| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ● Basis of presentation and consolidation These
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting
principles in the United States of America (“US GAAP”). These unaudited condensed consolidated financial statements include
the financial statements of the Company and its subsidiaries. All significant inter-company balances and transactions within the Company
have been eliminated upon consolidation. The
unaudited condensed consolidated financial information as of June 30, 2023, and for the three and six months ended June 30, 2023, and
2022 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain
information and footnote disclosures, which are normally included in annual consolidated financial statements prepared in accordance
with US GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information
should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on May 4, 2023. In
the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the
Company’s unaudited condensed consolidated financial position as of June 30, 2023 and its unaudited condensed consolidated results
of operations for the three and six months ended June 30, 2023 and 2022, and its unaudited condensed consolidated cash flows for the
three and six months ended June 30, 2023 and 2022, as applicable, have been made. The results of operations are not necessarily indicative
of the operating results for the fiscal year or any future periods. ● Use of estimates The
preparation of these condensed consolidated financial statements in conformity with the US GAAP requires management to make estimates
and judgments that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date
of these condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.
The Company bases its estimates and judgments on historical experience and on various other assumptions and information that are believed
to be reasonable under the circumstances. Estimates and assumptions of future events and their effects cannot be perceived with certainty
and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained
and as our operating environment changes. Significant estimates and assumptions made by management include, among others, useful lives
and impairment of long-lived assets, collectability of accounts receivable, advances to suppliers, allowance for doubtful accounts, reserve
for inventory obsolescence, fair value of goodwill and valuation of derivative liabilities. While the Company believes that the estimates
and assumptions used in the preparation of these condensed consolidated financial statements are appropriate, actual results could differ
from those estimates. Estimates and assumptions are periodically reviewed, and the effects of revisions are reflected in the consolidated
financial statements in the period they are determined to be necessary. ● Business combinations The
Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 “Business
Combinations”. The cost of an acquisition is measured as the aggregate of the acquisition date fair values of the assets transferred
and liabilities incurred by the Company to the sellers and equity instruments issued. Transaction costs directly attributable to the
acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values
as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total costs of acquisition,
fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over
(ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the
acquisition date amounts of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated income
statements. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments
to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Subsequent to the conclusion of the measurement
period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any further adjustments
are recorded in the consolidated income statements. In
a business combination achieved in stages, the Company re-measures the previously held equity interest in the acquiree immediately before
obtaining control at its acquisition date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated income
statements. When
there is a change in ownership interests or a change in contractual arrangements that results in a loss of control of a subsidiary, the
Company deconsolidates the subsidiary from the date control is lost. Any retained non-controlling investment in the former subsidiary
is measured at fair value and is included in the calculation of the gain or loss upon deconsolidation of the subsidiary. ● Cash and cash equivalents Cash
and cash equivalents consist primarily of cash on hand and cash in banks which is readily available in checking and saving accounts.
The Company maintains cash with various financial institutions in the PRC where its accounts are uninsured. The Company has not
experienced any losses from funds held in bank accounts and believes it is not exposed to any risk on its bank accounts. ● Accounts receivable and allowance for doubtful accounts Accounts
receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days
from delivery. Credit is extended based on evaluation of a customer’s financial condition, the customer creditworthiness and their
payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances
over 90 days and over a specified amount are reviewed individually for collectability. At the end of each period, the Company specifically
evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress
of the collection of accounts receivables. For the receivables that are past due or not being paid according to payment terms, the appropriate
actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged
off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. We do
not have any off-balance-sheet credit exposure related to its customers. ● Advances to suppliers Advances
to suppliers consist of prepayments to the Company’s vendors, such as pharmaceutical manufacturers and medicine suppliers. The
Company typically prepays for the purchase of our merchandise, especially for those salable, scarce, personalized medicine or medical
devices. The Company typically receive products from vendors within three to nine months after making prepayments. The Company continuously
monitor delivery from, and payments to, the vendors while maintaining a provision for estimated credit losses based upon historical experience
and any specific supplier issues, such as discontinuing of inventory supply, that have been identified. If the Company has difficulty
receiving products from a vendor, the Company will cease purchasing products from such vendor, request return of our prepayment
promptly, and if necessary, take legal action. The Company has not taken such type of legal action during the reporting periods. If none
of these steps are successful, management will then determine whether the prepayments should be reserved or written off. As of June 30,
2023 and December 31, 2022, the allowance for doubtful accounts was Nil ● Businesses held for sale In
late 2022, we committed to a plan to dispose of the Zhongshan, Minkang, Qiangsheng and Eurasia hospitals and ceased the operation of
the Guoyitang hospital. A An impairment is recorded, if necessary, on an annual basis or at the point of sale, based on an impairment
assessment report by a third party. When
we acquire a business, a substantial portion of the purchase price of the acquisition may be allocated to goodwill and other identifiable
intangible assets. The amount of the purchase price which is allocated to goodwill and other intangible assets is determined by the excess
of the purchase price over the net identifiable assets acquired. The current accounting standards require that goodwill and intangible
assets should be deemed to have indefinite lives, which should be tested for impairment at least annually (or more frequently if impairment
indicators arise). Other intangible assets are amortized over their useful lives. In 2022, we recorded impairment losses totaling approximately
$5.4 million with respect to the goodwill relating to our acquisitions of the Guanzan Group, Zhongshan, Guoyitang, Minkang, Qiangsheng
and Eurasia. On
December 28, 2022, the Company entered into an agreement to transfer 87% of the equity interests in Zhongshan to the prior owner and
retain 13% of the equity interests in Zhongshan. As consideration for the transfer and pursuant to an amendment to the original stock
purchase agreement, the original seller agreed to return the 40,037 shares of Common Stock previously issued (reflecting the Reverse
Splits) and RMB 40,000,000 in cash (approximately ($6,116,207) previously paid upon the acquisition of Zhongshan. The former owner also
agreed to release the Company from any and all claims relating to two earn out payments that were payable under the original purchase
agreement. The Company received a put option to sell part or all of its 13% interest in Zhongshan before December 31, 2032, based on
a valuation determined by a reputable third-party appraisal firm jointly chosen by the two parties. On September 1, 2023, 39,037 shares
of Common Stock were returned to the Company. The remaining 1,000 shares were returned in the form of $3,055 in cash because the shares
were sold by the original seller. The transaction is expected to close by December 31, 2023, at which time the cash paid at the time
of the transaction will also be returned. On
December 28, 2022, the Company entered into an agreement to transfer 90% of the equity interests in the Qiangsheng, Eurasia and Minkang
hospitals to their former owners. Pursuant to the agreement, the Company will transfer 90% of the equity interests in each of the three
hospitals and continue to own 10% of the equity interests in each hospital. As consideration for the transfer and pursuant to an amendment
to the original stock purchase agreement, the original sellers agreed to return the 80,000 shares of Common Stock previously issued (reflecting
the Reverse Splits) and RMB 20,000,000 (approximately $2,767,860) in cash previously paid upon the acquisition of the three hospitals.
The former owner also agreed to release the Company from any and all claims relating to two earn out payments that were payable under
the original purchase agreement. The Company received a put option to sell part or all of its 10% interest in each of the three hospitals
to the former owner before December 31, 2032, based on a valuation determined by a reputable third-party appraisal firm jointly chosen
by the parties. On December 9, 2022, 43,600 shares of Common Stock were returned to the Company and on September 1, 2023, 36,400 shares
of Common Stock were returned to the Company. The transaction is expected to close by December 31, 2023, at which time the cash paid
at the time of the transaction will also be returned. The
Company determined that the plan and the subsequent actions taken to dispose of the four hospitals qualified as held for sale operations
under the criteria set forth in the ASC 205-20 Presentation of Financial Statements – Discontinued Operation. The
carrying amount of the major classes of assets and liabilities of the businesses held for sale as of June 30, 2023 and December 31, 2022
consist of the following:
June 30, December 31,
2023 2022
Assets from held for sale
Current assets
Cash and cash equivalents $ 154,503 $ 53,928
Accounts receivable, net 516,287 501,054
Advances to suppliers 197,737 211,335
Amount due from related parties 337,904 350,577
Inventories, net 153,977 155,736
Prepayments and other receivables 772,974 827,043
Total current assets 2,133,382 2,099,673
Non-current assets
Deferred tax assets (128 ) (133 )
Property, plant and equipment, net 1,191,554 1,254,328
Operating lease-right of use assets 2,247,673 2,506,954
Goodwill - -
Total non-current assets 3,439,099 3,761,149
Total assets held for sale $ 5,572,481 $ 5,860,822
Liabilities of held for sale businesses
Current liabilities
Short-term loans $ 207,589 $ 215,375
Long-term loans due within one year - -
Accounts payable, trade 1,375,938 1,480,098
Advances from customers 2,668 1,537
Taxes payable 324,582 336,755
Other payables and accrued liabilities 766,601 739,873
Lease liability-current 456,369 466,312
Total current liabilities 3,133,747 3,239,950
Non-current liabilities
Lease liability-non current 2,214,033 2,245,373
Total non-current liabilities 2,214,033 2,245,373
Total liabilities 5,347,780 5,485,323 The
summarized operating results of the businesses held for sale included in the Company’s consolidated statements of operations consist
of the following:
For the six months ended
2023 2022
Revenues $ 330,281 2,850,027
Cost of revenues 149,253 1,233,688
Gross profit 181,028 1,616,339
Operating expense 253,107 1,598,666
Other expense (70,288 ) (194,199 )
Loss before income taxes (142,367 ) (176,526 )
Income tax expense 735 22,212
Loss from businesses held for sale $ (143,102 ) $ (198,738 ) ● Inventories Inventories
are stated at the lower of cost or market value. Cost is determined using the weighted average method, and market value is the middle
(the second highest) value among an inventory item’s replacement cost, market celling and market floor. The Company carries out
physical inventory counts on a monthly basis at each store and warehouse location. The Company reviews historical sales activity quarterly
to determine excess, slow-moving items and potentially obsolete items. The Company provides inventory reserve based on the excess quantities
on hand equal to the difference, if any, between the cost of the inventory and its estimated market value, or obsolescence of inventories
determined principally by customer demand. As of June 30, 2023 and December 31, 2022, the Company recorded an allowance for obsolete
inventories, which mainly consists of expired medicine, of $26,604 and $59,567, respectively. ● Property, plant and equipment Property,
plant, and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is calculated on the straight-line
basis over the following expected useful lives from the date on which they become fully operational and after taking into account their
estimated residual values:
Items Expected Residual
Building 20 years 5 %
Office equipment 3 years 5 %
Electronic equipment 3 years 5 %
Furniture 5 years 5 %
Medical equipment 10 years 5 %
Vehicles 4 years 5 %
Leasehold Improvement Shorter of lease term or useful life 5 % Expenditures
for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation
are removed from the accounts and any resulting gain or loss is recognized in the results of operations. ● Leases On
January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-02. For all leases that were entered into prior
to the effective date of ASC 842, we elected to apply the package of practical expedients. Based on this guidance, the Company did not
reassess the following: (1) whether any expired or existing contracts are or contain leases; (2) the lease classification for any expired
or existing leases; and (3) initial direct costs for any existing leases. The
Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”)
assets, current portion of obligations under operating leases, and obligations under operating leases, non-current on the Company’s
consolidated balance sheets. Finance leases are included in property and equipment, net, current portion of obligations under capital
leases, and obligations under capital leases, non-current on our consolidated balance sheets. Operating
lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over
the lease term at commencement date, adjusted by the deferred rent liabilities at the adoption date. As most of the Company’s leases
do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date
in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes
lease incentives and initial direct costs incurred. The Company’s terms may include options to extend or terminate the lease when
it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over
the lease term. ● Goodwill Goodwill
represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired
subsidiary at the date of acquisition. Goodwill is not amortized, and is tested for impairment at least annually, more often when circumstances
indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill
is immediately written off to its fair value and the loss is recognized in the consolidated statements of operations and comprehensive
loss. Impairment losses on goodwill are not reversed. The
Company reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment
may exist annually or more frequently if events and circumstances indicate that it is more likely than not that an impairment has occurred.
The Company has the opinion to assess qualitative factors to determine whether it is necessary to perform the two-step in accordance
with ASC 350-20. If the Company believes, as a result of the qualitative carrying amount, the two-step quantities impairment test described
below is required. The
first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting
unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If
the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying
value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a
business acquisition with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the
reporting unit. The excess of the fair value of the reporting unit. over the amounts assigned to the assets and liabilities is the implied
fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being
a discounted cash flow. The fair value of discounted cash flow was determined using management’s estimates and assumptions. Management
evaluates the recoverability of goodwill, with the assistance of a third party evaluation firm, by performing a qualitative assessment
before using a two-step impairment test approach at the reporting unit level. If the Company reorganizes its reporting structure in a
manner that changes the composition of one or more of its reporting units, goodwill will be reassigned based on the relative fair value
of each of the affected reporting units. An impairment is recorded, if necessary, at the end of each year, based on an annual impairment
assessment report by a third party. As of June 30, 2023 and December 31, 2022, the
Company recorded impairments for goodwill of Nil As a result of the impairments recognized on December 31, 2022, the
remaining goodwill of the Company was related to the acquisitions of Guanzan and Zhongshan. The remaining goodwill of Guanzan was $1,392,449,
and the remaining goodwill of Zhongshan was $ 673, 217 ● Impairment of long-lived assets and intangibles In accordance with the provisions of ASC Topic
360, “ Impairment or Disposal of Long-Lived Assets Intangible assets that are considered
to have a definite useful life are amortized over their useful lives using a method of amortization that reflects the pattern in which
the economic benefits of the intangible assets are consumed or otherwise used up in accordance with ASC No. 350, “Intangibles - Goodwill
and other” (“ASC 350”). The Company’s identifiable intangibles are reviewed for impairment in accordance with ASC 360 whenever
events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be
held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated
by the assets. If such assets are considered to be impaired, the impairment is measured by the amount by which the carrying amount of
the assets exceeds the fair value of the assets. Goodwill and other certain purchased
intangible assets have been recorded in the Company’s financial statements as a result of acquisitions. Goodwill represents the
excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. Under ASC
350 goodwill is not amortized, but rather is subject to an annual impairment test. ASC 350 requires goodwill to
be tested for impairment at the reporting unit level at least annually or between annual tests in certain circumstances and written down
when impaired. Goodwill is tested for impairment by comparing the fair value of the reporting unit with its carrying value. ASC 350 allows an entity to first
assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If the
qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required.
If it does result in a more likely than not indication of impairment, the two-step impairment test is performed. Alternatively, ASC 350
permits an entity to bypass the qualitative assessment for any reporting unit and proceed directly to performing the first step of the
goodwill impairment test. ● Revenue recognition We adopted Accounting Standard Codification (“ASC”)
Topic 606, Revenues from Contract with Customers (“ASC 606”) for all periods presented with respect to each of our segments.
Under ASC 606, revenue is recognized when control of the promised goods and services is transferred to the Company’s customers,
in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods and services, net
of value-added tax. The Company determines revenue recognition through the following steps:
● Identify the contract with a customer;
● Identify the performance obligations in the contract;
● Determine the transaction price;
● Allocate the transaction price to the performance obligations in the contract; and
● Recognize revenue when (or as) the entity satisfies a performance obligation. The transaction price is allocated to each performance
obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized
when that performance obligation is satisfied by the control of the promised goods and services is transferred to the customers, which
at a point in time or over time as appropriate. The Company’s revenue is net of value added
tax (“VAT”) collected on behalf of PRC tax authorities in respect to the sales of products. VAT collected from customers,
net of VAT paid for purchases, is recorded as a liability in the accompanying consolidated balance sheets until it is paid to the relevant
PRC tax authorities. ● Cost of revenue Cost of revenue consists primarily of cost of
goods purchased from suppliers plus direct material costs for packaging and storage, direct labor, which are directly attributable to
the acquisition and maintaining of products for sales. Cost of revenues also include impairment loss of our products which are obsolete
or expired for sale, if any. Shipping and handling costs, associated with the distribution of finished products to customers, are borne
by the customers.
● Comprehensive
income ASC Topic 220, “Comprehensive Income”, ● Income taxes Income taxes are determined in accordance with
the provisions of ASC Topic 740, “ Income Taxes ASC 740 prescribes a comprehensive model for how
companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to
be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely
than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be
measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with
the tax authority assuming full knowledge of the position and relevant facts. For the six months ended June 30, 2023 and 2022,
the Company did not incur any interest or penalties associated with the tax positions it has taken. As of June 30, 2023, the Company did
not have any significant unrecognized uncertain tax positions. ● Value added tax Sales revenue represents the invoiced value of
goods sold, net of VAT. All of the Company’s products that are sold in the PRC are subject to a VAT on the gross sales price. The
VAT rates range up to 13%, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on its purchase
activities of merchandises, raw materials, utilities, and other materials which cost was included in the cost of producing or acquiring
its products for sales. The Company records a VAT payable net of payments if the VAT payable on the gross sales is larger than VAT paid
by the Company on purchase of finished goods; on the other hand, the Company records a VAT deductible in the accompanying financial statements
net of any VAT payable at the end of reporting period. ● Convertible promissory notes The Company records debt net of debt discount
for beneficial conversion features and warrants, on a relative fair value basis. Beneficial conversion features are recorded pursuant
to the Beneficial Conversion and Debt Topics of the FASB Accounting Standards Codification. The amounts allocated to warrants and beneficial
conversion rights are recorded as debt discount and as additional paid-in-capital. Debt discount is amortized to interest expense over
the life of the debt. ● Debt issuance costs and debt discounts The Company may record debt issuance costs and/or
debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such
as warrants). These costs are amortized to interest expense through the maturity of the debt. If a conversion of the underlying debt occurs
prior to maturity a proportionate share of the unamortized amounts is immediately expensed. ● Beneficial conversion feature The Company evaluates the conversion
feature of its convertible promissory notes to determine whether it was beneficial as described in ASC 470-20. The intrinsic value of
a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the
convertible notes payable and may not be settled in cash upon conversion, is treated as a discount to the convertible notes payable. This
discount is amortized over the period from the date of issuance to the date the notes is due using the effective interest method. If the
notes payable are retired prior to the end of their contractual term, the unamortized discount is expensed in the period of retirement
to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering
the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the shares of Common
Stock at the commitment date to be received upon conversion. ● Discontinued operations In accordance with ASC 205-20, Reporting Discontinued
Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of
an entity is required to be reported as a discontinued operation if the disposal represents a strategic shift that has (or will have)
a major effect on an entity’s operations and financial results when the components of an entity meets the criteria in paragraph
205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management,
having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities,
and non-current liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing
operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as
components of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45. On October 19, 2022, the Company’s wholly
owned Guanzan subsidiary agreed to sell its 100% equity interest in Zhuoda and Zhuoda’s wholly owned subsidiary, Qianmei, to
the former owner. Guanzan had previously purchased Zhuoda for 44,000 of shares of Common Stock (post the Reverse Splits). As consideration
for the sale, the buyer agreed to return the 44,000 shares of Common Stock to the Company. The transaction closed effective
November 23, 2022, when 100% of the equity interests in Zhuoda were transferred to the former owners and the 44,000 shares
of Common Stock were returned to the Company. On December 28, 2022, the Company entered into
an agreement to transfer 87% of the equity interests in Zhongshan to the prior owner. Pursuant to the agreement, the Company agreed to
transfer 87% of the equity interests in Zhongshan to the former owner and will retain 13% of the equity interests in Zhongshan. As consideration
for the transfer and pursuant to an amendment to the original stock purchase agreement, the original seller agreed to return the 40,037
shares of Common Stock previously issued (reflecting Two Reverse Splits) and RMB 40,000,000 in cash (approximately ($6,116,207) previously
paid upon the acquisition of Zhongshan. The former owner also agreed to release the Company from any and all claims relating to two earn
out payments that were payable under the original purchase agreement. The Company received a put option to sell part or all of its 13%
interest in Zhongshan before December 31, 2032, based on a valuation determined by a reputable third-party appraisal firm jointly chosen
by the two parties. On September 1, 2023, 39,037 shares of Common Stock were returned to the Company. The remaining 1,000 shares were
returned in the form of a cash payment of $3,055 because the shares were sold by the original seller. The transaction is expected to close
by December 31, 2023, at which time the cash paid at the time of the transaction wil |
