	(Unaudited)			(Unaudited)
Cash flows from operating activities
Net income	$	24,~~562~~804,~~722~~550		$	~~558~~3,~~870~~260,564
Adjustments to reconcile net income to cash provided by (used in) operating activities
Allowance for credit loss		45,~~739~~889			-
Reversal of provision for obsolete inventory		(2591,~~276~~252	)		-
Depreciation		24,~~471~~957			24,~~316~~798
Amortization of discounts and issuance cost of the notes		-			5,715
Amortization of operating Right-of-use assets		~~156~~308,~~014~~244			-
(Gain) on changes in fair value of common stock purchase warrants liability		-			(7,821	)
Gain on changes in fair value of common stock purchase warrants liability		-			(45,572	)
Changes in operating assets and liabilities:
Accounts receivable		(3,~~545~~052,~~017~~186	)		(3,~~622~~568,~~872~~822	)
Inventories		(860,~~289~~426	)		3236,~~939~~878
Prepaid expenses and other current assets		~~554~~908,~~764~~043			(32,~~429~~817,~~690~~799	)
Deferred tax assets		(511,~~383~~073	)		-
Accounts payable		~~322~~197,~~661~~607			~~(64~~293,~~222~~217	)
Amounts due to related parties		~~250~~493,~~959~~423			-
Income tax payable		1856,~~290,429~~161			~~661~~1,~~848~~101,760
Accrued expenses and other current liabilities		~~589~~433,~~309~~057			(3,~~354~~606,~~627~~647	)
Operating lease liabilities		(~~151~~303,~~375~~592	)		-
Net cash provided by (used in) operating activities		24,~~039~~676,~~728~~400			(95,~~217~~335,~~544~~907	)
Cash flows from investing activities
Cash flows from investing activity
Purchase of property, plant and equipment		-			(~~111~~114,~~289~~762	)
Net cash used in investing activities		-			(111,289	)
Net cash used in investing activity		-			(114,762	)
Cash flows from financing activities
Proceeds from issuance of common stock, net of issue costs		-			8,989,754
Repayment of interest-free advances to a third party		-			(82,864	)
Proceeds from advances from a related party		-			263,956
Repayments of convertible promissory notes payable		-			(1,400,750	)
Net cash provided by financing activities		-			7,~~506~~852,~~140~~960
Effect of changes of foreign exchange rates on cash		~~607~~2,~~513~~015,746			(12,~~421~~068,~~411~~543	)
Net increase (decrease) in cash		2,647,238			(3,244,104	)
Net increase in cash		6,692,146			333,748
Cash, beginning of period		103,760,324			98,040,554
Cash, end of period	$	~~106~~110,~~407~~452,~~562~~470		$	9498,~~796~~374,~~450~~302
Supplemental disclosures of cash flow information
Income tax paid	$	1,291,550		$	659,419
Interest paid	$	-		$	1,186,210
Issue costs charged to additional paid-in capital	$	-		$	1,810,246
Exercise of warrant shares	$	-		$	38,586
Lease liabilities arising from obtaining right-of-use assets	$	4749,~~251~~775		$	-

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

F-4

WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BUSINESS DESCRIPTION

Wetouch Technology Inc. (“Wetouch”, or the “Company”), formerly known as Gulf West Investment Properties, Inc., was originally ~~incorporated~~ incorporated in August 1992, under the laws of the state of Nevada.

On October 9, 2020, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Wetouch Holding Group Limited (“BVI Wetouch”) and all the shareholders of BVI Wetouch (each, a “BVI Shareholder” and collectively, the “BVI Shareholders”), to acquire all the issued and outstanding capital stock of BVI Wetouch in exchange for the issuance to the BVI Shareholders an aggregate of 28,000,000 shares (1,400,000 shares post-Reverse Stock Split) of the Company’s common stock (the “Reverse Merger”). In the Reverse Merger, each ordinary share of BVI Wetouch was exchanged for 2,800 shares (140 shares post-Reverse Stock Split) of common stock of Wetouch. Immediately after the closing of the Reverse Merger on October 9, 2020, the Company had a total of 31,396,394 (1,569,820 shares post-Reverse Stock Split) issued and outstanding shares of common stock. As a result of the Reverse Merger, BVI Wetouch became a wholly-owned subsidiary of the Company.

BVI Wetouch is a holding company whose only asset, held through a subsidiary, is 100% of the registered capital of Sichuan Wetouch Technology Co., Ltd. (“Sichuan Wetouch”), a limited liability company organized under the laws of the People’s Republic of China (“China” or the “PRC”). Sichuan Wetouch is primarily engaged in the business of research and development, manufacture, and distribution of touchscreen displays to customers both in the PRC and overseas. The touchscreen products, which are ~~manufactured~~ manufactured by the Company, are primarily for use in financial terminals, automotive, Point of Sales, gaming, lottery, medical, Human-Machine Interface (HMI), and other specialized industries.

The Reverse Merger was accounted for as a recapitalization effected by a share exchange, wherein BVI Wetouch is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of BVI Wetouch have been brought forward at their book value and no goodwill has been recognized. The number of shares, par value amount, and additional paid-in capital in the prior years are retrospectively adjusted accordingly.

Corporate ~~History~~ History of BVI Wetouch

BVI Wetouch was incorporated under the laws of British Virgin Islands on August 14, 2020. It became the holding company of Hong Kong Wetouch Electronics Technology Limited (“Hong Kong Wetouch”) on September 11, 2020.

Hong Kong Wetouch Technology Limited (“HK Wetouch”), was incorporated as a holding company under the laws of Hong Kong Special Administrative Region (the “SAR”) on December 3, 2020. On March 2, 2021, HK Wetouch acquired all shares of Hong Kong Wetouch. Due to the fact that Hong Kong Wetouch and HK Wetouch are both under the same sole stockholder, the acquisition is accounted for under common control.

In June 2021, Hong Kong Wetouch completed its dissolution process pursuant to the minutes of its special stockholder meeting.

Sichuan Wetouch was formed on May 6, 2011 in the PRC and became a Wholly Foreign-Owned Enterprise (“WFOE”) in PRC on February 23, 2017. On July 19, 2016, Sichuan Wetouch was 100% held by HK Wetouch.

On December 30, 2020, Sichuan Vtouch was incorporated in Chengdu, Sichuan, under the PRC laws.

F-5

In March 2021, pursuant to local PRC government guidelines on local environmental issues and the national plan, Sichuan Wetouch was under the government directed relocation order. Sichuan Vtouch took over the operating business of Sichuan Wetouch.

On March 30, 2023, an independent third party acquired all shares of Sichuan Wetouch for a nominal amount.

As a result of the above restructuring, HK Wetouch became the sole stockholder of Sichuan Vtouch.

The following diagram illustrates the Company’s current corporate structure:

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the United States Securities and Exchange Commission (the “SEC”). The condensed consolidated balance sheet as of December 31, 2024 was derived from the audited consolidated financial statements of Wetouch. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated balance sheet of the Company as of December 31, 2024, and the related consolidated statements of income and comprehensive income, changes in stockholders’ equity and cash flows for the years then ended.

In the opinion of the management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of ~~March~~June 3130, 2025, the results of operations and cash flows for the ~~three-month~~six ~~periods~~months ended ~~March~~June 3130, 2025 and 2024 have been made. However, the results of operations included in such financial statements may not necessarily be indicative of annual results.

F-6

Deconsolidation of Sichuan Wetouch

On March 30, 2023, upon transferring Sichuan Wetouch to a third-party individual for a nominal value, the Company was no longer able to operate and exert control over ~~this~~Sichuan ~~subsidiary~~Wetouch whose operation has been taken over by Sichuan Vtouch since the first quarter of 2021. As a result, Sichuan Wetouch was deconsolidated accordingly since the disposal date.

The deconsolidated Sichuan Wetouch had assets, liabilities and the non-controlling interest on disposal date as the following:

	~~March 30, 2023~~	March 30, 2023
Total assets as of deconsolidated date	$	-
Total liabilities as of deconsolidated date		-
Total gain or loss from deconsolidation	$	-

Upon the deconsolidation, the Company was no longer entitled to the assets and also legally released from the liabilities previously held by the deconsolidated Sichuan Wetouch, derived nil gain or loss from the deconsolidation in the condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2023. The disposal of Sichuan Wetouch did not represent a strategic shift and did not have a major effect on the Company’s operation. There was no cash outflow for the disposal for the three months ended March 31, 2023.

(b) Uses of Estimates

In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for estimated uncollectible receivables, fair values of financial instruments, inventory valuations, useful lives of property, plant and equipment, the recoverability of long-lived assets, provision necessary for contingent liabilities, ~~revenue recognition~~ and ~~realization~~ ofrevenue ~~deferred tax assets~~recognition. Actual results could differ from those estimates.

For a detailed discussion about Wetouch’s significant accounting policies, refer to Note 2 — “Summary of Significant Accounting Policies,” in Wetouch’s consolidated financial statements included in Company’s 2024 audited consolidated financial statements. Other than the revised ~~accounting~~ accounting policies on lease and segment reporting as below, during the ~~three-month~~six ~~periods~~months ended ~~March~~June 3130, 2025, there were no significant changes made to Wetouch significant accounting policies.

~~F-7~~Lease

~~Lease~~The Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) for all periods presented. The Company elected the short-term lease exemption for all contracts with lease terms of 12 months or less.

~~The Company~~Under ~~adopted~~the ~~ASU~~guidance ~~No.~~of ASU 2016-02, ~~Leases~~an ~~(Topic~~entity ~~842)~~is ~~(“ASU~~required ~~2016-02”)~~to ~~for~~recognize ~~all~~right-of-use ~~periods~~assets ~~presented.~~and ~~The Company elected the short-term~~ lease ~~exemption~~liabilities ~~for~~on ~~all~~its ~~contracts~~balance ~~with~~sheet ~~lease~~and ~~terms~~disclose ofkey ~~12 months~~information about orleasing ~~less~~arrangements.

~~Under~~The Company’s lease terms include options to renew or terminate the ~~guidance~~lease when it is reasonably certain that it will exercise the option. The Company determines if a contract contains a lease based on whether it has the right to obtain substantially all of ~~ASU~~the ~~2016-02,~~economic benefits from the use of an ~~entity~~identified isasset ~~required~~that tothe ~~recognize~~Company does not own and whether it has the right- to direct the use of- an identified asset in exchange for consideration. Right of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are recognized as the amount of the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate (“IBR”), because the interest rate implicit in most of the Company’s leases is not readily determinable. The IBR is a hypothetical rate based on the Company’s understanding of what its ~~balance~~credit ~~sheet~~rating would be and ~~disclose~~the resulting interest it would pay to borrow an amount equal to the lease payments in a similar economic environment over ~~key~~the ~~information~~lease ~~about~~term ~~leasing~~on ~~arrangements~~a collateralized basis. Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in the Company’s lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred.

The Company’s lease terms include options to renew or terminate the lease when it is reasonably certain that it will exercise the option. The Company determines if a contract contains a lease based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset that the Company does not own and whether it has the right to direct the use of an identified asset in exchange for consideration. Right of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are recognized as the amount of the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate (“IBR”), because the interest rate implicit in most of the Company’s leases is not readily determinable. The IBR is a hypothetical rate based on the Company’s understanding of what its credit rating would be and the resulting interest it would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized basis. Lease payments may be fixed or variable, however, only fixed payments or inF-substance fixed payments are included in the Company’s lease liability calculation. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments is incurred.7

The lease right-of-use assets are initially measured at the carrying amount of the lease liability and adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use-asset. Lease expense for minimum lease payments exclusive of value-added tax is recognized on a straight-line basis over the lease term The new standard provides a number of optional practical expedients at transition. The Company elected certain practical expedients that must be elected as a package, which permit the Company to not reassess, under the new standard, prior conclusions about (1) lease identification, (2) lease classification and (3) initial direct costs. Additionally, the Company elected a short-term lease exception policy, which allows entities to not apply Topic 842 to short-term leases (i.e. leases with terms of 12 months or less) and a hindsight policy, which allows an entity to include current considerations for existing leases when determining initial lease terms. The Company has also elected to account for lease and non-lease components as a single component for all leases and elected to utilize an IBR (incremental borrowing rate) that equals the risk free rate plus premium for all leases when calculating the lease liability.

Segment reporting

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) or decision-making group, in deciding how to allocate resources and in assessing performance. The Company evaluated its portfolio of service to determine whether certain services exhibit similar characteristics, such that they should be grouped together in the Company’s disclosure. The Company derives revenue primarily from projects performed under: (i) master and general service contract with customers for electric power supply solutions, mainly for the design and installation of low voltage outlet cable and bridge, power distribution box and electric vehicle power station; (2) installation of power wires, power poles and electricity distribution equipment and facilities for power supply system upgrade for both residential and commercial projects. The Company’s services have similar economic characteristics with respect to construction project nature, raw materials and supplies to be used in the projects, vendors, marketing and promotions, customers and methods of distribution. The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer (“CEO”), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The CODM confers regularly to review trends in operating metrics, revisit, assess, and adjust significant strategic and operational matters, and make resource adjustments as needed. These discussions include exploring opportunities for project acquisition, responding immediately and effectively to operational adjustments, aligning ongoing business activities with corporate-level objectives, improving customer satisfaction, and enhancing corporate culture, among other management concerns. The primary measure of segment revenue and profitability for the Company’s operating segment is considered to be consolidated revenue and net income. Certain financial information, such as revenue, can be disaggregated, whereas cost of revenues, selling and marketing expenses, general and administrative expenses, research and development expenses and other income (expenses), are mixed and not disaggregated. Hence, with respect to costs of revenues and operating expenses and other income (expenses), no discrete financial information beyond the consolidated results is prepared and presented to the CODM.

As all of the Company’s assets are all located in the PRC, no geographical segment information of assets is presented. The CODM does not review any information regarding total assets on a reportable segment basis. Through the evaluation, the CODM determined that the Company has only one reporting segment.

~~F-8~~Recent accounting pronouncements

~~Recent~~On November 27, 2023, FASB issued Accounting Standards ~~accounting~~Update ~~pronouncements~~No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker. The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption. The amendments in ASU 2023-07 are required to be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

On ~~November~~ 27December 14, 2023, the FASB issued Accounting Standards Update No. 2023-0709, ~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~ Tax Disclosures (“ASU 2023-0709”),. ~~which~~ASU 2023-09 requires that anentities ~~entity~~ disclose ~~significant~~specific ~~segment~~categories ~~expenses~~in ~~impacting~~their ~~profit~~rate reconciliation and ~~loss that~~provide ~~are~~additional ~~regularly~~information ~~provided~~for toreconciling ~~the chief operating decision maker. The update is required to be applied retrospectively to prior periods~~items ~~presented,~~that ~~based~~meet ona ~~the~~quantitative ~~significant segment expense categories identified and disclosed in the period of adoption~~threshold. The ~~amendments~~new ~~in ASU~~standard ~~2023-07~~is ~~are~~effective ~~required to be adopted~~ for ~~fiscal~~the ~~years~~Company beginning ~~after~~ December 15, ~~2023~~2024, ~~and~~with ~~interim~~early ~~periods~~adoption ~~within~~permitted effective for fiscal years beginning ~~after~~ ~~December~~January 151, 2024~~, with early adoption permitted~~. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

~~On December 14, 2023, the FASB issued Accounting Standards Update No. 2023~~F-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires that entities disclose specific categories in their rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The new standard is effective for the Company beginning December 15, 2024, with early adoption permitted effective for fiscal years beginning January 1, 2024. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.8

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the consolidated financial statements to provide enhanced transparency into the expense captions presented on the face of the statement of income and comprehensive income. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted, and may be applied either prospectively or retrospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements. On January 6, 2025, FASB issued ASU 2025-01 that clarifies for non-calendar year-end entities the interim effective date of Accounting Standards Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Public business entities are required to adopt the guidance in Update 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its related disclosures.

In March 2025, the FASB issued ASU 2025-02—Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122. The amendments in this Update are effective immediately and on a fully retrospective basis to annual periods beginning after December 15, 2024. The Company is currently evaluating the effect of adoption of this standard to its consolidated financial statements and disclosures.

Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to, its unaudited condensed consolidated financial condition, results of operations, cash flows or disclosures.

~~F-9~~NOTE 3 — ACCOUNTS RECEIVABLE

NOTE 3 — ACCOUNTS RECEIVABLE

	June 30, 2025		December 31, 2024
	(Unaudited)
Accounts receivable	$	10,736,898	$	7,504,630
Allowance for credit losses		-		-
Accounts receivable, net	$	10,736,898	$	7,504,630

~~Accounts~~ The Company’s accounts receivable ~~consists~~primarily includes ofbalance due from customers when the ~~following:~~Company’s products are sold and delivered to customers.

	March 31, 2025		December 31, 2024
	(Unaudited)
Accounts receivable	$	11,101,555	$	7,504,630
Allowance for credit losses		-		-
Accounts receivable, net	$	11,101,555	$	7,504,630

The following table provides an analysis of the aging of accounts receivable as of June 30, 2025 and December 31, 2024:

The Company’s accounts receivable primarily includes balance due from customers when the Company’s products are sold and delivered to customers.

	June 30, 2025		December 31, 2024
	(Unaudited)
Current	$	5,997,500	$	3,726,124
1-3 months past due		4,739,398		2,536,815
4-6 months past due		-		1,241,691
Total accounts receivable	$	10,736,898	$	7,504,630

~~The following table provides an analysis of the aging of accounts receivable as of March 31, 2025 and December 31, 2024:~~F-9

	March 31, 2025		December 31, 2024
		(Unaudited)
Current	$	4,365,438	$	3,726,124
1-3 months past due		5,828,772		2,536,815
4-6 months past due		907,345		1,241,691
Total accounts receivable	$	11,101,555	$	7,504,630

NOTE 4 — PREPAID EXPENSES AND OTHER CURRENT ASSETS

~~NOTE 4~~Prepaid —expenses ~~PREPAID~~and ~~EXPENSES~~other ~~AND~~current ~~OTHER~~assets ~~CURRENT~~consist of ~~ASSETS~~the following:

Prepaid expenses and other current assets consist of the following:

	June 30, 2025		December 31, 2024
	(Unaudited)
Advance to suppliers	$	213,551	$	252,618
Issuance cost related to convertible promissory notes		-		-
Prepayment for land use right (i)		547,941		537,755
Security deposit (ii)		54,861		53,840
Prepaid consulting service fees (iii)		-		884,687
Prepaid market research fees (iv)		955,000		955,000
Others receivable (v)		53,191		78,680
Prepaid expenses and other current assets	$	1,824,544	$	2,762,580

	March 31, 2025		December 31, 2024
		(Unaudited)
Advance to suppliers	$	210,757	$	252,618
Issuance cost related to convertible promissory notes		-		-
Prepayment for land use right (i)		540,912		537,755
Security deposit (ii)		54,157		53,840
Prepaid consulting service fees (iii)		357,390		884,687
Prepaid market research fees (iv)		955,000		955,000
Others receivable (v)		48,937		78,680
Prepaid expenses and other current assets	$	2,167,153	$	2,762,580

(i)

On July 23, 2021, Sichuan Vtouch entered into a contract with Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right of a parcel of land of 131,010 square feet for a consideration of RMB3,925,233 (equivalent to $540,912) for the Company’s new facility. The Company paid the consideration in full by November 18, 2021. Upon issuance of a certificate of land use right by the local government, which is estimated to be obtained by the second half of 2026, the Company will reclassify this prepayment to intangible assets accordingly.

(iii) On July 2328, 2021, Sichuan Vtouch ~~entered~~made ~~into~~ a ~~contract~~security ~~with~~deposit ~~Chengdu~~of ~~Wenjiang~~RMB393,000 ~~District~~(equivalent ~~Planning~~to $54,861) to Chengdu Cross-Strait Science and ~~Natural~~Technology ~~Resources~~Industry ~~Bureau~~Development Park Management Committee to obtain a construction license for its new facility. This deposit will be refunded upon the ~~purchase~~issuance of athe ~~land~~construction ~~use~~license, ~~right~~which ofis aexpected ~~parcel~~to ofbe ~~land~~by the second half of ~~131~~2025. (iii) In May 2023,~~010~~ ~~square~~the ~~feet~~Company entered into two third-party consulting service agreements for a ~~consideration~~fee of ~~RMB3,925,233~~$1.35 ~~(equivalent~~million toand $~~540~~3.1 million,~~912)~~ respectively, for the ~~Company’s~~three-year ~~new~~consulting ~~facility~~services. The ~~Company~~total ~~paid~~fee would be amortized over the ~~consideration~~three-year services and reclassified to stock issuance costs accordingly. As of June 30, 2025, the Company this prepaid consulting service fees has been amortized in full. by(iv) ~~November~~On 18February 29, ~~2021~~2024, the Company advanced market research fees $70,000 and $855,000, respectively, to two unrelated individuals, Mr. ~~Upon~~Chien ~~issuance~~Hui ofChueh and Mr. Cheung Ming Lin, in relation to the Company’s market research service overseas. The two individuals signed borrowing contracts with a ~~certificate~~principal amount of ~~land~~$70,000 ~~use~~and ~~right~~$855,000, byrespectively, ~~the~~on ~~local~~February ~~government~~29, ~~which~~2024. isThose ~~estimated~~contracts were issued to bethe ~~obtained~~Company byto evidence the ~~second~~advances, ~~half~~bearing of3.45% ~~2026~~interest per annum, ~~the~~and ~~Company~~payable ~~will~~on ~~reclassify~~February ~~this~~28, ~~prepayment~~2025, toand ~~intangible~~extended ~~assets~~till ~~accordingly~~August 29, 2026. (v) Other receivables are mainly employee advances, and prepaid expenses.

~~(ii) On July 28, 2021, Sichuan Vtouch made a security deposit of RMB393,000 (equivalent to $54,157) to Chengdu Cross~~F-Strait Science and Technology Industry Development Park Management Committee to obtain a construction license for its new facility. This deposit will be refunded upon the issuance of the construction license, which is expected to be by the second half of 2025. (iii) In May 2023, the Company entered into two third-party consulting service agreements for a fee of $1.35 million and $3.1 million, respectively, for the three-year consulting services. The total fee would be amortized over the three-year services and reclassified to stock issuance costs accordingly. As of March 31, 2025, the Company recognized $357,390 for this prepaid consulting service fees within one year. (iv) On February 29, 2024, the Company advanced market research fees $70,000 and $855,000, respectively, to two unrelated individuals, Mr. Chien Hui Chueh and Mr. Cheung Ming Lin, in relation to the Company’s market research service overseas. The two individuals signed borrowing contracts with a principal amount of $70,000 and $855,000, respectively, on February 29, 2024. Those contracts were issued to the Company to evidence the advances, bearing 3.45% interest per annum, and payable on February 28, 2025, and extended till August 29, 2026. (v) Other receivables are mainly employee advances, and prepaid expenses.10

~~F-10~~NOTE 5 — PROPERTY, PLANT AND EQUIPMENT, NET

NOTE 5 — PROPERTY, PLANT AND EQUIPMENT, NET

	June 30, 2025			December 31, 2024
Buildings	$	12,022		$	11,798
Machinery and equipment		7,817			7,672
Vehicles		40,875			40,114
Construction in progress		12,997,423			12,755,791
Subtotal		13,058,137			12,815,375
Less: accumulated depreciation		(38,010	)		(32,378	)
Property, plant and equipment, net	$	13,020,127			12,782,997	)

	March 31, 2025			December 31, 2024
		(Unaudited)
Buildings	$	11,868		$	11,798
Machinery and equipment		7,716			7,672
Vehicles		40,350			40,114
Construction in progress		12,830,673			12,755,791
Subtotal		12,890,607			12,815,375
Less: accumulated depreciation		(35,045	)		(32,378	)
Property, plant and equipment, net	$	12,855,562		$	12,782,997

Depreciation expense was $2,482 and $2,372 for the three months ended June 30, 2025 and 2024, respectively, and $4,957 and $4,798 for the six months ended June 30, 2025 and 2024, respectively.

~~Depreciation~~As ~~expense~~of ~~was~~June $230,~~471~~ ~~and $2~~2025,~~316~~ ~~for~~ the ~~three-month~~Company ~~period~~had ~~ended~~commitment of ~~March~~RMB5.0 ~~31,~~million ~~2025~~(equivalent ~~and~~to ~~2024,~~$0.7 ~~respectively~~million) for construction in progress of our new facility.

~~As of~~NOTE ~~March~~6 ~~31,~~— ~~2025,~~OPERATING ~~the Company had commitment of RMB5.0 million (equivalent to $0.7 million) for construction in progress of our new facility.~~LEASE

~~NOTE~~In March 2021, pursuant to the local PRC government 6guidelines —on ~~OPERATING~~local ~~LEASE~~environmental issues and the national plan, the Company was under the government directed relocation order to relocate from a parcel of state-owned land where we maintained our executive offices, research and development facilities and factories. The Company received a total amount of RMB115.2 million (approximately $17.7 million) from the local government (see ITEM 2. PROPERTIES AND FACILITIES) to start the construction of the new facility in a neighboring Chengdu Wenjiang District.

In On March 16, 2021, ~~pursuant~~in order to ~~the~~minimize ~~local~~interruption of ~~PRC~~the ~~government~~Company’s ~~guidelines~~business, onSichuan ~~local~~Vtouch entered ~~environmental~~into ~~issues~~a ~~and~~leasing ~~the~~agreement ~~national~~with ~~plan,~~Sichuan ~~the~~Renshou ~~Company~~Shigao ~~was~~Tianfu ~~under~~Investment ~~the~~Co., ~~government~~Ltd. ~~directed~~(later ~~relocation~~renamed ~~order~~as toMeishan ~~relocate~~Huantian ~~from~~Industrial Co., Ltd.), a ~~parcel~~limited ofliability ~~state-~~company owned ~~land~~by ~~where~~the welocal ~~maintained~~government, ~~our~~to ~~executive~~lease the ~~offices~~property, ~~research~~ and ~~development~~all buildings, facilities and ~~factories.~~equipment ~~The~~thereon ~~Company~~(the ~~received~~“Demised Properties) of Sichuan Wetouch, commencing from April 1, 2021 until December 31, 2021 at a ~~total~~monthly ~~amount~~rent of ~~RMB115.2~~RMB300,000 ~~million~~ (~~approximately~~ $1741,100), which period was extended to October 31, 2022.7 ~~million)~~The ~~from~~lease ~~the~~was ~~local~~renewed ~~government~~on ~~(see~~October ~~ITEM~~30, 2.2022, ~~PROPERTIES~~October ~~AND~~30, ~~FACILITIES)~~2023 toand ~~start~~August ~~the~~9, ~~construction~~2024, respectively, with a monthly rent of RMB 400,000 ($55,837), the term ~~new~~of ~~facility~~which inhas abeen ~~neighboring~~extended ~~Chengdu~~to ~~Wenjiang District~~October 31, 2025 for the use of the Demised Properties.

~~On March~~The ~~16, 2021, in order to minimize interruption of the~~ Company’s ~~business,~~new ~~Sichuan~~facility ~~Vtouch entered~~started ~~into~~in aAugust 2021 ~~leasing~~yet ~~agreement with~~was ~~Sichuan~~delayed ~~Renshou~~and ~~Shigao~~suspended ~~Tianfu~~due ~~Investment~~to ~~Co.,~~the ~~Ltd.~~outbreak ~~(later~~of ~~renamed~~Covid-19 asand ~~Meishan~~government-ordered ~~Huantian~~shutdowns ~~Industrial~~in CoChina., ~~Ltd.),~~The aCompany ~~limited~~has ~~liability~~rescheduled ~~company~~and ~~owned~~extended by the ~~local~~completion ~~government,~~by toend ~~lease~~of ~~the~~December ~~property~~31, ~~and~~2025 ~~all~~with ~~buildings,~~the ~~facilities~~production ~~and~~at ~~equipment thereon (~~the ~~“Demised Properties)~~new offacilities ~~Sichuan~~will ~~Wetouch,~~ commencing ~~from~~in ~~April~~the 1,second ~~2021~~quarter of ~~until~~2026. ~~December~~For ~~31,~~the ~~2021~~three atand asix ~~monthly~~months ~~rent~~ended ofJune ~~RMB300~~30,~~000~~ ~~($41~~2025,~~100),~~ ~~which period~~management ~~was~~makes ~~extended~~estimates toand ~~October~~assumptions ~~31,~~to ~~2022.~~use ~~The~~the ~~lease~~leasing ~~was~~property ~~renewed~~till the onend ~~October~~of ~~30, 2022,~~ October 302026, ~~2023~~ and ~~August~~applies 9,ASU ~~2024,~~2016-02 ~~respectively, with~~“Leases a(Topic ~~monthly~~842) ~~rent~~as ofpractical ~~RMB~~expedients ~~400,000~~during ~~($54,800),~~ the ~~term~~three ofand ~~which~~six ~~has~~months ~~been~~ended June ~~extended to October 31~~30, 2025 ~~for the use of the Demised Properties~~.

~~The Company’s~~Both ~~new~~operating ~~facility~~lease ~~started~~expense ~~in August 2021 yet was delayed~~ and ~~suspended due to the outbreak of Covid~~short-19term ~~and government-ordered~~lease ~~shutdowns~~expense inare ~~China.~~recognized ~~The Company has rescheduled and extended the completion by end of December 31, 2025 with the production at the new facilities will commencing~~ in ~~the~~cost ~~second quarter~~ of ~~2026.~~revenues ~~For the three months ended March 31, 2025, management makes estimates~~ and ~~assumptions to~~general ~~use the leasing property till the end of October 2026,~~ and ~~applies~~administrative ~~ASU 2016-02 “Leases (Topic 842) as practical expedients during the three months ended March 31, 2025~~expenses.

~~Both operating~~The ~~lease~~components of lease expense ~~and~~for ~~short-term~~the ~~lease~~three ~~expense~~and ~~are~~six ~~recognized~~months inended ~~cost~~June of30, ~~revenues~~2025 and ~~general~~2024 ~~and~~were ~~administrative~~as ~~expenses.~~follows:

The components of lease expense for the three months ended March 31, 2025 and 2024 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Unaudited)				(Unaudited)
Lease expense
Operating lease expense	$	156,869	$	-	$	308,244	$	-
Short-term lease expense		-		146,643		-		294,372
Total lease expense	$	156,869	$	146,643	$	308,244	$	294,372

	For the Three Months Ended March 31,
	2025		2024
Lease expense		(Unaudited)		(Unaudited)
Operating lease expense	$	151,375	$	-
Short-term lease expense		-		147,729
Total lease expense	$	151,375	$	147,729

F-11

~~F-11~~The balances for the operating leases where the Company is the lessee are presented as follows:

The balances for the operating leases where the Company is the lessee are presented as follows:

	June 30, 2025		December 31, 2024
	(Unaudited)
Operating lease right-of-use assets	$	813,516	$	1,055,208
Lease liabilities – current		609,059		571,539
Lease liabilities – non-current		204,458		482,606
Total operating lease liabilities	$	813,517	$	1,054,145

	March 31, 2025		December 31, 2024
		(Unaudited)
Operating lease right-of-use assets	$	952,398	$	1,055,208
Lease liabilities – current		599,654		571,539
Lease liabilities – non-current		352,744		482,606
Total operating lease liabilities	$	952,398	$	1,054,145

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2025:

The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2025:

	Operating lease
	(Unaudited)
2025 lease payment (from July 1, 2025 to December 31, 2025)	$	307,364
2026 lease payment		506,153
Less: imputed interest		-
Present value of lease liabilities	$	813,517

	Operating lease
	(Unaudited)
2025 lease payment (from April 1, 2025 to December 31, 2025)	$	455,131
2026 lease payment		497,267
Less: imputed interest		-
Present value of lease liabilities	$	952,398

Lease term and discount rate:

	For the Six Months Ended June 30,
	2025			2024
	(Unaudited)
Weighted-average remaining lease term (years)
Operating lease		1.4			-

Weighted-average discount rate
Operating lease		1.09	%		-

	For the Three Months Ended March 31,
	2025			2024
Weighted-average remaining lease term (years)	(Unaudited)
Operating lease		1.6			-
Weighted-average discount rate
Operating lease		1.09	%		-

Supplemental cash flow information related to leases where the Company was the lessee for the six months ended June 30,2025 was as follows:

Supplemental cash flow information related to leases where the Company was the lessee for the three months ended March 31, 2025 was as follows:

	For the Six Months Ended June 30,
	2025		2024
	(Unaudited)
Cash payments for operating lease	$	303,592	$	-
Lease liabilities arising from obtaining right-of-use assets		49,775		-

	For the Three Months Ended March 31,
	2025		2024
	(Unaudited)
Cash payments for operating lease	$	151,375	$	-
Lease liabilities arising from obtaining right-of-use assets		47,251		-

F-12

~~F-12~~NOTE 7 — RELATED PARTY TRANSACTIONS

~~NOTE~~Amounts 7due —to ~~RELATED~~a ~~PARTY~~related ~~TRANSACTIONS~~party were as follows:

Amounts due to a related party are as follows:

	Relationship	June 30, 2025		December 31, 2024		Note
Chengdu Wetouch Intelligent Optoelectronics Co., Ltd.	An affiliate of Ms. Jiaying Cai, director of the Company	$	642,634	$	149,211	Payable to affiliate for expenses paid on behalf of the Company
Total		$	642,634	$	149,211

	Relationship	March 31, 2025		December 31, 2024		Note
			(Unaudited)
Chengdu Wetouch Intelligent Optoelectronics Co., Ltd.	Affiliate of Ms. Jiaying Cai, director of the Company	$	400,513	$	149,211	Payable to affiliate for expenses paid on behalf of the Company
Total		$	400,513	$	149,211

Chengdu Wetouch Intelligent Optoelectronics Co., Ltd., was incorporated on December 30, 2020 in Chengdu, Sichuan Province under the laws of PRC, with Ms. Jiaying Cai, a director of the Company as its sole shareholder holding 100% of its equity interests.

~~Chengdu~~NOTE ~~Wetouch~~8 ~~Intelligent~~— ~~Optoelectronics~~INCOME Co., Ltd., was incorporated on December 30, 2020 in Chengdu, Sichuan Province under the laws of PRC, with Ms. Jiaying Cai, a director of the Company as its sole shareholder holding 100% of its equity interests.TAXES

~~NOTE 8~~Wetouch ~~— INCOME TAXES~~

Wetouch is subject to a tax rate of 21% per year beginning 2018, and files a U.S. federal income tax return.

~~Wetouch is~~BVI ~~subject to a tax rate of 21% per beginning 2018, and files a U.S. federal income tax return.~~Wetouch

~~BVI~~Under the current laws of the British Virgin Islands, BVI Wetouch, a wholly owned subsidiary of Wetouch, is not subject to tax on its income or capital gains. In addition, no British Virgin Islands withholding tax will be imposed upon the payment of dividends by the Company to its stockholders.

~~Under the~~Hong current laws of the British Virgin Islands, BVI Wetouch, a wholly owned subsidiary of Wetouch, is not subject to tax on its income or capital gains. In addition, no British Virgin Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.Kong

HK Wetouch is subject to profit taxes in Hong Kong at a progressive rate of 16.5%.

~~HK Wetouch is subject to profit taxes in Hong Kong at a progressive rate of 16.5%.~~PRC

Sichuan Wetouch and Sichuan Vtouch files income tax returns in the PRC. Effective from January 1, 2008, the PRC statutory income tax rate is 25% according to the Corporate Income Tax (“CIT”) Law which was passed by the National People’s Congress on March 16, 2007.

~~Sichuan Wetouch~~Under ~~and~~PRC ~~Sichuan~~CIT ~~Vtouch~~Law, ~~files~~domestic ~~income~~enterprises ~~tax~~and ~~returns~~foreign investment inenterprises (the ~~PRC.~~“FIEs”) ~~Effective~~are ~~from~~usually ~~January~~subject 1,to ~~2008,~~a ~~the~~unified ~~PRC~~25% ~~statutory~~enterprise income tax rate iswhile preferential tax ~~25%~~rates, ~~according~~tax holidays and even tax exemption may be granted on a case-by-case basis by local government as preferential tax treatment to High ~~the~~and ~~Corporate~~New ~~Income~~Technology ~~Tax~~Enterprises (the “~~CIT~~HNTEs”). ~~Law~~Under ~~which~~this ~~was~~preferential ~~passed~~tax bytreatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for their HNTE status every three years. Pursuant to an approval from the local ~~National~~tax ~~People’s~~authority ~~Congress~~in onOctober ~~March~~2017, 16Sichuan Wetouch became a qualified enterprise located in the western region of the PRC, entitled ~~2007~~it to a preferential income tax rate of 15% from October 11, 2017 to October 11, 2020.

~~Under PRC~~On ~~CIT~~October ~~Law~~21, ~~domestic enterprises and foreign investment enterprises (the “FIEs”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates~~2020, ~~tax~~Sichuan ~~holidays~~Wetouch ~~and~~was ~~even tax exemption may be~~ granted on a case-by-case basis by ~~local~~Sichuan Provincial government as ~~preferential tax treatment to High and New Technology Enterprises (the “HNTEs”). Under this preferential tax treatment, HNTEs are entitled to~~ an ~~income tax rate of 15%, subject to a requirement that they re-apply for their~~ HNTE ~~status every three years. Pursuant to an approval from the local tax authority in October 2017~~, ~~Sichuan Wetouch became a qualified enterprise located in the western region of the PRC,~~ entitled it to a ~~preferential~~reduced income tax rate of 15% from October 1121, ~~2017~~2020 until to October 1120, ~~2020~~2023.

~~On October 21, 2020,~~ Sichuan ~~Wetouch~~Vtouch ~~was~~is ~~granted~~subject ~~on a case-by-case basis by Sichuan Provincial government as an HNTE , entitled~~ to a ~~reduced~~ 25% income tax rate ~~of 15% from October 21, 2020 until October 20, 2023~~.

FThe CIT Law and its implementation rules impose a withholding income tax at 10%, unless reduced by a tax treaty or arrangement, on the amount of dividends distributed by a PRC-13resident enterprise to its immediate holding company outside the PRC that are related to earnings accumulated beginning on January 1, 2008. Dividends relating to undistributed earnings generated prior to January 1, 2008 are exempt from such withholding income tax.

~~Sichuan Vtouch is subject to a 25% income tax rate.~~F-13

The ~~CIT~~ ~~Law~~Company’s ~~and~~provision for ~~its implementation rules impose a withholding~~ income ~~tax~~taxes atexpenses ~~10%,~~consisted ~~unless reduced by a tax treaty or arrangement, on the amount~~ of dividends distributed by a PRC-resident enterprise to its immediate holding company outside the PRC that are related to earnings accumulated beginning on January 1, 2008. Dividends relating to undistributed earnings generated prior to January 1, 2008 are exempt from such withholding income tax.:

The Company’s provision for income taxes credit (expenses) consisted of:

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Unaudited)				(Unaudited)
PRC income tax
Income tax provision	$	860,267	$	1,099,331	$	2,336,755	$	1,761,179
Deferred income tax expenses		16,455		-		11,073		-
Sub total	$	876,722	$	1,099,331	$	2,347,828	$	1,761,179

US		-		-		-		-
BVI		-		-		-		-
Hong Kong		-		-		-		-
Income tax provision	$	876,722	$	1,099,331	$	2,347,828	$	1,761,179

	For the Three Months Ended March 31,
PRC income tax	2025			2024
	(Unaudited)
Income tax provision	$	1,476,488		$	661,848
Deferred income tax expenses		(5,382	)		-
Total	$	1,471,106		$	661,848
US		-			-
BVI		-			-
Hong Kong		-			-
Income tax provision	$	1,471,106		$	661,848

The following table reconciles the PRC statutory rates to the Company’s effective tax rate for the three and six months June 30, 2025 and 2024:

The following table reconciles the PRC statutory rates to the Company’s effective tax rate for the three months March 31, 2025 and 2024:

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	(Unaudited)						(Unaudited)
PRC statutory income tax rate		25.0	%		25.0	%		25.0	%		25.0	%
Income tax computed at PRC statutory corporate income tax rate of 25%		28.0	%		28.9	%		30.0	%		35.3	%
Tax rate differential on entities not subject to PRC income		(0.5	)%		(0.6	)%		(0.8	)%		(1.6	)%
R&D additional deduction		0.0	%		0.3	%		0.0	%		0.4	%
Change in valuation allowance		0.0	%		(0.2	)%		0.0	%		(0.2	)%
Temporary differences		2.1	%		0.0	%		0.2	%		0.3	%
Non-deductible expenses		(1.5	)%		0.5	%		3.4	%		0.9	%
Effective tax rate		28.1	%		28.9	%		32.8	%		35.1	%

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)
PRC statutory income tax rate		25.0	%		25.0	%
Income tax computed at PRC statutory corporate income tax rate of 25%		31.6	%		55.2	%
Tax rate differential on entities not subject to PRC income		(1.1	)%		(4.8	)%
R&D additional deduction		0.0	%		(0.9	)%
Change in valuation allowance		0.0	%		0.2	%
Temporary differences		(0.1	)%		1.4	%
Non-deductible expenses		6.1	%		3.1	%
Effective tax rate		36.5	%		54.2	%

The Company follows ASC 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company’s ~~follows ASC 740, “Income Taxes”, which requires the recognition of~~ deferred tax assets ~~and liabilities for the expected~~ ~~future~~consisted ~~tax consequences~~ of ~~events that have been included in~~ the ~~financial~~following statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.components:

F-14

	As of June 30, 2025			As of December 31, 2024
	(Unaudited)
Deferred tax assets:
Credit loss on advance to vendors	$	22,600		$	11,056
Provision of obsolete inventory		7,991			30,607
Leasing liabilities		200,883			263,536
Total gross deferred tax assets		231,474			305,199
Less valuation allowance		-			-
Deferred tax assets net of valuation allowance		231,474			305,199

Deferred tax liabilities:
Right-of-use assets		(200,883	)		(263,802	)
Deferred tax liabilities		(200,883	)		(263,802	)
Deferred tax assets, net	$	30,591		$	41,397

The Company’s ~~deferred~~continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax ~~assets~~law ~~consisted~~and new authoritative rulings. As of ~~the~~June ~~following~~30, ~~components:~~2025 and December 31, 2024, taxes for Sichuan Vtouch remained open for statutory examination by PRC tax authorities.

	As of March 31, 2025			As of December 31, 2024
Deferred tax assets:	(Unaudited)
Credit loss on advance to vendors	$	24,453		$	11,056
Provision of obsolete inventory		22,582			30,607
Leasing liabilities		238,099			263,536
Total gross deferred tax assets		285,134			305,199
Less valuation allowance		-
Deferred tax assets net of valuation allowance		285,134			305,199
Deferred tax liabilities:
Right-of-use assets		(238,099	)		(263,802	)
Deferred tax liabilities		(238,099	)		(263,802	)
Deferred tax assets, net	$	47,035		$	41,397

F-14

~~The~~NOTE ~~Company~~9 ~~continually~~— ~~evaluates~~ACCRUED ~~expiring~~EXPENSES ~~statutes of~~AND ~~limitations,~~OTHER ~~audits, proposed settlements, changes in tax law and new authoritative rulings. As of March 31, 2025 and December 2024,~~CURRENT ~~taxes for Sichuan Vtouch remained open for statutory examination by PRC tax authorities.~~LIABILITIES

~~NOTE 9~~Accrued —expenses ~~ACCRUED~~and ~~EXPENSES~~other ~~AND~~current ~~OTHER~~liabilities consist ~~CURRENT~~of ~~LIABILITIES~~the following:

Accrued expenses and other current liabilities consist of the following:

	June 30, 2025		December 31, 2024
	(Unaudited)
Advance from customers	$	-	$	166,535
Accrued payroll and employee benefits		82,340		81,837
Accrued legal compensation charges		-		35,356
Accrued professional fees		148,199		57,173
Accrued director fees		58,417		66,734
Other payable to third parties		629,694		147,102
Other tax payables (i)		344,175		162,888
Others (ii)		145,245		248,836
Accrued expenses and other current liabilities	$	1,408,070	$	966,461

	March 31, 2025		December 31, 2024
		(Unaudited)
Advance from customers	$	167,513	$	166,535
Accrued payroll and employee benefits		82,318		81,837
Accrued legal compensation charges (i)		-		35,356
Accrued professional fees		147,737		57,173
Accrued director fees		86,171		66,734
Other payable to third parties		629,694		147,102
Other tax payables (ii)		296,946		162,888
Others (v)		148,236		248,836
Accrued expenses and other current liabilities	$	1,558,615	$	966,461

(i)	Other tax payable mainly represent value added tax payable.

(iii) ~~Other~~Others ~~tax payable~~ mainly represent ~~value~~accrued ~~added~~employee ~~tax~~reimbursement payable and other accrued miscellaneous operating expenses.

~~(ii)~~NOTE ~~Others~~10 ~~mainly~~— ~~represent~~CONVERTIBLE PROMISSORY ~~accrued~~NOTES ~~employee reimbursement payable and other accrued miscellaneous operating expenses.~~PAYABLE

~~F-15~~a) Convertible promissory notes

~~NOTE~~In October, November, 10and —December ~~CONVERTIBLE~~2021, ~~PROMISSORY~~the ~~NOTES~~Company, ~~PAYABLE~~issued seven (7) convertible promissory notes (the “Notes”) of an aggregate principal amount of $2,250,000, due in one year with discounted issuance price at 90.0%. The Notes bore interest at a rate of 8.0% per annum, payable in one year and matured on October 27, November 5, November 16, November 29, and December 2, 2022, respectively. Net proceeds after debt issuance costs and debt discounts were approximately $1,793,000. Debt issuance costs in the amount of $162,000 are recorded as deferred charges and included in the other current assets on the consolidated balance sheet. The debt discount and debt issuance costs are amortized into interest expense using the effective interest method over the terms of the Notes.

aUnless the Notes are converted, the principal amounts of the Notes, and accrued interest at the rate of 8% per annum, are payable on the one-year anniversary of the issuance of the Notes (the “Maturity Date”). If the Company fails to satisfy its loan obligation by the Maturity Date, ~~Convertible~~the ~~promissory~~default ~~notes~~interest rate will be 16%.

InThe Lenders have the ~~October,~~right ~~November,~~to ~~and~~convert ~~December~~any ~~2021,~~or ~~the~~all ~~Company,~~of ~~issued~~the ~~seven~~principal ~~(7)~~and ~~convertible~~accrued ~~promissory~~interest ~~notes~~on (the “Notes”) ofinto anshares ~~aggregate principal amount~~ of ~~$2,250,000,~~common ~~due~~stock inof ~~one~~the ~~year~~Company ~~with~~on ~~discounted~~the ~~issuance~~earlier of ~~price~~(i) at180 ~~90.0%.~~calendar ~~The~~days ~~Notes~~after ~~bore~~the ~~interest~~issuance atdate ~~a rate~~ of ~~8.0%~~the ~~per annum,~~Notes ~~payable~~or in(ii) ~~one~~the ~~year~~closing ~~and~~of ~~matured~~a onlisting ~~October~~for ~~27,~~trading ~~November~~of 5,the ~~November~~common ~~16,~~stock ~~November~~of ~~29,~~the Company ~~and~~on ~~December~~a 2,national ~~2022,~~securities ~~respectively.~~exchange ~~Net~~offering ~~proceeds after~~resulting ~~debt~~in ~~issuance~~gross ~~costs~~proceeds ~~and~~to ~~debt~~the ~~discounts~~Company ~~were~~of ~~approximately~~ $115,~~793~~000,000. ~~Debt~~or ~~issuance~~more ~~costs~~(an in“Uplist Offering”). If the ~~amount~~Company ofcloses ~~$162,000~~an ~~are~~Uplist ~~recorded as~~Offering ~~deferred~~on ~~charges~~or ~~and~~before ~~included in~~ the ~~other~~180th ~~current~~calendar ~~assets~~date onafter the ~~consolidated~~issuance ~~balance~~date of ~~sheet.~~the ~~The~~Notes, ~~debt~~the ~~discount~~conversion ~~and~~price ~~debt~~shall ~~issuance~~be ~~costs are~~70% ~~amortized~~of ~~into~~the ~~interest~~per ~~expense~~share ~~using~~offering ~~the~~price ~~effective~~in ~~interest~~the ~~method~~Uplist ~~over~~Offering; otherwise, the ~~terms~~conversion ofprice is ~~the~~$15.0 ~~Notes~~per share.

~~Unless the~~Subject ~~Notes~~to ~~are converted~~customary exceptions, if the ~~principal~~Company ~~amounts~~issues ofshares ~~the~~or ~~Notes,~~any ~~and~~securities ~~accrued~~convertible ~~interest~~into atshares ~~the rate~~ of 8%common ~~per~~stock ~~annum,~~at ~~are~~an ~~payable~~effective onprice ~~the~~per ~~one-year~~share lower ~~anniversary~~than of the ~~issuance~~conversion price of the Notes, (the ~~“Maturity~~conversion ~~Date”).~~rate Ifof the ~~Company~~Notes ~~fails~~shall tobe ~~satisfy~~reduced ~~its~~to ~~loan~~such ~~obligation~~lower ~~by the Maturity Date, the default interest rate will be 16%~~price.

~~The~~Until the Notes are either ~~Lenders~~paid ~~have~~or ~~the~~converted ~~right~~in totheir ~~convert~~entirety, ~~any~~the orCompany ~~all~~agreed ofwith the ~~principal~~Lenders ~~and~~not ~~accrued~~to ~~interest~~sell onany ~~the~~securities ~~Notes~~convertible into shares of common stock of the Company on ~~the earlier of~~ (i) ~~180~~at ~~calendar~~a ~~days~~conversion ~~after~~price that is based on the ~~issuance~~trading ~~date~~price of the ~~Notes~~stock or (ii) ~~the~~with ~~closing of~~ a ~~listing~~conversion ~~for~~price ~~trading~~that ~~of the common~~is ~~stock~~subject ofto ~~the~~being ~~Company~~reset onat a ~~national~~future ~~securities~~date ~~exchange~~or ~~offering~~upon ~~resulting~~an inevent ~~gross~~directly ~~proceeds~~or indirectly related to the ~~Company~~business of ~~$15,000,000 or more (an “Uplist Offering”). If~~ the Company ~~closes an Uplist Offering on~~ or ~~before~~ the ~~180th~~market ~~calendar date after~~for the ~~issuance~~common ~~date~~stock. ofThe ~~the~~Company ~~Notes,~~also ~~the~~agreed ~~conversion~~to ~~price~~not ~~shall~~issue besecurities ~~70%~~at ofa ~~the~~future ~~per~~determined ~~share offering~~ price ~~in the Uplist Offering; otherwise, the conversion price is $15~~.~~0 per share.~~

Subject to customary exceptions, if the Company issues shares or any securities convertible into shares of common stock at an effective price per share lower than the conversion price of the Notes, the conversion rate of the Notes shall be reduced to such lower price.F-15

~~Until the~~The ~~Notes~~Lenders ~~are~~have ~~either~~the right ~~paid~~to orrequire ~~converted in their entirety,~~ the Company ~~agreed~~to ~~with~~repay the ~~Lenders~~Notes ~~not~~if ~~to sell any securities convertible into shares of common stock of~~ the Company ~~(i)~~receives atcash aproceeds, ~~conversion~~including ~~price~~proceeds ~~that~~from iscustomers ~~based~~and on the ~~trading price~~ issuance of ~~the~~equity ~~stock or~~ (~~ii)~~including ~~with~~in athe ~~conversion price~~Uplist ~~that~~Offering). isIf ~~subject~~the toCompany ~~being~~prepays ~~reset~~the atNotes aprior ~~future date or upon an event directly or indirectly related~~ to the ~~business~~Maturity ofDate, the Company or ~~the~~shall ~~market~~pay ~~for the common stock. The Company also agreed to not issue securities at~~ a ~~future~~10% prepayment ~~determined price~~penalty.

~~The Lenders~~From ~~have~~December ~~the~~28, ~~right~~ 2022 to ~~require~~April 6, 2023, the ~~Company~~lenders toof ~~repay~~five ~~the~~outstanding Notes ifand the Company ~~receives~~entered ~~cash~~into ~~proceeds,~~an ~~including~~amendment ~~proceeds~~to ~~from customers and~~ the ~~issuance~~Notes ~~of equity~~ (~~including~~“Amendment inNo. ~~the~~1 to ~~Uplist~~Promissory ~~Offering~~Note”). Ifextending the ~~Company~~term ~~prepays~~of the Notes ~~prior~~for toan ~~the~~additional ~~Maturity~~6 ~~Date, the Company shall pay a 10% prepayment penalty~~months.

From ~~December~~ ~~28,~~August ~~2022~~29 to ~~April 6~~September 9, 2023, the lenders of ~~five~~the outstanding Notes and the Company entered into an amendment to the Notes (“Amendment No. 12 to Promissory Note”) ~~extending~~that upon the ~~term~~listing of the ~~Notes~~Company’s ~~for~~common anstock ~~additional~~on 6the ~~months~~Nasdaq Capital Market (the “Uplist”), the Company shall within three (3) business days after the Uplist, pay to the Holders amounts equal to 105% of the total outstanding balance of the Convertible Debenture.

~~From August~~During 29the toyear ~~September~~ended December 931, 2023, ~~the~~principal ~~lenders~~and ofdefault ~~the~~charges ~~outstanding~~totaling ~~Notes~~$1,200,000 ~~and~~were ~~the~~converted ~~Company entered~~ into an25,000 ~~amendment~~shares ~~to the Notes (“Amendment No. 2 to Promissory Note”) that upon the listing~~ of ~~the Company’s~~ common stock ~~on the Nasdaq Capital Market (the “Uplist”), the Company shall within three (3) business days after the Uplist, pay to the Holders amounts equal to 105%~~ of the ~~total outstanding balance of the Convertible Debenture~~Company.

During the year ended December 31, 2023, principal, accrued and unpaid interest and default charges totaling $1,~~200~~038,~~000~~426 were converted into 2569,~~000~~228 shares of common stock of the Company. Two notes were fully converted.

~~During~~On February 23, 2024, immediately upon the ~~year~~closing ~~ended~~of ~~December~~the ~~31,~~2024 ~~2023,~~Public ~~principal~~Offering, ~~accrued~~the ~~and~~Company ~~unpaid~~made ~~interest~~a ~~and~~full ~~default~~payment ~~charges~~of ~~totaling~~ $12,~~038~~586,~~426~~960 ~~were~~under ~~converted~~the ~~into~~remaining five outstanding 69promissory notes,~~228~~ ~~shares~~including ofthe ~~common~~principal ~~stock~~ of $1,400,750 and the ~~Company~~related accrued interests and default charges of $1,186,210. ~~Two~~There were no convertible promissory notes ~~were~~as ~~fully~~of ~~converted~~February 23, 2024.

OnDuring ~~February~~the ~~23,~~three ~~2024, immediately~~and ~~upon~~six ~~the~~months ~~closing~~ended ofJune ~~the~~30, 2024 ~~Public Offering~~, ~~the~~amortization ~~Company~~of discounts ~~made~~and aissuance ~~full~~cost ~~payment~~ of ~~$2,586,960 under~~ the ~~remaining five outstanding promissory~~ notes, ~~including~~were ~~the principal of~~ $15,~~400,750~~715 and ~~the related accrued interests and default charges of~~ $15,~~186~~715,~~210.~~ ~~There were no convertible promissory notes as of February 23, 2024~~respectively.

~~During~~For the three and six months ended ~~March~~June 3130, ~~2025 and~~ 2024, ~~amortization~~the ofCompany ~~discounts~~recognized ~~and~~interest ~~issuance~~expenses ~~cost~~ of the ~~notes~~Notes ~~were~~in ~~nil~~the amount $1,169,974 and $51,~~715~~169,974, respectively.

~~For the~~b) ~~three-month period ended March 31, 2025 and 2024, nil and US$1,169,974 interest expenses of the Notes were recognized, respectively.~~Warrants

~~F-16~~Accounting for Warrants

b)In connection with the issuance of the Notes, the Company also issued to the lenders seven (7) three-year warrants (the “Note Warrants”) to purchase an aggregate of 90,000 shares of the Company’s common stock (the “Warrant Shares”).

~~Accounting~~The Note Warrants issued to the lenders granted the holders the rights to purchase up to 10,000 shares of common stock of the Company at an exercise price of $25 per share. However, if the Company closes an Uplist Offering on or before the 180th calendar date after the issuance date of the Note Warrants, then the exercise price shall be 125% of the offering price of a share in the Uplist Offering. If the adjusted exercise price as a result of the Uplist Offering is less than $25 per share, then the number of shares for which the Warrants are exercisable shall be increased such that the total exercise price, after taking into account the decrease in the per share exercise price, shall be equal to the total exercise price prior to such adjustment.

~~In connection~~The ~~with~~lenders have the right ~~issuance~~to ofexercise the ~~Notes,~~Note ~~the~~Warrants ~~Company~~on ~~also~~a ~~issued~~cashless tobasis if the ~~lenders~~highest ~~seven~~traded ~~(7)~~price ~~three-year~~of ~~warrants~~a (share of common stock of the ~~“Note~~Company ~~Warrants”)~~during the to150 ~~purchase~~trading andays ~~aggregate~~prior to exercise of 90the Note Warrants exceeds the exercise price,~~000~~ ~~shares~~unless there is an effective registration statement of the Company’s ~~common~~which ~~stock~~covers (the ~~“Warrant~~resale ~~Shares”)~~of the Lenders.

~~The Note~~If ~~Warrants issued to~~ the ~~lenders~~Company ~~granted~~issues shares ~~the~~or ~~holders~~any ~~the~~securities ~~rights~~convertible tointo ~~purchase up to 10,000~~ shares ~~of common stock of the Company~~ at an ~~exercise~~effective price ~~of $25~~ per share. ~~However,~~lower ifthan the ~~Company~~exercise ~~closes~~price ~~an Uplist Offering on or before the 180th calendar date after the issuance date~~ of the Note Warrants, ~~then~~ the ~~exercise price shall be 125% of the offering price of a share in the Uplist Offering.~~ ~~If the adjusted~~ exercise price ~~as a result~~ of the ~~Uplist~~Note ~~Offering is less than $25 per share, then the number of shares for which the~~ Warrants ~~are exercisable~~ shall be ~~increased~~reduced to such ~~that~~lower ~~the total exercise~~ price, ~~after~~subject ~~taking into account the decrease in the per share exercise price, shall be equal~~ to ~~the~~customary ~~total exercise price prior to such adjustment~~exceptions.

The lenders ~~have~~may not convert the ~~right~~Notes toor exercise the Note Warrants onif asuch ~~cashless~~conversion ~~basis~~or ifexercise ~~the~~will ~~highest~~result ~~traded~~in ~~price~~each of athe ~~share~~lenders, oftogether ~~common~~with ~~stock~~any ~~of the~~affiliates, ~~Company~~beneficially ~~during~~owning ~~the~~in ~~150~~excess ~~trading~~of ~~days~~4.9% ~~prior to exercise~~ of the ~~Note~~Company’s ~~Warrants~~outstanding ~~exceeds~~shares ~~the~~of ~~exercise~~common ~~price,~~stock ~~unless~~immediately ~~there~~after isgiving aneffect ~~effective~~to ~~registration~~such ~~statement~~exercise ofunless such lender notifies the Company ~~which~~at ~~covers~~least ~~the~~61 ~~resale~~days ofprior ~~the~~to ~~Lenders~~such exercise.

If the Company issues shares or any securities convertible into shares at an effective price per share lower than the exercise price of the Note Warrants, the exercise price of the Note Warrants shall be reduced to such lower price, subject to customary exceptions.F-16

~~The lenders~~During ~~may~~the ~~not~~year ~~convert~~ended December ~~the~~31, ~~Notes~~2023, ortwo ~~exercise~~lenders exercised the Note Warrants ifcashlessly ~~such~~for ~~conversion or exercise will result in each of the lenders~~22,338 ~~together with any affiliates, beneficially owning in excess of 4.9% of the Company’s outstanding~~ shares of common stock ~~immediately~~of ~~after giving effect to such exercise unless such lender notifies~~ the Company ~~at least 61 days prior to such exercise~~.

During the ~~year~~six months ended ~~December~~June 3130, ~~2023~~2024, ~~two~~one lender ~~lenders~~ exercised the Note Warrants cashlessly for 22 2,~~338~~ 725 shares of common stock ~~of the Company~~.

~~During~~ As the ~~three~~Note ~~months~~Warrant ~~ended~~was ~~March~~issued ~~31,~~in ~~2024,~~2021 ~~one~~and ~~lender~~was valid ~~exercised~~for three years, the remaining 38430 Note Warrants ~~cashlessly~~expired ~~for 2,725 shares~~during ofthe ~~common~~six ~~stock~~months ended June 30, 2024.

As During the ~~Note~~three ~~Warrant~~and ~~was~~six ~~issued~~months inended ~~2021~~June ~~and~~30, 2024, ~~was~~the ~~valid~~Company ~~for~~recorded ~~three~~$37,751 ~~years~~and $45,572 gain on changes in the ~~remaining~~fair ~~38430~~value ~~Note~~of ~~Warrant~~common ~~was~~stock ~~expired~~purchase ~~during~~warrants ~~the~~liability ~~year~~using ~~ended~~the ~~December~~Black-Scholes ~~31,~~option-pricing ~~2024~~model.

~~During the~~(c) ~~three months ended March 31, 2024, the Company recorded $7,821 gain on changes in the fair value of common stock purchase warrants~~Registration ~~liability~~Rights ~~using the Black-Scholes option-pricing model.~~Agreements

~~(c)~~Pursuant to the terms of the Registration Rights Agreements between the Company and lenders of the Notes, the Company agreed to file a registration statement with the Securities and Exchange Commission to register the shares of common stock underlying the Notes and the shares issuable upon exercise of the Note Warrants within sixty days from the date of each Registration Rights Agreement. The Company also granted the lenders piggyback registration rights on such securities pursuant to the Purchase Agreements.

~~Pursuant to~~NOTE ~~the~~11 ~~terms~~— ofSTOCKHOLDERS’ the Registration Rights Agreements between the Company and lenders of the Notes, the Company agreed to file a registration statement with the Securities and Exchange Commission to register the shares of common stock underlying the Notes and the shares issuable upon exercise of the Note Warrants within sixty days from the date of each Registration Rights Agreement. The Company also granted the lenders piggyback registration rights on such securities pursuant to the Purchase Agreements.EQUITY

~~F-17~~1) Common Stock

~~NOTE~~The 11Company’s —authorized ~~STOCKHOLDERS’~~shares of common ~~EQUITY~~stock was 15,000,000 shares with par value of $0.001.

1)On ~~Common~~December ~~Stock~~22, 2020, the Company issued 5,181 shares of common stock to The Crone Law Group, P.C. or its designees for legal services (see Note 12).

~~The~~On ~~Company’s~~January ~~authorized~~1, ~~shares~~2021, ofthe ~~common stock~~Company ~~was~~issued an aggregate of 15,~~000,000~~541 shares ~~with~~to ~~par~~a ~~value~~third ofparty ~~$0.001~~service asprovider offor ~~the~~consulting ~~date~~services ofthat ~~this~~had ~~quarterly~~been ~~report~~rendered.

On ~~December~~April 2214, ~~2020~~April 27 and September 1, ~~the~~2022, the Company issued 5,~~181~~ 777, 5,599 and 2,857 shares of common stock toupon ~~The~~cashless ~~Crone~~exercise ~~Law~~of ~~Group,~~the ~~P.C.~~Note orWarrants ~~its~~to ~~designees~~three ~~for~~lenders, ~~legal services~~ respectively. (see Note 1210 (b)).

OnDuring ~~January~~the 1year ended December 31, ~~2021~~2022, the Company issued an6,211 ~~aggregate~~ shares of ~~15,541~~common ~~shares~~stock to a third party ~~service~~upon ~~provider~~exercise ~~for~~of ~~consulting~~warrants ~~services~~(see ~~that~~Note ~~had been rendered~~12).

OnDuring ~~April~~the ~~14,~~year ~~April~~ended December ~~27 and September 1~~31, 2022, the Company issued 569,~~777,~~228 ~~5,599 and 2,857~~ shares of common ~~stock~~ upon ~~cashless~~conversion ~~exercise~~ of ~~the~~convertible ~~Note~~promissory ~~Warrants~~note topayable ~~three lenders, respectively.~~ (see Note 10 (ba)).

~~During~~On ~~the~~January ~~year ended December 31~~19, ~~2022~~2023, the Company ~~issued~~sold 6an aggregate of 8,~~211~~000,000 shares of common stock to purchasers in a ~~third~~private ~~party~~placement ~~upon~~for ~~exercise~~an aggregate purchase price of ~~warrants~~$40,000,000, ~~(see~~or ~~Note~~$5.00 ~~12)~~per share. On January 20, 2023, the Company received net proceeds of $40 million accordingly.

During the year ended December 31, ~~2022~~2023, the Company issued 6925,~~228~~000 shares of common stock upon conversion of convertible promissory note payable (see Note 10 (a)).

OnDuring ~~January~~the 19year ended December 31, 2023, the Company issued ~~sold an aggregate of 8~~22,~~000,000~~338 shares of common stock to ~~purchasers~~two inthird aparties ~~private~~upon ~~placement~~exercise ~~for an aggregate purchase price~~ of ~~$40,000,000,~~warrants or(see ~~$5.00~~Note ~~per~~10 ~~share~~(b)). ~~On January 20, 2023, the Company received net proceeds of $40 million accordingly.~~

~~During~~On ~~the year ended December 31~~February 20, ~~2023~~2024, the Company issued 252,160,000 shares of common stock ~~upon~~at ~~conversion~~a ofpublic ~~convertible~~offering ~~promissory~~price ~~note~~of ~~payable~~$5.00 ~~(see~~per ~~Note 10 (a))~~share. ~~During~~The ~~the~~Company’s ~~year~~common stock ~~ended~~began ~~December~~trading ~~31,~~on ~~2023,~~ the ~~Company~~Nasdaq ~~issued~~Capital ~~22,338~~Market ~~shares~~under ofthe ~~common~~ticker ~~stock~~symbol to“WETH” ~~two~~on ~~third~~February ~~parties~~21, ~~upon exercise of warrants (see Note 10 (b))~~2024.

OnAs ~~February 20~~of June 30, ~~2024~~2025, ~~the~~there ~~Company issued 2~~were 11,~~160~~931,~~000~~534 shares of common stock issued and ~~at a public offering price of $5~~outstanding.~~00 per share. The Company’s common stock began trading on the Nasdaq Capital Market under the ticker symbol “WETH” on February 21, 2024.~~

~~As of March 31, 2025 and December 31, 2024, there were 11,931,534 shares of common stock issued and outstanding.~~F-17

2) Reverse Stock Split

On February 17, 2023, the Company’s board of directors authorized a reverse stock split of common stock with a ratio of not less than one to five (1:5) and not more than one to eighty (1:80), with the exact amount and the timing of the reverse stock split to be determined by the Chairman of the Board. Upon effectiveness of such reverse stock split, the number of authorized shares of the common stock of the Company will also be decreased in the same ratio. Pursuant to Section 78.209 of the Nevada Revised Statutes, the reverse stock split does not have to be approved by the stockholders of the Company.

On July 16, 2023, the Company’s board of directors approved the reverse stock split of the Company’s common stock at a ratio of 1-for-20. On July 16, 2023, the Company filed a certificate of change (with an effective date of July 16, 2023) with the Nevada Secretary of State pursuant to Section 78.209 of the Nevada Revised Statutes to effectuate a 1-for-20 reverse stock split of its common stock. On September 11, 2023, the reverse stock split was approved by the Financial Industry Regulatory Authority and took effect on September 12, 2023. All share information included in this report has been adjusted as if the reverse stock split occurred as of the earliest period presented.

~~F-18~~3) Closing of the 2024 Public Offering

3)On February ~~Closing~~23, of2024, the ~~2024~~Company ~~Public~~closed ~~Offering~~its offering of 2,160,000 shares of common stock at a public offering price of $5.00 per share, for aggregate gross proceeds of $10.8 million before deducting underwriting discounts, and other offering expenses.

~~On February~~The ~~23,~~Company ~~2024,~~complies with the ~~Company~~requirements ~~closed~~of FASB ~~its~~ASC ~~offering~~Topic ~~of 2~~340-10-S99-1,~~160,000~~ ~~shares~~“Other ofAssets ~~common~~and ~~stock~~Deferred atCosts a– ~~public~~SEC ~~offering~~Materials” ~~price~~(“ASC of340-10-S99”) ~~$5.00~~and ~~per~~SEC Staff ~~share~~Accounting Bulletin Topic 5A, ~~for~~ ~~aggregate~~“Expenses ~~gross~~of ~~proceeds~~Offering”, and charged issuance costs of $~~10.8~~1,810,246 ~~million~~to ~~before~~additional ~~deducting~~paid-in capital ~~underwriting~~during ~~discounts,~~the ~~and~~six ~~other~~months ~~offering~~ended ~~expenses~~June 30, 2024.

~~The Company complies with the requirements of FASB ASC Topic 340-10-S99-1, “Other Assets and Deferred Costs – SEC Materials” (“ASC 340-10-S99”~~3) ~~and~~Statutory ~~SEC~~Reserve ~~Staff Accounting Bulletin Topic 5A, “Expenses of Offering”,~~ and ~~charged~~Restricted ~~issuance costs~~Net ~~of $1,810,246 to additional paid-in capital during the year ended December 31, 2024.~~Assets

4)Under PRC rules and regulations, ~~Statutory~~all ~~Reserve~~companies in the PRC are required to appropriate 10% of their net income to a statutory surplus reserve until the reserve balance reaches 50% of their registered capital. The appropriation to this statutory surplus reserve must be made before distribution of dividends can be made. The statutory reserve is non-distributable, other than during liquidation, and ~~Restricted~~can ~~Net~~be ~~Assets~~used to fund previous years losses, if any, and may be converted into share capital by issuing new shares to existing shareholders in proportion to their shareholders or by increasing the par value of the shares currently outstanding, provided that the remaining balance of the statutory reserve after such issue is not less than 25% of the registered capital.

~~Under PRC~~Appropriations ~~rules~~to ~~and regulations, all companies in~~ the ~~PRC~~discretionary ~~are required to appropriate 10% of their net income to a statutory~~ surplus reserve ~~until~~are ~~the~~made ~~reserve~~at ~~balance~~the ~~reaches~~discretion ~~50%~~ of ~~their~~the ~~registered~~board ~~capital. The appropriation to this statutory surplus reserve must be made before distribution~~ of ~~dividends can be made~~directors. The statutory reserve ismay ~~non-distributable, other than during liquidation, and can~~ be ~~used~~applied ~~to fund~~against ~~previous~~prior ~~years~~year losses, if any, and may be ~~converted~~used ~~into~~for ~~share~~general ~~capital~~business byexpansion ~~issuing~~and ~~new~~production ~~shares~~or toincrease ~~existing shareholders~~ in ~~proportion to~~registered ~~their shareholders or by increasing the par value of the shares currently outstanding~~capital, ~~provided~~but ~~that~~are ~~the remaining balance of the statutory reserve after such issue is~~ not ~~less~~distributable ~~than~~as ~~25%~~cash ~~of the registered capital~~dividends.

~~Appropriations to~~As ~~the~~of ~~discretionary~~June ~~surplus~~30, ~~reserve~~2025 ~~are~~and December ~~made~~31, at2024, the ~~discretion~~Company ofhad ~~the~~reserve ~~board~~fund of ~~directors. The statutory reserve may be applied against prior year losses~~US$8, ~~if any~~073,968 and ~~may be used for general business expansion and production or increase in registered capital~~US$8,073,968, ~~but are not distributable as cash dividends~~respectively.

AsNOTE of12 ~~March~~— ~~31,~~SHARE ~~2025~~BASED ~~and December 31, 2024, the Company had reserve fund of US$8,073,968 and US$8,073,968, respectively.~~COMPENSATION

FThe Company applied ASC 718 and related interpretations in accounting for measuring the cost of share-19based compensation over the period during which the consultants are required to provide services in exchange for the issued shares. The fair value of above award was estimated at the grant date using the Black-Scholes model for pricing the share compensation expenses.

~~NOTE~~On December 22, 2020, ~~12 —~~the ~~SHARE~~board ~~BASED~~of ~~COMPENSATION~~directors of the Company authorized the issuance of an aggregate of 5,181 shares and warrants to purchase an aggregate of 10,518 shares of common stock to The Crone Law Group, P.C. or its designees for legal services that had been rendered. The five-year warrants are exercisable at one cent per share.

~~The~~5,181 shares of common ~~Company~~stock ~~applied~~underlying ~~ASC~~such ~~718~~warrants ~~and~~were ~~related~~vested ~~interpretations~~on inDecember ~~accounting~~22, ~~for~~2020 ~~measuring~~and ~~the~~6,211 ~~cost~~shares ofwere ~~share-based~~issued ~~compensation~~upon ~~over~~exercise ~~the~~of ~~period during~~these ~~which~~warrants ~~the~~on ~~consultants~~September 21, ~~are~~2022 ~~required~~and warrant to ~~provide~~purchase ~~services~~4,307 inshares ~~exchange~~remained outstanding for ~~the~~The ~~issued~~Crone ~~shares~~Law Group, P.C. or its designees for legal services. The fair value of above award was estimated at the grant date using ~~the~~ Black-Scholes model for pricing the share compensation expenses. The fair value of the Black-Scholes model includes the following assumptions: expected life of 2.5 years, expected dividend rate of 0%, volatility of 43.5% and an average interest rate of 0.11%.

On ~~December~~ 22January 1, ~~2020~~2021, the board of directors of the Company authorized the issuance of an aggregate of 515,~~181~~541 shares and warrants to purchase an ~~aggregate of 10~~31,~~518~~554 shares of common stock to ~~The~~a ~~Crone~~third ~~Law~~party ~~Group,~~service ~~P.C.~~provider ~~or its designees~~ for ~~legal~~consulting services that had been rendered. ~~The~~ These warrants have a five-year ~~warrants~~term and are exercisable at one cent per share.

5The 15,~~181~~ 541 shares of common stock ~~underlying such warrants were vested on December 22, 2020~~ and ~~6,211 shares were issued upon exercise of these~~ warrants ~~on September 21, 2022 and warrant~~ to purchase 431,~~307~~554 shares ~~remained outstanding for The Crone law Group, P.C. or its designees for legal services. The fair value~~ of ~~above~~common ~~award~~stock ~~was~~vested ~~estimated~~on atJanuary ~~the grant date using Black-Scholes model for pricing the share compensation expenses. The fair value of the Black-Scholes model includes the following assumptions: expected life of 2.5 years~~1, ~~expected dividend rate of 0%, volatility of 43~~2021.~~5% and an average interest rate of 0.11%.~~

~~On January~~The 1,fair ~~2021,~~value of the ~~board~~above ofwarrants ~~directors~~was ofestimated at the ~~Company~~grant ~~authorized~~date ~~the~~using ~~issuance~~Black-Scholes ofmodel anfor ~~aggregate~~pricing ofthe ~~15,541~~share ~~shares~~compensation ~~and~~expenses. ~~warrants~~The tofair ~~purchase 31,554~~value ~~shares~~ of ~~common~~the ~~stock~~Black-Scholes tomodel aincludes the ~~third~~following ~~party~~assumptions: ~~service~~expected ~~provider~~life ~~for~~of ~~consulting~~2.5 ~~services~~years, ~~that~~expected ~~had~~dividend ~~been~~rate ~~rendered.~~of ~~These~~0%, ~~warrants~~volatility ~~have~~of ~~a five-year~~51.3% ~~term~~ and ~~are~~an ~~exercisable~~average atinterest ~~one~~rate of ~~cent per share~~0.12%.

~~The~~During the six months ended June 30, 2024, warrants 15for 35,~~541~~861 shares of common stock ~~and~~related ~~warrants~~ to ~~purchase~~above ~~31,554~~mentioned ~~shares~~services ofwere ~~commons~~exercised. ~~stock~~There ~~vested~~were onno ~~January~~warrants 1related to services remaining as of June 30, ~~2021~~2024.

~~The fair~~As ~~value~~ of ~~the~~June ~~above~~30, ~~warrants~~2024, ~~was estimated at~~ the ~~grant~~Company ~~date~~recognized ~~using Black~~relevant share-~~Scholes~~based ~~model for pricing the share~~ compensation ~~expenses. The~~expense ~~fair value~~ of ~~the~~nil ~~Black-Scholes~~for ~~model includes~~ the ~~following~~vested ~~assumptions: expected life of 2.5 years~~shares, ~~expected~~and ~~dividend~~nil ~~rate~~for ofthe 0%warrants, ~~volatility~~ ~~of 51~~respectively.~~3% and an average interest rate of 0.12%.~~

During the year ended December 31, 2024, warrants for 35,861 shares of common stock related to above mentioned services were exercised. There were no warrants related to services remaining as of December 31, 2024.F-18

AsNOTE of13 ~~March~~— WEIGHTED ~~31,~~AVERAGE ~~2025~~NUMBER ~~and~~OF ~~December 31, 2024, the Company recognized relevant share-based compensation expense of nil and nil for the vested shares, and nil and nil for the warrants, respectively.~~SHARES

FIn October 2020, the Company entered into a reverse merger transaction. The Company computes the weighted-20average number of shares of common stock outstanding in accordance with ASC 260 states that in calculating the weighted average shares when a reverse merger takes place in the middle of the year, the number of common shares outstanding from the beginning of that period to the acquisition date shall be computed on the basis of the weighted-average number of shares of common stock of the legal acquiree (accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement. The number of shares of common stock outstanding from the acquisition date to the end of that period shall be the actual number of shares of common stock of the legal acquirer (the accounting acquiree) outstanding during that period.

NOTE 13 14 — ~~WEIGHTED~~RISKS ~~AVERAGE~~AND ~~NUMBER OF SHARES~~UNCERTAINTIES

~~In October~~Credit ~~2020,~~Risk ~~the~~– ~~Company entered into a reverse merger transaction.~~ The ~~Company~~carrying amount ~~computes the weighted-average number~~ of ~~shares~~accounts ofreceivable ~~common stock~~included ~~outstanding~~ in ~~accordance~~the ~~with~~balance ~~ASC~~sheet ~~260~~represents ~~states that in calculating~~ the ~~weighted~~Company’s ~~average~~exposure ~~shares~~to ~~when~~credit arisk ~~reverse merger takes place~~ in ~~the~~relation ~~middle of the year, the number of common shares outstanding from the beginning of that period~~ to ~~the acquisition date shall be~~its ~~computed~~financial onassets. ~~the~~No ~~basis~~other offinancial ~~the~~asset ~~weighted-average~~carries ~~number~~a ofsignificant ~~shares~~exposure ofto ~~common~~credit ~~stock of the legal acquiree (accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement~~risk. The ~~number~~Company ofperforms ~~shares~~ongoing ofcredit ~~common stock outstanding~~evaluations ~~from the acquisition date to the end~~ of ~~that~~each ~~period~~customer’s ~~shall~~financial becondition. ~~the~~The ~~actual~~Company ~~number~~maintains ofallowances ~~shares~~for ofdoubtful ~~common~~accounts ~~stock~~and ofsuch ~~the~~allowances ~~legal~~in ~~acquirer (~~the ~~accounting~~aggregate ~~acquiree)~~have ~~outstanding~~not ~~during~~exceeded ~~that~~management’s ~~period~~estimates.

~~NOTE~~The Company has its cash in bank deposits primarily 14at —state ~~RISKS~~owned ~~AND~~banks ~~UNCERTAINTIES~~located in the PRC. Historically, deposits in PRC banks have been secured due to the state policy of protecting depositors’ interests. The PRC promulgated a Bankruptcy Law in August 2006, effective June 1, 2007, which contains provisions for the implementation of measures for the bankruptcy of PRC banks. The bank deposits with financial institutions in the PRC are insured by the government authority for up to RMB500,000.

~~Credit~~ Interest Rate Risk – The ~~carrying amount of accounts receivable included in the balance sheet represents the~~ Company~~’s exposure~~ tois ~~credit~~exposed ~~risk in relation~~ to ~~its~~the ~~financial~~risk ~~assets.~~arising Nofrom ~~other~~changing ~~financial~~interest ~~asset~~rates, ~~carries~~which amay ~~significant~~affect ~~exposure~~the toability ~~credit~~of ~~risk.~~repayment ~~The~~of ~~Company performs~~existing ~~ongoing~~debts ~~credit~~and ~~evaluations~~ viability of ~~each~~securing ~~customer’s~~future ~~financial~~debt ~~condition.~~instruments ~~The~~within ~~Company maintains allowances for doubtful accounts and such allowances in~~ the ~~aggregate have not exceeded management’s estimates~~PRC.

~~The Company~~Currency ~~has~~Risk ~~its~~- ~~cash~~A inmajority ~~bank~~of ~~deposits~~the Company’s ~~primarily~~revenue atand ~~state~~expense ~~owned~~transactions ~~banks~~are ~~located~~denominated in ~~the~~RMB ~~PRC.~~and ~~Historically,~~a ~~deposits~~significant inportion ~~PRC~~of ~~banks~~the ~~have~~Company’s ~~been~~assets and liabilities ~~secured~~are ~~due~~denominated toin ~~the~~RMB. ~~state~~RMB ~~policy~~is ofnot ~~protecting~~freely ~~depositors’~~convertible ~~interests~~into foreign currencies. ~~The~~In the PRC, ~~promulgated~~certain aforeign ~~Bankruptcy~~exchange ~~Law~~transactions inare ~~August~~required by ~~2006,~~law ~~effective June~~to 1,be ~~2007,~~transacted ~~which~~only ~~contains~~by ~~provisions~~authorized ~~for~~financial ~~the~~institutions ~~implementation~~at ofexchange ~~measures~~rates ~~for~~set by the ~~bankruptcy~~People’s Bank of ~~PRC~~China ~~banks~~(“PBOC”). Remittances ~~The~~in ~~bank~~currencies ~~deposits~~other ~~with~~than ~~financial institutions~~RMB inby the ~~PRC~~Company ~~are~~in ~~insured~~China bymust be processed through the ~~government~~PBOC ~~authority~~or ~~for~~other upChina foreign exchange regulatory bodies which require certain supporting documentation in order to ~~RMB500,000~~affect the remittance.

~~Interest Rate~~Concentrations ~~Risk~~- – The Company issells its ~~exposed~~products primarily to customers in the ~~risk~~PRC ~~arising~~and ~~from~~to ~~changing~~some ~~interest~~extent, ~~rates~~the overseas customers in European countries and East Asia, ~~which~~such ~~may~~as South ~~affect~~Korea and Taiwan. For the ~~ability~~three ofmonths ~~repayment of~~ended ~~existing~~June ~~debts~~30, 2025, five customers accounted for approximately 22.0%, 16.2%, 15.7%, 14.5%, and ~~viability~~12.0%, respectively, of ~~securing~~the ~~future~~Company’s ~~debt~~revenue. ~~instruments~~For ~~within~~the three months ended June 30, 2024, five customers accounted for approximately 21.2%, 19.5%, 16.0%, 14.5% and 12.1%, respectively, of the ~~PRC~~Company’s total revenue.

~~Currency~~For ~~Risk~~the -six Amonths ~~majority~~ended ofJune ~~the~~30, ~~Company’s~~2025, ~~revenue~~five ~~and~~customers ~~expense~~accounted ~~transactions~~for 21.5%, 16.6%, ~~are~~15.8%, ~~denominated~~14.9%, ~~in RMB~~ and a12.2%, ~~significant~~respectively, ~~portion~~ of the Company’s ~~assets and liabilities are denominated in RMB~~revenue. ~~RMB~~For isthe ~~not~~six ~~freely~~months ~~convertible~~ended ~~into~~June ~~foreign~~30, ~~currencies. In the PRC~~2024, ~~certain~~ ~~foreign~~five ~~exchange~~customers ~~transactions are required by law to be transacted only by authorized financial institutions at exchange rates~~accounted ~~set~~for by21.9%, ~~the~~20.0%, ~~People’s~~15.2%, ~~Bank~~13.9% ofand ~~China (“PBOC”)~~11.6%, ~~Remittances~~respectively, inof ~~currencies other than RMB by~~ the Company’s intotal ~~China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance~~revenue.

~~Concentrations -~~ The Company’s ~~sells~~top ~~its~~ten ~~products primarily to~~ customers inaggregately accounted ~~the~~for ~~PRC~~99.6% and to100.0% ~~some~~of ~~extent,~~ the ~~overseas~~total ~~customers~~revenue infor ~~European countries and East Asia such as South Korea and Taiwan. For~~ the three~~-month~~ ~~period~~months ended ~~March~~June 3130, 2025 and 2024, ~~five~~and ~~customers~~approximately ~~accounted for 22~~99.14%, ~~16.9%, 15.8%, 15.1%~~ and 1299.43%, for ~~and~~the ~~five~~six ~~customers~~months ~~accounted~~ended ~~for~~June ~~22.4%~~30, ~~20.4%,~~2025 ~~14.6%, 13.4%~~ and 112026.~~1%, respectively, of the Company’s revenue.~~

~~The Company’s~~As ~~top~~of ~~ten~~June ~~customers~~30, ~~aggregately~~2025, ~~accounted~~four customers accounted for anapproximately ~~aggregate~~29.0%, of20.0%, 9914.75%, and 9812.82% of the total ~~revenue~~accounts ~~for~~receivable ~~the three-month period ended March 31~~balance, ~~2025 and 2024,~~ respectively.

AsThe Company purchases its raw materials through various suppliers. Raw material purchases from these suppliers which individually exceeded 10% of ~~March~~the ~~31,~~Company’s ~~2025,~~total ~~six~~raw ~~customers~~material purchases, accounted for 23an aggregate of approximately 50.51%, 17(four suppliers) and 27.61% (two suppliers) for the three months ended June 30, ~~14.4%~~2025 and 2024, ~~14.2%~~respectively, 12and approximately 49.16% (four suppliers) and 1140.23% of(three suppliers) for the ~~total~~six ~~accounts~~months ~~receivable~~ended ~~balance,~~June 30, 2025 and 2024, respectively.

~~The Company~~NOTE ~~purchases~~15 ~~its~~— ~~raw~~COMMITMENTS ~~materials~~AND through various suppliers. Raw material purchases from these suppliers which individually exceeded 10% of the Company’s total raw material purchases, accounted for an aggregate of approximately 48.2% (four suppliers) and 42.4% (five suppliers) for the three-month period ended March 31, 2025 and 2024, respectively.CONTINGENCIES

~~NOTE 15~~i) —Legal ~~COMMITMENTS AND CONTINGENCIES~~Proceedings

i)We may from time to time be subject to various ~~Legal~~legal ~~Proceedings~~or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, can result in substantial cost and the diversion of our resources, including our management’s time and attention.

~~We may~~As ~~from~~of ~~time~~the todate ~~time~~of bethis ~~subject~~Report, towe ~~various~~are ~~legal~~not oraware of ~~administrative~~any ~~claims~~material, ~~and~~active, ~~proceedings~~pending ~~arising~~or inthreatened ~~the~~to ~~ordinary~~which ~~course~~the ofCompany ~~business. Litigation~~ or any ~~other~~of ~~legal~~its orsubsidiaries ~~administrative~~is ~~proceeding,~~a ~~regardless of the outcome~~party, ~~can~~or ~~result~~to inwhich ~~substantial~~any ~~cost~~of ~~and~~their ~~the diversion~~property ofis ~~our resources, including our management’s time and attention~~subject.

~~As of~~ii) ~~the~~Capital ~~date~~Expenditure ~~of this Report, we are not aware of any material, active, pending or threatened to which the Company or any of its subsidiaries is a party, or to which any of their property is subject.~~Commitment

~~ii)~~As of June 30, 2025, the Company had commitment ~~Capital~~of ~~Expenditure~~RMB5.0 ~~Commitment~~million (equivalent to $0.7 million) for construction in progress.

~~As of March 31, 2025, the Company had commitment of RMB5.0 million (equivalent to $0.7 million) for construction in progress.~~F-19

~~F-21~~NOTE 16 — SEGMENT REPORTING

~~NOTE~~The Company’s chief operating decision maker 16has —been ~~SEGMENT~~identified ~~REPORTING~~as the Chief Executive Officer (“CEO”), who reviews financial information of operating segments based on U.S. GAAP amounts when making decisions about allocating resources and assessing performance of the Company.

The Company’s ~~chief~~determined ~~operating~~that ~~decision~~it ~~maker~~operated ~~has~~in ~~been~~one ~~identified as the Chief Executive Officer (“CEO”), who reviews financial information of~~ operating ~~segments~~segment ~~based on U.S. GAAP amounts when making decisions about allocating resources and assessing performance~~ of touch ~~the~~screen ~~Company~~business.

The Company ~~determined~~primarily ~~that~~operates itin ~~operated~~People’s Republic inof ~~one~~China ~~operating~~(“PRC”). ~~segment~~and substantially all of ~~touch~~the ~~screen~~Company’s ~~business~~long-lived assets are located in the PRC.

~~The Company primarily operates in People’s Republic of China (“PRC”~~1). ~~and~~The ~~substantially all of the~~ Company’s ~~long-lived assets~~geographical ~~are~~revenue ~~located~~information inis ~~the~~set ~~PRC.~~forth below:

1) The Company’s geographical revenue information is set forth below:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2025		2024			2025		2024
Sales in PRC	$	8,414,927	$	7,867,625		$	18,715,995	$	17,242,097
Sales in Overseas
-Republic of China (ROC, or Taiwan)		2,184,676		2,411,305			4,852,592		5,606,466
-South Korea		1,800,926		1,956,141			4,121,519		4,128,616
-Others		18,927		(496	)		18,927		134,655
Sub-total		4,004,528		4,366,950			8,993,038		9,869,737
Total Revenue	$	12,419,455	$	12,234,575		$	27,709,033	$	27,111,834

	Three-Month Period Ended March 31
	2025		2024
	(Unaudited)
Sales in PRC	$	10,301,069	$	9,374,473
Sales in Overseas
-Republic of China (ROC, or Taiwan)		2,667,917		3,195,161
-South Korea		2,320,592		2,172,475
-Others		-		135,150
Sub-total		4,988,509		5,502,786
Total revenues	$	15,289,578	$	14,877,259

2)	Segment information is set forth below:

2) Segment information is set forth below:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues	$	12,419,455		$	12,234,575		$	27,709,033		$	27,111,834
Less:
Cost of revenues		8,307,944			7,373,757			17,955,891			18,913,058
Allowance for credit losses		150			-			45,889			-
Reversal of provision of obsolete inventory		(65,976	)		-			(91,252	)		-
Staff cost		353,556			344,695			705,193			672,654
Gain on changes in fair value of common stock purchase warrants liability.		-			(37,751	)		-			(45,572	)
Amortization of discounts and issue cost of the notes		-			-			-			5,715
Depreciation expense		2,486			2,482			4,957			4,798
Lease expense		156,869			146,643			308,244			294,372
Interest expense		-			-			-			1,169,974
Income tax expense		876,722			1,099,331			2,347,828			1,761,179
Other segment items*		545,876			603,723			1,627,733			1,075,092

Segment net income		2,241,828			2,701,694			4,804,550			3,260,564

Consolidated net income	$	2,241,828		$	2,701,694		$	4,804,550		$	3,260,564

Consolidated total assets	$	137,024,190		$	125,910,057		$	137,024,190		$	125,910,057

	Three-Month Period Ended March 31
	2025			2024
	(Unaudited)
Revenues	$	15,289,578		$	14,877,259
Less:
Cost of revenues		9,647,947			11,539,301
Allowance for credit losses		45,739			-
Reversal of provision of obsolete inventory		(25,276	)		-
Staff cost		351,637			327,959
(Gain) on changes in fair value of common stock purchase warrants liability.		-			(7,821	)
Amortization of discounts and issue cost of the notes		-			5,715
Depreciation expense		2,471			2,316
Lease expense		151,375			147,729
Interest expense		-			1,169,974
Income tax expense		1,471,106			661,848
Other segment items*		1,081,857			471,368
Segment net income		2,562,722			558,870
Consolidated net income	$	2,562,722		$	558,870
Consolidated total assets	$	133,677,892		$	123,147,198

NOTE 17 — SUBSEQUENT EVENTS

*The ~~Other~~Company ~~segment~~has ~~items~~evaluated ~~include~~subsequent ~~remaining~~events ~~selling~~and transactions ~~expense,~~that ~~general~~occurred ~~and~~after ~~administration~~the ~~expenses,~~balance ~~research~~sheet &date ~~development,~~through the date the consolidated financial statements were issued and ~~interest~~no ~~income~~subsequent events occurred that require accrual or disclosure.

~~NOTE 17 — SUBSEQUENT EVENTS~~F-20

OnItem ~~April 11, 2025, Sichuan Vtouch entered into a supplemental construction contract with Sichuan Chunqiu Development & Construction Group Co~~2. ~~Ltd. for a total consideration of~~ ~~RMB 4,633,118 (equivalent to $0.6 million) for completion of the Company~~Management’s ~~facility~~Discussion ~~construction project on the capacitive touch screen~~ and ~~touch~~Analysis ~~machine R&D. Pursuant to the contract, the Company is required to prepay 50%~~ of ~~the~~Financial ~~contract~~Condition ~~within three months~~ and ~~the~~Results ~~remaining amount payable upon the completion~~ of ~~the project settlement. As of the date of this Quarterly Report, the Company has prepaid the 50% of the contract value.~~Operations

FThe discussion should be read in conjunction with the Company’s consolidated financial statements and the notes presented herein. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-22looking statements that involve risks and uncertainties. Actual results could differ significantly from those expressed, implied or anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the Securities and Exchange Commission. See “Cautionary Note Regarding Forward Looking Statement.”

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ Overview

The ~~discussion should be read in conjunction with the~~ Company’s ~~consolidated~~is ~~financial~~a ~~statements~~Nevada ~~and the notes presented herein. In addition to historical information, the~~holding ~~following~~company ~~Management’s~~with ~~Discussion~~no ~~and~~material ~~Analysis~~operations of ~~Financial~~its ~~Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties~~own. ~~Actual~~We ~~results~~conduct ~~could~~substantially ~~differ~~all ~~significantly~~of ~~from~~our ~~those~~operations ~~expressed,~~through ~~implied~~our orsubsidiary ~~anticipated~~ in ~~these~~mainland China, ~~forward-looking~~which ~~statements~~we ascontrol athrough ~~result~~BVI ofWetouch. ~~certain~~See ~~factors~~“Item ~~discussed herein and any other periodic reports filed and to be filed with the Securities and Exchange Commission~~1. ~~For~~ ~~more~~Business ~~information~~– ~~regarding~~Corporate ~~the~~History ~~risks~~ and ~~uncertainties of our business, See “Risk Factors~~Structure”, ~~“Cautionary~~for ~~Note~~more ~~Regarding Forward Looking Statement~~details.”

~~Overview~~Because our operations are primarily in China, we are subject to complex and evolving PRC laws and regulations. These include restrictions on capital flows, dividend payments, currency conversion, cybersecurity and data privacy, and governmental discretion over overseas securities offerings. These risks could materially affect our ability to transfer funds, conduct offerings, or continue operations in their current form. See “Item 1A. Risk Factors—Risks Related to Doing Business in China.”

~~The~~ As of June 30, 2025, the Company has iscontributed aRMB ~~Nevada~~348.0 million (US$47.7 million) to its PRC subsidiary through intermediate holding ~~company~~companies, ~~with~~which nowere ~~material~~accounted for ~~operations~~as oflong-term investments. These funds have been used by our PRC subsidiary in its ~~own~~operations. WeTo ~~conduct~~date, ~~substantially~~no ~~all~~dividends ofor other distributions have been made by our ~~operations~~PRC ~~through~~subsidiary to the Company. We may rely on future distributions from our PRC subsidiary into ~~mainland~~fund ~~China~~our holding company obligations, ~~which~~subject weto ~~control~~PRC ~~through~~law ~~BVI~~and ~~Wetouch~~restrictions. ~~See~~For more details, see “Item 11A. Risk Factors—Risks Related to Doing Business in –China—As ~~Corporate~~a ~~History~~holding company, we conduct our operations primarily through our PRC subsidiary and ~~Structure”~~face risks and uncertainties associated ~~for~~with ~~more~~this ~~details~~structure.”

~~Because our~~Under ~~operations~~current ~~are~~PRC ~~primarily~~law, individend payments ~~China,~~by weour PRC subsidiary are ~~subject~~limited to ~~complex~~accumulated ~~and~~profits ~~evolving~~determined ~~PRC~~in ~~laws~~accordance ~~and~~with ~~regulations.~~PRC ~~These~~accounting ~~include~~standards ~~restrictions~~and onare subject ~~capital~~to ~~flows,~~statutory ~~dividend~~reserve ~~payments,~~requirements. ~~currency~~Dividends ~~conversion,~~to ~~cybersecurity~~the ~~and~~Company ~~data~~are ~~privacy,~~also ~~and~~subject ~~governmental~~to ~~discretion~~withholding ~~over~~tax, ~~overseas~~generally ~~securities offerings.~~10%, ~~These~~but ~~risks~~reduced ~~could~~to ~~materially~~5% ~~affect~~if ~~our~~treaty conditions ~~ability~~are tomet. ~~transfer~~There ~~funds,~~is ~~conduct~~no ~~offerings,~~assurance orthat ~~continue~~the ~~operations~~reduced inrate ~~their~~will ~~current form~~apply. ~~See~~For more details, see “Item 1A. Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system, including the enforcement of laws and changes in laws and regulations, could adversely affect us and limit the legal protections available.”

~~As of~~We ~~March~~currently ~~31,~~do ~~2025,~~not ~~the~~have ~~Company has contributed RMB 348.0 million (US$47.7 million) to its PRC subsidiary through intermediate holding~~cash ~~companies,~~management ~~which~~policies ~~were~~dictating ~~accounted~~how ~~for as long-term investments. These~~ funds ~~have~~are ~~been~~transferred ~~used~~between bythe ~~our~~Company ~~PRC~~and ~~subsidiary in~~ its ~~operations~~subsidiaries. ~~To date,~~Most noof ~~dividends or other distributions have been made by~~ our ~~PRC~~cash ~~subsidiary~~is tomaintained ~~the~~in ~~Company. We may rely on future distributions from~~Renminbi ~~our~~in ~~PRC~~mainland ~~subsidiary~~China toand ~~fund~~may ~~our~~be ~~holding company obligations,~~ subject to PRC ~~law~~restrictions ~~and~~on ~~restrictions~~outbound transfers. For ~~more~~ details, see “Item 1A. Risk Factors~~—Risks~~ - Risks Related to Doing Business in China~~—As~~ a- ~~holding~~Governmental ~~company,~~control weof ~~conduct~~currency ~~our~~conversion ~~operations~~may ~~primarily~~limit ~~through~~ our ~~PRC~~ability ~~subsidiary~~to ~~and~~utilize ~~face~~our ~~risks~~revenues effectively and ~~uncertainties~~affect ~~associated~~the ~~with~~value ~~this~~of ~~structure~~your investment.”

~~Under~~Through ~~current~~our ~~PRC~~wholly ~~law~~owned subsidiaries, ~~dividend~~BVI ~~payments~~Wetouch, byHK ~~our~~Wetouch, ~~PRC~~and ~~subsidiary~~Sichuan ~~are~~Vtouch, ~~limited~~we toare ~~accumulated~~engaged ~~profits determined~~ in ~~accordance~~the ~~with~~research, ~~PRC~~development, ~~accounting~~manufacturing, ~~standards~~sales and ~~are~~servicing ~~subject~~of medium- to ~~statutory~~large-sized ~~reserve~~projected ~~requirements~~capacitive touchscreens. ~~Dividends~~We ~~to the Company~~ are ~~also~~specialized ~~subject~~in tolarge-format ~~withholding tax~~touchscreens, ~~generally~~which ~~10%,~~are ~~but~~developed ~~reduced~~and todesigned 5%for ifa ~~treaty~~wide ~~conditions~~variety ~~are~~of ~~met.~~markets ~~There~~and isused noin ~~assurance that~~ the ~~reduced~~financial ~~rate~~terminals, ~~will~~automotive, ~~apply.~~POS, ~~For~~gaming, ~~more details~~lottery, ~~see “Item~~medical, ~~1A.~~HMI, ~~Risk~~and ~~Factors—Risks~~other ~~Related~~specialized toindustries. ~~Doing~~Our ~~Business~~product inportfolio ~~China—Uncertainties~~comprises ~~with~~medium- ~~respect~~ to ~~the~~large-sized ~~PRC~~projected ~~legal~~capacitive ~~system,~~touchscreens ~~including the~~ranging ~~enforcement~~from of7.0 ~~laws~~inch ~~and~~to ~~changes~~42 ininch ~~laws and regulations, could adversely affect us and limit the legal protections available~~screens.”

We generate revenues through ~~currently~~sales doof ~~not~~our ~~have~~various ~~cash~~touchscreen ~~management~~products. ~~policies~~We ~~dictating~~sell ~~how~~our ~~funds~~touchscreen ~~are~~products ~~transferred~~both ~~between~~domestically ~~the~~in ~~Company~~China and ~~its~~internationally, ~~subsidiaries.~~covering ~~Most of~~major ~~our~~areas ~~cash~~in isMainland ~~maintained~~China, inincluding ~~Renminbi~~but innot ~~mainland~~limited ~~China~~to the eastern, southern, northern and ~~may~~southwest beregions ~~subject~~of toMainland ~~PRC~~China, ~~restrictions~~Taiwan, South onKorea, ~~outbound~~and ~~transfers~~Germany. We believe that we have established a strong and diversified client base. For ~~details~~the three months ended June 30, ~~see~~2025 ~~“Item 1A~~and 2024, our domestic sales accounted for approximately 67.7% ~~Risk~~and ~~Factors~~64.8%, -respectively, ~~Risks~~of ~~Related~~our revenues, toand ~~Doing~~our ~~Business~~international insales ~~China~~accounted -for ~~Governmental~~approximately ~~control~~32.3% and 35.2%, respectively, of ~~currency~~our ~~conversion~~revenues. ~~may~~For ~~limit~~the six months ended June 30, 2025 and 2024, our ~~ability~~domestic tosales ~~utilize~~accounted for approximately 66.7% and 63.4%, respectively, of our revenues, ~~effectively~~ and ~~affect~~our ~~the~~international ~~value~~sales accounted for approximately 33.3% and 36.6%, respectively, of ~~your~~our ~~investment~~revenues.”

~~Through~~ Since our incorporation, ~~wholly~~we ~~owned~~have ~~subsidiaries,~~effected ~~BVI~~two ~~Wetouch,~~reverse HKstock ~~Wetouch,~~splits ~~and~~of ~~Sichuan~~our ~~Vtouch~~common stock, weincluding ~~are~~a ~~engaged~~1-for-70 inreverse ~~the~~split ~~research,~~in ~~development,~~2020 ~~manufacturing, sales~~ and ~~servicing~~a ~~of medium~~1- ~~to large~~for-~~sized~~20 reverse ~~projected~~split ~~capacitive touchscreens. We are specialized~~ in ~~large-format touchscreens~~2023, ~~which are~~and ~~developed~~all share and ~~designed~~per ~~for~~share ainformation ~~wide~~in ~~variety~~this ofQuarterly ~~markets~~Report ~~and~~has ~~used~~been inretroactively ~~the~~adjusted ~~financial~~to ~~terminals,~~reflect ~~automotive,~~these actions. ~~POS,~~For ~~gaming,~~more ~~lottery~~details, ~~medical, HMI,~~see ~~and~~“Item ~~other specialized industries~~1. ~~Our~~Business ~~product~~- ~~portfolio~~Corporate ~~comprises~~History ~~medium-~~and toStructure ~~large~~-~~sized~~ ~~projected~~Reverse ~~capacitive~~Stock ~~touchscreens~~Splits” ~~ranging~~of ~~from~~the ~~7.0~~2024 ~~inch~~Form ~~to 42 inch screens~~10-K.

WeConstruction ~~generate revenues through sales~~ of our ~~various~~new ~~touchscreen products.~~facility

We ~~sell~~ ~~our~~have ~~touchscreen~~been ~~products~~actively ~~both~~engaged ~~domestically~~ in ~~China~~the ~~and~~construction of ~~internationally,~~our ~~covering~~new ~~major~~production ~~areas~~facilities inand ~~Mainland~~office ~~China,~~buildings ~~including~~in ~~but~~Chengdu ~~not limited~~Medicine toCity ~~the~~(Technology ~~eastern~~Park), ~~southern~~Wenjiang District, ~~northern~~Chengdu, ~~and~~Sichuan Province, ~~southwest~~People’s ~~regions~~Republic of ~~Mainland~~ China, ~~Taiwan,~~since ~~South~~the ~~Korea,~~summer ~~and~~of ~~Germany~~2023. WeThe ~~believe~~Company ~~that we~~has ~~have~~planned ~~established~~to aincrease ~~strong and diversified client base. For~~ the ~~three~~scope ~~months~~of ~~ended~~facility ~~March 31, 2025 and 2024, our domestic sales accounted~~construction ~~for~~by ~~approximately~~adding ~~67.3%~~a ~~and~~touch ~~63.1%,~~machine ~~respectively,~~construction ~~of our revenues~~area, ~~and~~to ~~our~~be ~~international~~completed ~~sales~~by ~~accounted~~the ~~for~~end ~~approximately 32.7% and 36.9%, respectively,~~ of ~~our revenues~~2025.

~~Since our~~As ~~incorporation~~of the date of this Quarterly Report, we ~~have~~estimate to ~~effected~~finish ~~two~~the ~~reverse~~building ~~stock~~construction ~~splits~~by ofthe ~~our~~end ~~common~~of ~~stock,~~2025 and ~~including~~commence aproduction ~~1-for-70~~in ~~reverse~~the ~~split~~second inquarter ~~2020~~of ~~and~~2026. aIn ~~1-for-20~~consideration of ~~reverse~~the ~~split~~capital inrequirements ~~2023,~~for ~~and~~the ~~all~~new ~~share~~facility ~~and~~construction, ~~per~~we ~~share~~plan ~~information~~to infund ~~this~~the ~~Quarterly~~project ~~Report~~primarily ~~has~~with ~~been~~our ~~retroactively~~existing ~~adjusted~~cash toon ~~reflect~~hand, ~~these~~which ~~actions~~totaled approximately $106.4 ~~For~~million ~~more~~as ~~details~~of June 30, ~~see~~2025, ~~“Item~~and 1.cash ~~Business~~flows -generated ~~Corporate~~from ~~History~~operations, and ~~Structure~~we -may ~~Reverse~~seek ~~Stock~~additional ~~Splits” of~~financing if needed to support the ~~2024~~timely ~~Form~~completion ~~10-K~~of the project.

~~Construction of~~Highlights ~~our~~for ~~new~~the ~~facility~~three months ended June 30, 2025 include:

~~We have~~● ~~been~~Revenues ~~actively~~were ~~engaged~~$12.4 ~~in the construction of our new production facilities and office buildings in Chengdu Medicine City (Technology Park)~~million, ~~Wenjiang~~an ~~District,~~increase ~~Chengdu, Sichuan Province, Peoples’s Republic~~ of ~~China~~1.6% ~~since~~from ~~the~~$ ~~summer of 2023~~12.2 ~~The~~million ~~Company~~in ~~has planned to increase~~ the ~~scope~~second ofquarter ~~facility construction by adding a touch machine construction area, to be completed by the end~~ of ~~2025.~~2024

As● ofGross ~~the~~profit ~~date~~was of$4.1 ~~this Quarterly Report~~million, wea ~~estimate to~~decrease ~~finish the building construction by the end~~ of ~~2025 and commence production in the second quarter of 2026~~14.5% Infrom ~~consideration of the capital requirements for the new facility construction, we plan to fund the project primarily with our existing cash on hand, which totaled approximately~~ $~~106.~~ 4.9 million asin ~~of March 31, 2025, and cash flows generated from operations, and we may seek additional financing if needed to support~~ the ~~timely~~second ~~completion~~quarter of ~~the project.~~2024

~~Highlights for~~● ~~the~~Gross ~~three-month~~profit ~~period~~margin ~~ended~~was ~~March~~33.1% ~~31,~~as ~~2025~~compared ~~include:~~to 39.7% in the second quarter of 2024

● ~~Revenues~~Net ~~were~~income was $152.32 million, ana ~~increase~~decrease of 218.75% ~~compared~~from to $14 2.97 million in the ~~first~~second quarter of 2024

● ~~Gross~~Total ~~profit~~volume shipped was ~~$5.6~~615,742 ~~million~~units, an increase of 695.71% ~~compared~~from to585,705 ~~$3.3~~units ~~million~~ in the ~~first~~second quarter of 2024

●Results ~~Gross profit margin was 36.9%, compared to 22.4% in the first quarter~~ of ~~2024~~Operations

●The ~~Net~~following ~~income~~table ~~was~~sets ~~$2.5 million~~forth, anfor ~~increase of 316.7% compared to $0.6 million in~~ the ~~first~~periods indicated, ~~quarter~~statements of ~~2024~~income data:

● Total volume shipped was 762,545 units, an increase of 11.9% compared to 681,370 units in the first quarter of 2024

	For the Three Months Ended June 30,						Change			For the Six Months Ended June 30,						Change
(in US Dollar millions, except percentage)	2025			2024			%			2025			2024			%
Revenues	$	12.4		$	12.2			1.6	%	$	27.7		$	27.1			2.2	%
Cost of revenues		(8.3	)		(7.4	)		12.2	%		(18.0	)		(18.9	)		(4.8	)%
Gross profit		4.1			4.8			(14.5	)%		9.7			8.2			18.3	%
Total operating expenses		(1.0	)		(1.1	)		(9.1	)%		(2.7	)		(2.2	)		22.7	%
Operating income		3.1			3.7			(16.2	)%		7.0			6.0			16.7	%
Total Other income (expenses)		0.0			0.0			N/A			0.0			(1.0	)		(100.0	)%
Interest expense		0.0			0.0			N/A			0.0			(1.2	)		(100.0	)%
Income before income taxes		3.1			3.8			(18.4	)%		7.1			5.0			42.0	%
Income tax expense		(0.9	)		(1.1	)		(18.2	)%		(2.3	)		(1.7	)		35.3	%
Net income	$	2.2		$	2.7			(18.5	)%	$	4.8		$	3.3			45.5	%

~~Results~~Three Months Ended June 30, 2025 Compared to ofThree ~~Operations~~Months Ended June 30, 2024

~~The following table sets forth, for the periods indicated, statements of income data:~~Revenues

(in US Dollar millions, except percentage)	Three-Month Period Ended March 31,						Change
	2025			2024			%
Revenues	$	15.3		$	14.9			2.7	%
Cost of revenues		(9.7	)		(11.6	)		(16.4	)%
Gross profit		5.6			3.3			69.7	%
Total operating expenses		(1.6	)		(1.0	)		(60.0	)%
Operating income		4.0			2.3			73.9	%
Total other income (expenses)		0.0			(1.1	)		(100.0	)%
Interest expense		0.0			(1.2	)		(100.0	)%
Income before income taxes		4.0			1.2			233.3	%
Income tax expense		(1.5	)		(0.6	)		150.0	%
Net income	$	2.5		$	0.6			316.7	%

We generated revenue of $12.4 million for the three months ended June 30, 2025, an increase of $0.2 million, or 1.6%, compared to $12.2 million in the same period of last year. This was due to an increase of 5.1% in sales volume, 0.2% positive impact from exchange rate due to appreciation of RMB against US dollars, partially offset by a decrease of 3.6% in the average selling price of our products, compared with that of the same period of last year.

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

	For the Three Months Ended June 30,
	2025					2024					Change			Change
	Amount		%			Amount		%			Amount			%
	(in US Dollar millions except percentage)
Revenue from sales to customers in Mainland China	$	8.4		67.7	%	$	7.9		64.8	%	$	0.5			6.3	%
Revenue from sales to customers overseas		4.0		32.3	%		4.3		35.2	%		(0.3	)		(7.0	)%
Total Revenues	$	12.4		100	%	$	12.2		100	%	$	0.2			1.6	%

Revenues

	For the Three Months Ended June 30,
	2025					2024					Change			Change
	Unit		%			Unit		%			Unit			%
	(in UNIT, except percentage)
Units sold to customers in Mainland China		411,353		66.8	%		371,130		63.4	%		40,223			10.8	%
Units sold to customers overseas		204,389		33.2	%		214,575		36.6	%		(10,186	)		(4.7	)%
Total Units Sold		615,742		100	%		585,705		100	%		30,037			5.1	%

~~We generated~~(i) ~~revenue~~PRC of $15.3 million for the three months ended March 31, 2025, an increase of $0.4 million, or 2.7%, compared to $14.9 million in the same period of last year. This was due to an increase of 11.9% in sales volume, and partially offset by a decrease of 6.9% in the average selling price of our products , and 1.2% negative impact from exchange rate due to depreciation of RMB against US dollars, compared with that of the same period of last year.market

	For the Three-Month Ended March 31,
	2025					2024					Change			Change
	Amount		%			Amount		%			Amount			%
	(in US Dollar millions except percentage)
Revenue from sales to customers in Mainland China	$	10.3		67.3	%	$	9.4		63.1	%	$	0.9			9.6	%
Revenue from sales to customers overseas		5.0		32.7	%		5.5		36.9	%		(0.5	)		(9.1	)%
Total Revenue	$	15.3		100	%	$	14.9		100	%	$	0.4			2.7	%

For the three months ended June 30, 2025, revenue from domestic market increased by $0.5 million or 6.3% as a combined result of: (i) an increase of 10.8% in sales volume due to higher sales volume of automotive touchscreens, industrial control computer touchscreens, and multi-functional printer touchscreens, (ii) 0.2% positive impact from exchange rate due to appreciation of RMB against US dollars, partially offset by a decrease of 3.6% in the average RMB selling price of our products, compared with those of the same period of last year.

	For the Three-Month Ended March 31,
	2025					2024					Change		Change
	Unit		%			Unit		%			Unit		%
		(in UNIT, except percentage)
Units sold to customers in Mainland China		508,650		66.7	%		432,050		63.4	%		76,600		17.7	%
Units sold to customers overseas		253,895		33.3	%		249,320		36.6	%		4,575		1.8	%
Total Units Sold		762,545		100	%		681,370		100	%		81,175		11.9	%

As for the RMB selling price, the decrease of 3.6% was mainly due to due to the lower demand of higher selling priced products of touchscreen machines in the PRC domestic market, including the decreased average RMB selling price of 12.7% in medical touchscreens and 2.0% in industrial control computer touchscreens and 1.3% in automotive touchscreens during the three months ended June 30, 2025.

~~(i)~~The Company has taken proactive efforts to market ~~PRC~~new ~~Domestic~~models ~~Market~~and efforts to obtain new customers and penetrate into new regions, our sales increased by 8.6% in South China, and 7.3% in East China, and 5.3% in Southwest China during the three months ended June 30, 2025.

For the three months ended March 31, 2025, revenue from the PRC domestic market increased by $0.9 million, or 9.6%, as a combined result of: (i) an increase of 17.7% in sales volume, partially offset by (ii) a decrease of 5.3% in the average RMB selling price of our products, and partially offset by 1.2% negative impact from exchange rate due to depreciation of RMB against US dollars, compared with that of the same period of last year.4

4(ii) Overseas market

~~As for~~For the ~~RMB~~three ~~selling~~months ended June ~~price~~30, 2025, revenues from the ~~decrease~~overseas ofmarket 5were $4.3%0 ~~was~~million ~~mainly~~as ~~due~~compared to $4.3 million of the ~~lower~~same ~~demand~~period of ~~higher~~2024, ~~selling~~representing ~~priced~~a ~~products~~decrease ofby ~~touchscreen~~$0.3 ~~machines~~million, or 7.0%, mainly indue ~~the~~to ~~PRC~~i) ~~domestic~~a ~~market,~~decrease ~~including~~of ~~the~~4.7% ~~decreased~~in ~~average~~sales ~~RMB~~volume ~~selling~~including ~~price~~decreased sales of 258.56% in ~~medical~~gaming touchscreens and 115.24% in automotive touchscreens, ii) a decrease of 4.1% in average selling price in RMB due to the lower demand on touchscreen machines in medical touchscreens, industrial control computer touchscreens, ~~during~~and automotive touchscreens, partially offset by iii) the ~~three-month~~0.2% ~~period~~positive impact ~~ended~~from ~~March~~exchange 31rate due to appreciation of RMB against US dollars, ~~2025~~compared with those of the same period of last year.

~~Due to~~The ~~our proactive efforts to market new models and efforts to obtain new customers and penetrate into new regions, our sales increased~~following bytable ~~19.7%~~summarizes inthe ~~South~~breakdown ~~China,~~of ~~and~~revenues ~~18.4% in East China, partially offset~~ by acategories ~~decrease of 1.5%~~ in US ~~Southwest China during the three months ended March 31, 2025.~~dollars:

(ii) Overseas Market

	Revenues For the Three Months Ended June 30,
	2025					2024					Change			Change
	Amount		%			Amount		%			Amount			Margin%
	(in US Dollars, except percentage)
Product categories by end applications
Automotive Touchscreens	$	3,122,908		25.1	%	$	3,391,048		27.7	%	$	(268,140	)		(7.9	)%
Industrial Control Computer Touchscreens		2,729,429		22.0	%		2,367,638		19.3	%		361,791			15.3	%
POS Touchscreens		1,950,702		15.7	%		1,768,458		14.5	%		182,244			10.3	%
Gaming Touchscreens		1,800,926		14.5	%		1,956,141		16.0	%		(155,215	)		(7.9	)%
Medical Touchscreens		1,665,089		13.4	%		1,728,928		14.1	%		(63,839	)		(3.7	)%
Multi-Functional Printer Touchscreens		1,150,401		9.3	%		1,022,362		8.4	%		128,039			12.5	%
Total Revenues	$	12,419,455		100.0	%	$	12,234,575		100.0	%	$	184,880			1.6	%

~~For the~~The ~~three-month~~Company ~~period ended March 31, 2025, revenues from the overseas market were $5.0 million as compared to $5.5 million of the same~~continued ~~period of 2024, representing a decrease by $0.6 million, or 10.9%, mainly due~~ to anshift ~~decrease~~production ofmix ~~9.9%~~from intraditional ~~average~~lower-end ~~selling~~products ~~price in RMB due~~ to ~~the~~high-end ~~lower~~products ~~demand~~such onas ~~touchscreen~~POS ~~machines in medical~~ touchscreens, and industrial control computer touchscreens, ~~and~~primarily ~~automotive~~due ~~touchscreens, and~~to ~~1.2%~~(i) ~~negative~~greater ~~impact~~growth ~~from~~potential ~~exchange~~of ~~rate~~computer ~~due~~screen tomodels ~~depreciation~~in ofChina ~~RMB~~and ~~against~~overseas ~~US dollars~~market, ~~partially~~and ~~offset~~(ii) by the ~~increase of 1.8% in~~stronger ~~sales~~demand ~~volume~~on ~~due~~higher-end totouch ~~increased~~screens ~~sales~~made inwith ~~industrial~~better ~~control~~materials ~~computer touch screens~~ and ~~gaming~~better ~~touchscreens,~~quality.

~~The following~~Gross ~~table~~Profit ~~summarizes~~and ~~the~~Gross ~~breakdown~~Profit ~~of revenues by categories in US dollars:~~Margin

	Revenues For the Three-Month Ended March 31,
	For the Three Months Ended June 30,						Change
	2025						2024						Change			Change
(in millions, except percentage)	2025			2024			Amount			%
	Amount			%			Amount			%			Amount			Margin%
Gross Profit	$	4.1		$	4.8		$	(0.7	)		(14.5	)%
		(in US Dollars, except percentage)
Gross Profit Margin		33.1	%		39.7	%					(6.6	)%
Product categories by end applications
Automotive Touchscreens	$	3,960,497			25.9	%	$	4,185,270			28.1	%	$	(224,773	)		(5.4	)%
Industrial Control Computer Touchscreens		3,235,073			21.2	%		2,847,660			19.2	%		387,413			13.6	%
POS Touchscreens		2,411,031			15.8	%		2,114,099			14.2	%		296,932			14.0	%
Gaming Touchscreens		2,320,592			15.1	%		2,172,475			14.6	%		148,117			6.8	%
Medical Touchscreens		1,949,656			12.8	%		2,414,961			16.2	%		(465,305	)		(19.3	)%
Multi-Functional Printer Touchscreens		1,412,727			9.2	%		1,142,794			7.7	%		269,933			23.6	%
Total Revenue	$	15,289,578			100.0	%	$	14,877,259			100.0	%	$	412,319			2.7	%

*Gross ~~Others~~profit ~~include~~was ~~applications~~$4.1 million in ~~self-service~~the ~~kiosks~~second quarter ended June 30, ~~ticket~~2025, ~~vending~~compared ~~machines~~to $4.8 million in the same period of 2024. Our gross profit margin decreased to 33.1% for the second quarter ended June 30, 2025, as compared to 39.7% for the same period of 2024, primarily due to the increase of cost of goods sold by 12.8% resulting from the increase of 13.5% in costs of raw materials, and ~~financial~~3.3% ~~terminals~~in labor cost, partially offset by the increased sales of 1.6% during the three months ended June 30, 2025.

The Company continued to shift production mix from traditional lower-end products to high-end products such as industrial control computer touchscreens POS touchscreens, gaming touchscreens, and multi-functional printer touchscreens, primarily due to (i) greater growth potential of computer screen models in China and overseas market, and (ii) the stronger demand on higher-end touch screens made with better materials and better quality. 5

~~Gross Profit~~Selling ~~and Gross Profit Margin~~Expenses

	Three-Month Period Ended March 31,						Change
	For the Three Months Ended June 30,						Change
(in millions, except percentage)	2025			2024			Amount			%
Gross Profit	$	5.6		$	3.3		$	2.3			69.7	%
Selling Expenses	$	0.1		$	0.3		$	(0.2	)		(66.7	)%
Gross Profit Margin		36.9	%		22.4	%					14.5	%
as a percentage of revenues		0.8	%		2.4	%					(1.6	)%

5Selling expenses were $0.1 million for the three months ended June 30, 2025, compared to $0.3 million in the same period in 2024, representing a decrease of $0.2 million, or 66.7%. The decrease was primarily due to the decrease of $0.2 million traveling expenses due to using online communication to market our products during the three months ended June 30,2025.

~~Gross profit~~General was $5.6 million in the first quarter ended March 31, 2025, compared to $3.3 million in the same period of 2024. Our gross profit margin increased to 36.9% for the first quarter ended March 31, 2025, as compared to 22.4% for the same period of 2024, primarily due to the increase of revenues by 2.7% and ~~the~~Administrative decrease of cost of goods sold by 22.1% resulting from the decrease of costs of raw materials of the touch screens machine production, partially offset by the increase of labor costs market during the first three months ended March 31, 2025.Expenses

Selling Expenses

	For the Three Months Ended June 30,						Change
(in millions, except percentage)	2025			2024			Amount		%
General and Administrative Expenses	$	0.9		$	0.8		$	0.1		12.5	%
as a percentage of revenues		7.3	%		6.6	%				0.7	%

	Three-Month Period Ended March 31,						Change
(in millions, except percentage)	2025			2024			Amount			%
Selling Expenses	$	0.1		$	0.5		$	(0.4	)		(80.0	)%
as a percentage of revenues		0.6	%		3.4	%					(2.8	)%

General and administrative expenses were $0.9 for the three months ended June 30, 2025, compared to $0.8 million in the same period in 2024, representing an increase of $0.1 million, or 12.5%. The increase was primarily due to $0.1 million professional fees during the three months ended June 30, 2025.

~~Selling expenses~~Research ~~were~~and ~~$0.1~~Development million for the three-month period ended March 31, 2025, compared to $0.5 million in the same period in 2024, representing a decrease of $0.4 million, or 80.0%. The decrease was primarily due to the less traveling expenses as the selling team using online communications to market the products during the three months ended March 31, 2025.Expenses

General and Administrative Expenses

	For the Three Months Ended June 30,						Change
(in US dollars, except percentage)	2025			2024			Amount		%
Research and Development Expenses	$	-		$	43,211		$	43,211		(100.0	%
as a percentage of revenues		0.0	%		0.3	%				(0.3	)%

	Three-Month Period Ended March 31,						Change
(in millions, except percentage)	2025			2024			Amount		%
General and Administrative Expenses	$	1.6		$	0.5		$	1.1		220.0	%
as a percentage of revenues		10.5	%		3.4	%				7.1	%

Research and development expenses were nil and $43,211 for three months ended June 30, 2025 and 2024, respectively.

~~General and~~Operating administrative expenses were $1.6 million for the three-month period ended March 31, 2025, compared to $0.5 million in the same period in 2024, representing an increase of $1.1 million, or 220.0%. The increase was primarily due to the increase of $0.5 million professional fees and $0.5 million of amortization of prepaid marketing research fees (see Note 3 of the accompanying financial statements) and $0.1 million of miscellaneous expenses including $45,739 allowance for credit losses of advance to vendors during the three months ended March 31, 2025.Income

~~Research~~Total operating income was $3.1 million for the three months ended June 30, 2025 as compared to $3.7 million of the same period of last year, primarily due to lower gross margin and higher, ~~Development~~general ~~Expenses~~and administrative expenses, partially offset by the lower selling expenses and research & development expenses for the three months ended June 30, 2025.

	Three-Month Period Ended March 31,						Change
(in US dollars, except percentage)	2025			2024			Amount			%
Research and Development Expenses	$	-		$	42,738		$	(42,738	)		(100.0	)%
as a percentage of revenues		0.0	%		0.0	%					0.0	%

Gain on Changes in Fair Value of Common Stock Purchase Warrants

Research and development expenses were nil and $42,738 for three-month period ended March 31, 2025, and 2024, respectively.

	For the Three Months Ended June 30,						Change
(in US dollars, except percentage)	2025			2024			Amount			%
Gain on changes in fair value of common stock purchase warrants	$	-		$	37,751		$	(37,751	)		(100.0	)%
as a percentage of revenues		0.0	%		0.3	%					(0.3	)%

6Gain on changes in fair value of common stock purchase warrants for the three months ended June 30, 2024 was $37,751 (See Note 10 (b) of the accompanying financial statements).

~~Operating Income~~6

~~Total operating~~Income income was $4.0 million for the three-month period ended March 31, 2025 as compared to $2.3 million of the same period of last year, primarily due to higher gross margin and lower selling expenses, partially offset by higher general and administrative expenses for the three-month period ended March 31, 2025.Taxes

Interest Expenses

	For the Three Months Ended June 30,						Change
(in millions, except percentage)	2025			2024			Amount			%
Income before Income Taxes	$	3.1		$	3.8		$	(0.7	)		(18.4	)%
Income Tax (Expense)		(0.9	)		(1.1	)		(0.8	)		18.2	%
Effective income tax rate		28.1	%		28.9	%					(0.8	)%

	Three-Month Period Ended March 31,						Change
(in millions, except percentage)	2025			2024			Amount			%
Interest Expenses	$	0.0		$	1.2		$	(1.2	)		(100.0	)%
as a percentage of revenues		0.0	%		8.1	%					(8.1	)%

The effective income tax rates for the three months ended June 30, 2025 and 2021 were 28.1% and 28.9%, respectively.

~~For the~~Net three-month period ended March 31, 2025 and 2024, interest expenses were nil and $1.2 million respectively. The Company recognized interest expenses of convertible promissory notes in the amount of $1,169,974 (mainly the default interest charges of $1,145,995 upon the repayment of the notes payable) and $33,399, respectively. (See Note 10 (a) of the accompanying financial statements).Income

~~Income~~As a result of the above factors, we had a net ~~Taxes~~income of $2.2 million in the second quarter of 2025 compared to a net income of $2.7 million in the same quarter of 2024.

	Three-Month Period Ended March 31,						Change
(in millions, except percentage)	2025			2024			Amount			%
Income before Income Taxes	$	4.0		$	1.2		$	2.8			233.3	%
Income Tax (Expense)		(1.5	)		(0.6	)		(0.9	)		150.0	%
Effective income tax rate		36.5	%		54.2	%					(17.7	)%

Results of Operations - Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

~~The effective income tax rates for the three-month period ended March 31, 2025 and 2024 were 36.5% and 54.2%, respectively.~~Revenues

~~Net~~We generated revenue of $27.1 million for the ~~Income~~six months ended June 30, 2024, an increase of $0.9 million, or 3.4%, compared to $26.2 million in the same period of last year. This was mainly due to an increase of 3.4% in sales volume, and an increase of 4.2% in the average RMB selling price of our products, partially offset by 4.1% negative impact from exchange rate due to depreciation of RMB against US dollars, compared with those of the same period of last year.

As a result of the above factors, we had a net income of $2.5 million in the first quarter of 2025 compared to a net income of $0.6 million in the same quarter of 2024.

	For the Six Months Ended June 30,
	2025					2024					Change			Change
	Amount		%			Amount		%			Amount			%
	(in US Dollar millions except percentage)
Revenue from sales to customers in PRC	$	18.7		67.5	%	$	17.2		63.5	%	$	1.5			8.7	%
Revenue from sales to customers overseas		9.0		32.5	%		9.9		36.5	%		(0.9	)		(9.1	)%
Total Revenues	$	27.7		100	%	$	27.1		100	%	$	0.6			2.2	%

Liquidity and Capital Resources

	For the Six Months Ended June 30,
	2025					2024					Change			Change
	Unit		%			Unit		%			Unit			%
	(in UNIT, except percentage)
Units sold to customers in PRC		920,003		66.7	%		803,180		63.4	%		116,823			14.5	%
Units sold to customers overseas		458,284		33.3	%		463,895		36.6	%		(5,611	)		(1.2	)%
Total Units Sold		1,378,287		100	%		1,267,075		100	%		111,212			8.9	%

~~Historically,~~(i) ~~our~~PRC primary uses of cash have been to finance working capital needs. We expect to be able to meet our needs to fund operations, capital expenditures, and other commitments over the next 12 months primarily with our cash and cash equivalents, operating cash flows and bank borrowings.market

~~However,~~For wethe ~~may~~six ~~require~~months ~~additional~~ended ~~cash~~June ~~resources~~30, ~~due~~2025, torevenue ~~changes~~from inPRC ~~business~~market ~~conditions~~increased orby ~~other~~$1.5 ~~future~~million ~~developments~~or 8.7% as Ifa ~~these~~combined ~~sources~~result ~~prove~~of ~~insufficient~~(i) toan ~~meet~~increase ~~our~~of ~~cash~~8.7% in sales ~~requirements~~volume, weparticularly ~~may~~in ~~seek~~industrial tocontrol ~~raise~~computer ~~additional~~touchscreens, ~~funds~~automotive ~~through~~touchscreens, ~~the~~and ~~sale~~multi-functional ofprinter ~~equity~~touchscreens, partially oroffset ~~debt securities or~~ by ~~obtaining~~(ii) a ~~credit~~decrease ~~facility. Any issuance~~ of ~~additional~~4.6% ~~equity~~in ~~or equity-linked securities could dilute~~ the ~~ownership~~average ~~interests~~RMB ofselling ~~existing~~price ~~shareholders, while the incurrence~~ of ~~additional indebtedness would increase~~ our ~~debt~~products, ~~service obligations~~ and ~~could~~(iii) ~~subject~~0.5% usnegative toimpact ~~operating~~from ~~and financial covenants that~~exchange ~~may~~rate ~~restrict~~due ~~our~~to ~~business~~depreciation ~~activities.~~of ~~There~~RMB ~~can~~against beUS nodollars, ~~assurance~~compared ~~that~~with ~~financing~~those ~~will~~of ~~be available in~~ the ~~necessary~~same ~~amounts,~~period onof ~~terms~~last ~~acceptable to us, or at all~~year.

As of March 31, 2025, we had current assets of $119.8 million, consisting of $106.4 million in cash, $11.1 million in accounts receivable, $0.1 million in inventories, and $2.2 million in prepaid expenses and other current assets Our current liabilities as of March 31, 2025 were $5.4 million, which is comprised of $1.6 million in accounts payable, $0.4 million in amounts due to a related party, $1.3 million in income tax payable, $1.6 million in accrued expenses and other current liabilities. and $0.6 million in operating lease liabilities, current portion. We also had $0.4 million in operating lease liabilities, non- current as of March 31, 2025.7

7As for the RMB selling price, the decrease of 4.6% was mainly due to the lower demand of higher selling priced products of touchscreen machines in the PRC domestic market, including the decreased average RMB selling price of 25.6% in medical touchscreens and 1.6% in industrial control computer touchscreens during the six-month period ended June 30, 2025.

The Company has taken proactive efforts to market ~~following~~new ismodels aand ~~summary~~efforts ofto ~~our~~obtain ~~cash~~new ~~flows~~customers ~~provided~~and penetrate into new regions, our sales increased by ~~(used~~14.5% in) ~~operating~~South China, ~~investing~~and 13.2% in East China, and ~~financing~~1.5% ~~activities~~in ~~for~~Southwest China during the ~~three~~six-month ~~periods~~ period ended ~~March~~June 3130, 2025 ~~and 2024:~~.

	Three-Month Period Ended March 31,
(in US Dollar millions)	2025			2024
Net cash provided by (used in) provided by operating activities	$	2.0		$	(9.2	)
Net cash used in investing activities		(0.0	)		(0.1	)
Net cash provided by financing activities		0.0			7.5
Effect of foreign currency exchange rate changes on cash and cash equivalents		0.6			(1.4	)
Net increase (decrease) in cash and cash equivalents		2.7			(3.2	)
Cash and cash equivalents at the beginning of period		103.7			98.0
Cash and cash equivalents at the end of period	$	106.4		$	94.8

(ii) Overseas market

~~Operating~~For the six months ended June ~~Activities~~30, 2025, revenues from the overseas market were $9.0 million as compared to $9.9 million of the same period of 2024, representing a decrease by $0.9 million, or 9.1%, mainly due to a decrease of 7.3% in average selling price in RMB due to the lower demand on touchscreen machines in medical touchscreens, industrial control computer touchscreens, and automotive touchscreens, and 0.5% negative impact from exchange rate due to depreciation of RMB against US dollars, and the decrease of 1.2% in sales volume due to decreased sales in medical touchscreens, industrial control computer touchscreens and gaming touchscreens,

~~Net cash~~The ~~provided~~following bytable ~~operating~~summarizes ~~activities was $2.0 million for~~ the ~~three~~breakdown ~~months~~of ~~ended~~revenues ~~March~~by categories ~~31, 2025 as compared to net cash used~~ in US ~~operating activities of $9.2 million for the same period of the last year.~~dollars:

The positive cash flow for the three months ended March 31, 2025 was primarily due to i) $2.5 million net income, ii) the decrease of $0.5 million in prepaid expenses and current assets, iii) the increase of in $0.3 million accounts payable, $0.3 million due to a related party, $1.3 million in tax payable and $0.6 million in accrued expenses and current liabilities, partially offset by iv) the increase of $3.5 million in accounts receivable.

	Revenues For the Six Months Ended June 30,
	2025					2024					Change			Change
	Amount		%			Amount		%			Amount			Margin%
	(in US Dollars, except percentage)
Product categories by end applications
Automotive Touchscreens	$	7,083,405		25.6	%	$	7,576,318		27.9	%	$	(492,913	)		(6.5	)%
Industrial Control Computer Touchscreens		5,964,502		21.5	%		5,215,298		19.3	%		749,204			14.4	%
POS Touchscreens		4,361,733		15.7	%		3,882,557		14.3	%		479,176			12.3	%
Gaming Touchscreens		4,121,519		14.9	%		4,128,616		15.2	%		(7,097	)		(0.2	)%
Medical Touchscreens		3,614,745		13.0	%		4,143,888		15.3	%		(529,143	)		(12.8	)%
Multi-Functional Printer Touchscreens		2,563,129		9.3	%		2,165,157		8.0	%		397,973			18.4	%
Total Revenues	$	27,709,033		100.0	%	$	27,111,834		100.0	%	$	597,199			2.2	%

The ~~negative~~ ~~cash~~Company ~~flow~~continued ~~for~~to ~~the~~shift ~~three~~production ~~months~~mix from ~~ended~~traditional ~~March~~lower-end ~~31,~~products ~~2024~~such ~~was~~as ~~primarily~~touchscreens ~~due~~used toin i)industrial ~~increase~~control ofcomputer ~~$3.6~~industries ~~million~~to inhigh-end ~~accounts~~products ~~receivable, $3.4~~such ~~million~~as inindustrial control ~~prepaid~~computer ~~expenses~~touchscreens and ~~current~~POS ~~assets~~touchscreens, ~~ii)~~primarily ~~the~~due ~~decrease~~to of(i) ~~$3.4~~greater ~~million~~growth inpotential ~~accrued~~of ~~expenses~~computer ~~and~~screen ~~current~~models ~~liabilities,~~in ~~partially~~China, ~~offset by iii~~(ii) ~~net~~the ~~income~~stronger ofdemand ~~$0.6~~on ~~million~~higher-end ~~and~~touch ~~iv)~~screens ~~the~~made ~~increase~~with ofbetter ~~$0.6~~materials ~~million~~and inbetter ~~income tax payable~~quality.

~~Investing Activities~~Gross Profit and Gross Profit Margin

There was no cash flow in investing activities for the three-month period ended March 31, 2025.

	For the Six Months Ended June 30,						Change
(in millions, except percentage)	2025			2024			Amount		%
Gross Profit	$	9.7		$	8.2		$	1.5		18.3	%
Gross Profit Margin		35.2	%		30.2	%				5.0	%

~~Net~~Gross profit was ~~cash~~$9.7 ~~used~~million during the six months ended June 30, 2025, compared to $8.2 million in ~~investing~~the ~~activities~~same period of 2024. Our gross profit margin increased to 35.2% for the ~~three-month~~six ~~period~~months ended ~~March~~June 3130, ~~2024~~2025, ~~was~~as ~~$0.1~~compared ~~million~~to 30.2% for the ~~purchase~~same period of ~~property~~2024, ~~plant~~primarily due to ~~and~~the ~~equipment~~increase of revenues by 2.2%, particularly high-end products such as POS touchscreens, industrial control computer touchscreens, partially offset by the increase in cost of goods sold by 4.1% for the six months ended June 30, 2025.

~~Financing Activities~~8

~~There was~~Selling ~~no cash flow in investing activities for the three-month period ended March 31, 2025.~~Expenses

Net cash provided by financing activities for the three months ended March 21, 2024 was $7.5 million, including $9.0 million in net proceeds from the 2024 Public Offering, partially offset by $1.4 million repayment of convertible promissory notes, and $82,864 repayment of interest-free advances to a third party.

	For the Six Months Ended June 30,						Change
(in millions, except percentage)	2025			2024			Amount			%
Selling Expenses	$	0.2		$	0.7		$	(0.5	)		(71.4	)%
as a percentage of revenues		0.7	%		2.6	%					(1.9	)%

AsSelling expenses were of$0.2 ~~March~~million 31for the six-month period ended June 30, 2025, ~~our~~compared ~~cash~~to ~~and~~$0.7 ~~cash~~million ~~equivalents~~in ~~were~~the same period in 2024, representing a decrease of $~~106~~0.45 million, or 71.4%. The decrease was primarily due to the less traveling expenses as ~~compared~~the selling team using online communications to ~~$103.7~~market ~~million~~the atproducts ~~December~~during 31the six-month period ended June 30, ~~2024.~~2025

~~Days Sales~~General ~~Outstanding~~and ~~(“DSO”) has decreased to 55 days for the three-month period ended March 31, 2025 from 64 days for the year~~Administrative ~~ended December 31, 2024.~~Expenses

The majority of the Company’s revenues and expenses were denominated in Renminbi (“RMB”), the currency of the People’s Republic of China. There is no assurance that exchange rates between the RMB and the U.S. Dollar will remain stable. Inflation has not had a material impact on the Company’s business.

	For the Six Months Ended June 30,						Change
(in millions, except percentage)	2025			2024			Amount		%
General and Administrative Expenses	$	2.5		$	1.3		$	1.2		92.3	%
as a percentage of revenues		9.0	%		4.8	%				4.2	%

8General and administrative (G&A) expenses were $2.5 million for the six months ended June 30, 2025, compared to $1.3 million in the same period in 2024, representing an increase of $1.2 million, or 92.3%. The increase was primarily due to the increase of $0.4 million professional fees and $0.9 million of amortization of prepaid marketing research fees (see Note 3 of the accompanying financial statements), partially offset by the decrease of $0.1 million of miscellaneous expenses including $91,252 reversal of provision for obsolete inventory.

~~Based on~~Research ~~past performance~~ and ~~current~~Development expectations, we believe our cash and cash equivalents provided by operating activities and financing activities will satisfy our working capital needs, capital expenditures and other liquidity requirements associated with our operations for at least the next 12 months.Expenses

Holding Company Structure

	For the Six Months Ended June 30,						Change
(in US dollars, except percentage)	2025			2024			Amount			%
Research and Development Expenses	$	-		$	85,949		$	(85,949	)		(100.0	)%
as a percentage of revenues		0.0	%		0.3	%					(0.3	)%

~~There have~~Research ~~been~~and nodevelopment ~~changes~~expenses towere ~~the~~nil ~~Company’s~~and $42,738 ~~holding~~for ~~company structure during~~ the ~~three~~six months ended ~~March~~June 3130, 2025. ~~For more details, refer to the Company’s holding company structure disclosures set forth in Part II, Item 7, “Management’s Discussion~~ and ~~Analysis of Financial Condition and Results of Operations- Holding Company Structure” of the~~ 2024, ~~Form 10-K~~respectively.

~~Cash and Other Assets Transfers between the Holding Company and Its Subsidiaries~~9

~~Please see~~Operating “ITEM 7- Management’s Discussion and Analysis of Financial Condition and Results of Operations- Cash and Other Assets Transfers between the Holding Company and Its Subsidiaries” of the 2024 Form 10-K for more details.Income

~~Capital~~Total operating income was $7.0 million for the ~~Expenditure~~six ~~Commitment~~months ended June 30, 2025 as compared to $10.4 million of the same period of last year due to higher gross profit, lower selling expenses and research and development expenses, partially offset by higher general and administration expenses.

~~As of~~Gain ~~March~~on ~~31,~~changes ~~2025,~~in ~~the~~fair ~~Company~~value ~~had commitment~~ of ~~RMB5.0~~Common Stock ~~million~~Purchase ~~(equivalent to $0.7 million) for construction in progress.~~Warrants

Off-Balance Sheet Arrangements

	For the Six Months Ended June 30,						Change
(in US dollars, except percentage)	2025			2024			Amount			%
Gain on changes in fair value of Common Stock Purchase Warrants	$	-		$	45,572		$	(45,572	)		(100.0	)%
as a percentage of revenues		0.0	%		0.2	%					(0.2	)%

~~We had~~Gain noon ~~off-balance~~changes ~~sheet~~in ~~arrangements~~fair asvalue of ~~March~~common 31stock purchase warrants was $45,572 ~~2025~~for the six months ended June 30, 2024. (See Note 10 (b)).

~~Critical Accounting~~Interest ~~Policies~~ Expenses

The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2, “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2024 Form 10-K describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the 2024 Form 10-K.

	For the Six Months Ended June 30,						Change
(in millions, except percentage)	2025			2024			Amount			%
Interest Expenses	$	-		$	1.2		$	(1.2	)		(100.0	)%
as a percentage of revenues		0.0	%		4.4	%					(4.4	)%

~~Item~~For the six months ended 3.June ~~Quantitative~~30, 2024, the Company recognized interest expenses of convertible promissory notes in the amount of $1,169,974 (mainly the default interest charges of $1,145,995 upon the repayment of the notes payable) and ~~Qualitative~~$71,507, ~~Disclosures~~respectively. ~~About~~(See ~~Market~~Note ~~Risk~~9 (a) of the accompanying financial statements).

~~Not applicable~~Income ~~for smaller reporting companies.~~Taxes

Item 4. Controls and Procedures.

	For the Six Months Ended June 30,						Change
(in millions, except percentage)	2025			2024			Amount		%
Income before Income Taxes	$	7.1		$	5.0		$	2.1		42.0	%
Income Tax (Expense)		(2.3	)		(1.7	)				35.3	%
Effective income tax rate		32.8	%		35.1	%				(2.3	)%

~~Evaluation~~The effective income tax rates for the six months ended June 30, 2025 ofand ~~Disclosure~~2024 ~~Controls~~were 32.8% and ~~Procedures~~35.1%, respectively.

~~Under supervision~~Net and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”), we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2025, as a result of the material weakness identified below.Income

9As a result of the above factors, we had a net income of $4.8 million in the six months ended June 30, 2025 as compared to $3.3 million of the same period of last year

In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. GAAP. Based on such analysis and notwithstanding the identified material weakness, management, including our Chief Executive Officer and Chief Financial Officer, believe the unaudited condensed consolidated financial statements included in this Quarterly Report fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.10

~~Because of~~Liquidity its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and ~~presentation.~~Capital Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.Resources

~~Material~~Historically, our primary uses of cash have been ~~Weakness~~to finance working capital needs. We expect to be able to meet our needs to fund operations, capital expenditures, and other commitments over the next 12 months primarily with our cash and cash equivalents, operating cash flows and bank borrowings.

InHowever, we may require additional ~~connection~~cash ~~with~~resources ~~the~~due ~~audit~~to ofchanges ~~the~~in ~~financial~~business ~~year~~conditions ~~ended~~or ~~December~~other ~~31,~~future ~~2024~~developments. If these sources prove insufficient to meet our cash requirements, we ~~identified~~may ~~certain~~seek ~~control~~to ~~deficiencies~~raise inadditional ~~the~~funds ~~design~~through ~~and operation~~the sale of ~~our~~equity ~~internal~~or ~~controls~~debt ~~over~~securities ~~our~~or ~~financial~~by ~~reporting~~obtaining ~~that~~a ~~constituted~~credit facility. aAny ~~material~~issuance ~~weakness~~of inadditional ~~aggregation.~~equity Aor ~~“material weakness”~~equity-linked issecurities acould ~~deficiency,~~dilute orthe aownership ~~combination~~interests of ~~deficiencies~~existing shareholders, inwhile ~~internal~~the ~~control~~incurrence ~~over~~of ~~financial~~additional ~~reporting,~~indebtedness ~~such~~would ~~that~~increase ~~there~~our isdebt aservice obligations and could subject us to ~~reasonable~~operating ~~possibility~~and ~~that~~financial acovenants ~~material~~that ~~misstatement~~may ofrestrict our ~~company’s~~business ~~annual~~activities. orThere ~~interim~~can ~~financial~~be ~~statements~~no ~~will~~assurance ~~not~~that befinancing ~~prevented~~will be oravailable ~~detected~~in the necessary amounts, on aterms ~~timely~~acceptable ~~basis~~to us, or at all.

~~The~~As of June 30, 2025, we had ~~material~~current ~~weaknesses~~assets ~~related~~of to$123.2 ~~internal~~million, ~~control~~consisting ~~over~~of ~~financial~~$110.5 ~~reporting~~million ~~that~~in ~~was~~cash, ~~identified~~$10.7 ~~during~~million ~~the~~in ~~annual~~accounts ~~report~~receivable, of$0.1 ~~2024~~million ~~and~~in ~~still~~inventories, ~~applied~~and $1.8 million in prepaid expenses and other current assets Our current liabilities as of ~~March~~June 3130, 2025 were: $5.0 million, which is comprised of $1.5 million in accounts payable, $0.6 million in amounts due to a related party, $0.9 million in income tax payable, $1.4 million in accrued expenses and other current liabilities. and $0.6 million in operating lease liabilities, current portion. We also had $0.2 million in operating lease liabilities, non- current as of June 30, 2025.

●The ~~Lack~~following ofis ~~competent~~a ~~financial~~summary ~~reporting~~of ~~and~~our ~~accounting~~cash ~~personnel~~flows ~~with~~provided by ~~appropriate~~(used ~~understanding~~in) ofoperating, ~~U.S.~~investing, ~~GAAP~~ and ~~financial~~financing ~~reporting~~activities ~~requirements~~for tothe ~~design~~six ~~and~~months ~~implement~~ended ~~key~~June ~~controls~~30, ~~over~~2025 ~~financial~~and ~~reporting process;~~2024:

● Lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner.

	For the Six Months Ended June 30,
(in US Dollar millions)	2025			2024
Net cash provided by (used in) operating activities	$	4.7		$	(5.3	)
Net cash used in investing activities		(0.0	)		(0.1	)
Net cash provided by financing activities		0.0			7.8
Effect of foreign currency exchange rate changes on cash and cash equivalents		2.0			(2.1	)
Net increase in cash and cash equivalents		6.7			0.4
Cash and cash equivalents at the beginning of period		103.7			98.0
Cash and cash equivalents at the end of period	$	110.5		$	98.4

~~Management believes~~Operating that the material weaknesses that were identified did not have an effect on our financial results. However, management believes that these weaknesses, if not properly remediated, could result in a material misstatement in our financial statements in future periods.Activities

~~Because of~~Net ~~its~~cash ~~inherent~~provided ~~limitations,~~by ~~internal~~operating ~~control~~activities ~~over financial reporting may not prevent or detect misstatements~~was $4.7 ~~Projections~~million offor ~~any evaluation of effectiveness to future periods are subject to~~ the ~~risk~~six ~~that~~months ~~controls~~ended ~~may~~June ~~become inadequate because of changes in conditions~~30, or2025 ~~that the~~as ~~degree~~compared ~~of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined~~ to benet ~~effective~~cash ~~can~~used ~~provide~~in ~~only~~operating ~~reasonable~~activities ~~assurance~~of ~~with respect to financial statement preparation and presentation~~$9.2 ~~Because~~million offor the ~~inherent limitations of internal control, there is a risk that material~~same ~~misstatements~~period ~~may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features~~ of the ~~financial~~last ~~reporting process~~year. ~~Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.~~

10The positive cash flow for the six months ended June 30, 2025 was primarily due to i) $4.8 million net income, ii) $0.3 million of amortization of operating right-of-use assets, iii) the decrease of $0.9 million in prepaid expenses and current assets, iii) the increase of in $0.2 million accounts payable, $0.5 million due to related parties, $0.9 million in tax payable and $0.4 million in accrued expenses and current liabilities, partially offset by iv) the increase of $3.0 million in accounts receivable and v) the decrease of $0.3 million in operating lease liabilities.

~~Management’s~~The negative cash flow for the six months ended ~~Plan~~June 30, 2024 was primarily due to ~~Remediate~~i) increase of $3.6 million in accounts receivable, $3.4 million in prepaid expenses and current assets, ii) the ~~Material~~decrease ~~Weakness~~of $3.4 million in accrued expenses and current liabilities, partially offset by iii) net income of $0.6 million and iv) the increase of $0.6 million in income tax payable.

~~Management has~~Investing been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:Activities

●There ~~Identify~~was ~~gaps~~no incash ~~the~~flow ~~Company’s~~in ~~skills~~investing ~~base~~activities for ~~and~~ the ~~expertise~~six ofmonths ~~its~~ended ~~staff~~June ~~required~~30, ~~to meet the financial reporting requirements of a public company; and~~2025.

●Net ~~Continue~~cash toused ~~cooperate~~in ~~with~~investing ~~operation~~activities ~~teams~~for tothe six ~~ensure~~months aended ~~control~~June ~~environment~~30, in2024 ~~place,~~was ~~and~~$0.1 ~~monitor~~million for the ~~effectiveness~~purchase of ~~operations~~property, onplant ~~existing controls~~ and ~~procedures~~equipment.

~~● Establish procedures to assess compliance requirements under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and improve overall internal control.~~11

~~During the~~Financing first quarter of 2025, the management has not addressed the material weaknesses on internal control and will continue to implement the above improvement plans to ensure our financial reporting in compliance with US GAAP and SEC filing requirements.Activities

~~The Company~~There ~~recognizes~~was ~~that~~no ~~the~~cash ~~material~~flow ~~weaknesses~~ in ~~its~~financing ~~internal control over financial reporting will not be considered remediated until~~activities ~~the remediated controls operate~~ for ~~a sufficient period of time and can be tested and concluded by management to be designed and operating effectively. Because~~ the ~~Company’s~~six ~~remediation~~months ~~efforts~~ended ~~are~~June ~~ongoing~~30, ~~it cannot provide any assurance that these remediation efforts will be successful or that its internal control over financial reporting will be effective as a result of these efforts~~2025.

~~The Company~~Net ~~will~~cash ~~continue~~provided toby ~~evaluate~~financing ~~and~~activities ~~work~~for the tosix ~~improve~~months ~~its~~ended June ~~internal~~30, ~~control~~2024 ~~over~~was ~~financial~~$7.8 ~~reporting~~million, ~~related~~including to$9.0 ~~the~~million ~~identified~~in ~~material weaknesses,~~net ~~and~~proceeds ~~management~~from ~~may~~the ~~determine~~2024 toPublic ~~take~~Offering ~~additional~~and ~~measures~~$0.3 million toin ~~address~~proceeds ~~control~~from ~~deficiencies~~interest-free oradvances ~~determine~~from toa ~~modify~~related ~~the~~party, ~~remediation plan~~partially ~~described~~offset ~~above~~by $1.4 ~~The~~million ~~Company~~repayment ~~will~~of ~~report~~convertible ~~the~~promissory notes, ~~progress~~ and ~~status~~$82,864 repayment of ~~the~~interest-free ~~above~~advances ~~remediation efforts~~ to ~~the Audit Committee on~~ a ~~periodic basis~~third party.

~~Changes~~ As of June 30, 2025, our cash and cash equivalents inwere ~~Internal~~$110.5 ~~Control~~million, ~~over~~as ~~Financial~~compared ~~Reporting~~to $103.7 million at December 31, 2024.

~~As described~~Days ~~above,~~Sales ~~the~~Outstanding ~~Company~~(“DSO”) ishas increased ~~taking~~to ~~steps~~89 todays ~~remediate~~for the ~~material~~six ~~weakness~~months ~~noted~~ended ~~above.~~June ~~Other than in connection with these remediation steps~~30, ~~there~~2025 ~~have~~from ~~been~~64 nodays ~~changes~~for ~~in our internal control over financial reporting during~~ the ~~quarter~~year ended ~~March~~December 31, ~~2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting~~2024.

11The majority of the Company’s revenues and expenses were denominated in Renminbi (“RMB”), the currency of the People’s Republic of China. There is no assurance that exchange rates between the RMB and the U.S. Dollar will remain stable. Inflation has not had a material impact on the Company’s business.

~~PART~~Based on past performance and current expectations, IIwe -believe ~~Other~~our ~~Information~~cash and cash equivalents provided by operating activities and financing activities will satisfy our working capital needs, capital expenditures and other liquidity requirements associated with our operations for at least the next 12 months.

~~Item~~The majority of the Company’s 1revenues and expenses were denominated in Renminbi (“RMB”), the currency of the People’s Republic of China. ~~Legal~~There ~~Proceedings~~is no assurance that exchange rates between the RMB and the U.S. Dollar will remain stable. Inflation has not had a material impact on the Company’s business.

~~We may~~Based ~~from~~on ~~time~~past toperformance ~~time~~and becurrent ~~subject~~expectations, we tobelieve ~~various~~our ~~legal~~cash ~~or administrative claims~~ and ~~proceedings~~cash ~~arising~~equivalents inprovided ~~the~~by ~~ordinary~~operating ~~course~~activities ofand ~~business. Litigation~~financing oractivities ~~any~~will ~~other~~satisfy ~~legal~~our orworking ~~administrative~~capital ~~proceeding~~needs, capital ~~regardless~~expenditures ofand ~~the~~other ~~outcome,~~liquidity ~~can~~requirements ~~result~~associated inwith ~~substantial cost and the diversion of~~ our ~~resources,~~operations ~~including~~for ~~our~~at ~~management’s~~least ~~time~~the ~~and~~next ~~attention~~12 months.

~~As of~~Holding ~~the date of this Quarterly Report, we are not aware of any material, active, pending or threatened to which the~~ Company ~~or any of its subsidiaries is a party, or to which any of their property is subject~~Structure

~~Item~~There have been no changes 2to the Company’s holding company structure during the six months ended June 30, 2025. ~~Unregistered~~For ~~Sales~~more ofdetails, ~~Equity~~refer ~~Securities~~to the Company’s holding company structure disclosures set forth in Part II, Item 7, “Management’s Discussion and ~~Use~~Analysis of ~~Proceeds~~Financial Condition and Results of Operations- Holding Company Structure” of the 2024 Form 10-K.

~~Except as~~Cash ~~previously~~and ~~reported~~Other inAssets Transfers ~~our~~between ~~Current Reports on Form 8-K, we did not undertake any unregistered sales of our equity securities during~~ the ~~quarter~~Holding ~~ended~~Company ~~March~~and ~~31,~~Its ~~2025.~~Subsidiaries

~~During~~Please see “ITEM ~~the~~7- ~~quarter~~Management’s ~~ended~~Discussion ~~March~~and ~~31,~~Analysis ~~2025,~~of weFinancial ~~did~~Condition ~~not~~and ~~repurchase~~Results ~~any~~of ~~shares~~Operations- Cash and Other Assets Transfers between the Holding Company and Its Subsidiaries” of ~~our~~the ~~common~~2024 ~~stock~~Form 10-K for more details.

~~Item 3.~~Capital ~~Defaults Upon Senior Securities.~~Expenditure Commitment

~~None~~As of June 30, 2025, the Company had commitment of RMB5.0 million (equivalent to $0.7 million) for construction in progress.

~~Item 4.~~Off-Balance ~~Mine~~Sheet ~~Safety Disclosures.~~Arrangements

~~Not~~We had no off-balance ~~applicable~~sheet arrangements as of June 30, 2025.

~~Item 5. Other Information.~~12

~~Not applicable.~~Critical Accounting Policies

12The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2, “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2024 Form 10-K describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the 2024 Form 10-K.

Item 6 3. ~~Exhibits~~ Quantitative and Qualitative Disclosures About Market Risk.

Exhibit Number		Description of Document
3.1(1)		Amended and Restated Articles of Incorporation of the Company, dated September 30, 2020.
3.2(1)		Bylaws of the Company.
4.1(1)		Specimen Common Stock Certificate.
4.2		Form of Underwriter’s Warrants.
4.3		Common Stock Purchase Warrant dated October 27, 2021 issued by Wetouch Technology Inc
4.4		Common Stock Purchase Warrant dated November 5, 2021 issued by Wetouch Technology Inc.
4.5		Common Stock Purchase Warrant dated November 16, 2021 issued by Wetouch Technology Inc.
4.6		Common Stock Purchase Warrant dated November 24, 2021 issued by Wetouch Technology Inc.
4.7		Common Stock Purchase Warrant dated November 29, 2021 issued by Wetouch Technology Inc.
4.8		Common Stock Purchase Warrant dated December 2, 2021 issued by Wetouch Technology Inc.
4.9		Common Stock Purchase Warrant dated December 2, 2021 issued by Wetouch Technology Inc.
31.1*		Certification of The Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of The Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of The Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of The Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted 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).*

Not applicable for smaller reporting companies.

*Item ~~Filed~~4. ~~herewith~~Controls and Procedures.

**	Furnished herewith
(1)	Filed as an exhibit to the Company’s registration statement on Form S-1, File No. 333-270726 and incorporated herein by reference.

Evaluation of Disclosure Controls and Procedures

13Under supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”), we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2025, as a result of the material weakness identified below.

~~SIGNATURES~~In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. GAAP. Based on such analysis and notwithstanding the identified material weakness, management, including our Chief Executive Officer and Chief Financial Officer, believe the unaudited condensed consolidated financial statements included in this Quarterly Report fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

InBecause ~~accordance~~of ~~with~~its ~~the~~inherent ~~requirements~~limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of ~~Securities~~any ~~Exchange~~evaluation of ~~Act~~effectiveness to future periods are subject to the risk that controls may become inadequate because of ~~1934~~changes in conditions, or that the ~~registrant~~degree ~~has~~of ~~caused~~compliance ~~this~~with ~~Quarterly~~the ~~Report~~policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be ~~signed~~effective oncan provide only reasonable assurance with respect to financial ~~its~~statement ~~behalf~~preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the ~~undersigned~~financial reporting process. Therefore, ~~thereunto~~it ~~duly~~is ~~authorized~~possible to design into the process safeguards to reduce, though not eliminate, this risk.

	By:	/s/ Zongyi Lian
Date: October 8, 2025		Zongyi Lian
		Chief Executive Officer and President
		(Principal Executive Officer)
	By:	/s/ Xing Tang
Date: October 8, 2025		Xing Tang
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Material Weakness

14In connection with the audit of the financial year ended December 31, 2024, we identified certain control deficiencies in the design and operation of our internal controls over our financial reporting that constituted a material weakness in aggregation. 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 company’s annual or interim financial statements will not be prevented or detected on a timely basis.

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The material weaknesses related to internal control over financial reporting that was identified during the annual report of 2024 and still applied as of June 30, 2025 were:

	●	Lack of competent financial reporting and accounting personnel with appropriate understanding of U.S. GAAP and financial reporting requirements to design and implement key controls over financial reporting process;

	●	Lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner.

Management believes that the material weaknesses that were identified did not have an effect on our financial results. However, management believes that these weaknesses, if not properly remediated, could result in a material misstatement in our financial statements in future periods.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Management’s Plan to Remediate the Material Weakness

Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:

	●	Identify gaps in the Company’s skills base and the expertise of its staff required to meet the financial reporting requirements of a public company; and

	●	Continue to cooperate with operation teams to ensure a control environment in place, and monitor the effectiveness of operations on existing controls and procedures.

	●	Establish procedures to assess compliance requirements under the Sarbanes-Oxley Act of 2002 (the “*Sarbanes-Oxley Act*”) and improve overall internal control.

During the three and six months ended June 30, 2025, the management has not addressed the material weaknesses on internal control and will continue to implement the above improvement plans to ensure our financial reporting in compliance with US GAAP and SEC filing requirements.

The Company recognizes that the material weaknesses in its internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively. Because the Company’s remediation efforts are ongoing, it cannot provide any assurance that these remediation efforts will be successful or that its internal control over financial reporting will be effective as a result of these efforts.

The Company will continue to evaluate and work to improve its internal control over financial reporting related to the identified material weaknesses, and management may determine to take additional measures to address control deficiencies or determine to modify the remediation plan described above. The Company will report the progress and status of the above remediation efforts to the Audit Committee on a periodic basis.

Changes in Internal Control over Financial Reporting

As described above, the Company is taking steps to remediate the material weakness noted above. Other than in connection with these remediation steps, there have been no changes in our internal control over financial reporting during the three and six months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - Other Information

Item 1. Legal Proceedings.

We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, can result in substantial cost and the diversion of our resources, including our management’s time and attention.

As of the date of this Quarterly Report, we are not aware of any material, active, pending or threatened to which the Company or any of its subsidiaries is a party, or to which any of their property is subject

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Except as previously reported in our Current Reports on Form 8-K, we did not undertake any unregistered sales of our equity securities during the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2025, we did not repurchase any shares of our common stock.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits

Exhibit Number		Description of Document
3.1⁽¹⁾		Amended and Restated Articles of Incorporation of the Company, dated September 30, 2020.

3.2⁽¹⁾		Bylaws of the Company.

4.1⁽¹⁾		Specimen Common Stock Certificate.

4.2		Form of Underwriter’s Warrants.

4.3		Common Stock Purchase Warrant dated October 27, 2021 issued by Wetouch Technology Inc

4.4		Common Stock Purchase Warrant dated November 5, 2021 issued by Wetouch Technology Inc.

4.5		Common Stock Purchase Warrant dated November 16, 2021 issued by Wetouch Technology Inc.

4.6		Common Stock Purchase Warrant dated November 24, 2021 issued by Wetouch Technology Inc.

4.7		Common Stock Purchase Warrant dated November 29, 2021 issued by Wetouch Technology Inc.

4.8		Common Stock Purchase Warrant dated December 2, 2021 issued by Wetouch Technology Inc.

4.9		Common Stock Purchase Warrant dated December 2, 2021 issued by Wetouch Technology Inc.

31.1*		Certification of The Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of The Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**		Certification of The Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**		Certification of The Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted 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 herewith

**	Furnished herewith

(1)	Filed as an exhibit to the Company’s registration statement on Form S-1, File No. 333-270726 and incorporated herein by reference.

SIGNATURES

In accordance with the requirements of Securities Exchange Act of 1934, the registrant has caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: October 9, 2025	By:	/s/ Zongyi Lian
		Zongyi Lian
		Chief Executive Officer and President
		(Principal Executive Officer)

Date: October 9, 2025	By:	/s/ Xing Tang
		Xing Tang
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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