| Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include
all accounts of Meihua and its subsidiaries (collectively, the “Company”) and have been prepared in accordance with accounting
principles generally accepted in the United States of America (“U.S. GAAP”). All inter-company transactions have
been eliminated. Use of Estimates The preparation of consolidated financial statements
in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts reported and disclosed
in the consolidated financial statements and related notes. The most significant estimates and judgments include allowance for
credit losses, the valuation of inventory, useful life of property, plant and equipment and income taxes related to realization of deferred
tax assets and uncertain tax position. Actual amounts could differ from those estimates. Non-controlling interests Non-controlling interest represents the portion
of the net assets of subsidiaries attributable to interests that are not owned or controlled by the Company. The non-controlling interest
is presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling
interest’s operating results are presented on the face of the consolidated statements of income and comprehensive income as an allocation
of the total income for the year between non-controlling shareholders and the shareholders of the Company. As of December 31, 2023, non-controlling
interests represent non-controlling shareholders’ proportionate share of equity interests in Hainan Guoxie and Hainan Ruiying. Functional Currency and Foreign Currency
Translation The Company’s reporting currency is the
United States dollar (“US$”). The Company’s operations are principally conducted through the PRC subsidiaries where
the local currency is the functional currency. Therefore, the functional currency of Kang Fu is Hong Kong dollar and the functional currency
of other subsidiaries is Renminbi (“RMB”). Transactions denominated in currencies other than
the functional currencies are translated into the functional currency of the entity at the exchange rates prevailing on the transaction
dates. Monetary assets and liabilities denominated in currencies other than the applicable functional currency are translated into the
functional currency at the prevailing rates of exchange at the balance sheet date. The resulting exchange differences are reported in
the consolidated statements of income and comprehensive income. The assets and liabilities of the Company are
translated at the exchange spot rate at the balance sheet date, stockholders’ equity is translated at the historical rates and the
revenues and expenses are translated at the average exchange rates for the periods. The resulting translation adjustments are reported
under other comprehensive income in the consolidated statements of income and comprehensive income in accordance with Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 220, Comprehensive Income
For the Years Ended December 31
2023 2022 2021
Period Ended spot US$1=RMB 7.0999 US$1=RMB 6.8972 US$1=RMB 6.3726
Period Average US$1=RMB 7.0809 US$1=RMB 6.7290 US$1=RMB 6.4508 The exchange rates used for translation from Hong
Kong dollar to US$ was 7.8000, a pegged rate determined by the linked exchange rate system in Hong Kong. This pegged rate was used to
translate Kang Fu’s balance sheets, income statement items and cash flow items for each year ended December 31, 2023, 2022 and 2021. Certain Risks and Concentration The Company’s financial instruments that
potentially subject the Company to significant concentrations of credit risk consist primarily of cash and receivables. As of December
31, 2023 and 2022 substantially all the Company’s cash was held in major financial institutions located in Hong Kong and mainland
China, which institutions management considers to be of high credit quality. For the year ended December 31, 2023, one customer
accounted for approximately 16.84% of the Company’s total revenues. For the year ended December 31, 2022, two customers accounted
for approximately 27.63% and 10.97% of the Company’s total revenues, respectively. For the year ended December 31, 2021, two customers
accounted for approximately 21.91% and 11.26% of the Company’s total revenues, respectively. As of December 31, 2023, one customer accounted
for approximately 15.63% of the Company’s accounts receivable. As of December 31, 2022, two customers accounted for approximately
27.73% and 13.14% of the Company’s accounts receivable, respectively. For the year ended December 31, 2023, one supplier
accounted for approximately 14.46% of the Company’s total purchases. For the year ended December 31, 2022, one supplier accounted
for approximately 11.93% of the Company’s total purchases. There was no supplier that individually represented greater than 10%
of the total purchase of the Group for the year ended December 31, 2021. Fair Value Measurement Fair value is the price that would be received
from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When
determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers
the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use
when pricing the asset or liability. The Company adopted the guidance of Accounting
Standards Codification (“ASC”) 820 for fair value measurements which clarifies the definition of fair value, prescribes methods
for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
Level 2: Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
Level 3: Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The Company’s financial instruments include
cash, accounts receivable, bank acceptance receivables, due from related parties, accounts payable, other liabilities and accrued expenses
and short-term bank borrowings. The carrying amounts approximate their fair values due to their short maturities as of December 31, 2023
and 2022. The Company noted no transfers between levels
during any of the periods presented. The Company did not have any instruments that were measured at fair value on a recurring or non-recurring
basis as of December 31, 2023 and 2022. Cash Cash consists of petty cash on hand and cash held
in banks, which are highly liquid and are unrestricted as to withdrawal or use. Bank Acceptance Receivable Bank acceptance receivables are issued by a bank
under the request of the Company’s customers, to pay for the purchased goods. The Company can choose to hold acceptance notes until
maturity and receive the face value payment from the bank, or sell (exchange) the acceptance notes at a discount to another party willing
to wait until maturity to receive the bank’s promised payment. The maturity date of the receivables is all within one year of the
original issuance date and carried at face value. The Company is not lending money, it just sells goods to the customers (customers can
pay the purchased goods by cash, accounts receivable or bank acceptance receivables). The receivables mature within one year, and are
non-interest bearing. As bank acceptance receivables are issued by the banks and payments are guaranteed, the Company has not discounted
any bank acceptances and there were no endorsed bank acceptances that were unmatured as of December 31, 2023. Accounts Receivable and Allowance for Credit Losses In June 2016, the FASB issued ASU No. 2016-13,
“Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires
the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net
income. The Company adopted this guidance effective January 1, 2020. ASC 326 introduces an approach based on expected losses to estimate
the allowance for credit losses, which replaces the previous incurred loss impairment model. The adoption of this guidance did not have
a material impact on the Company’s consolidated financial statements. Accounts receivable are recognized and carried at original
invoiced amount less an estimated allowance for credit losses. The Company estimates the allowance for credit losses based on an analysis
of the aging of accounts receivable, assessment of collectability, including any known or anticipated economic conditions, customer-specific
circumstances, recent payment history and other relevant factors. The Company’s provision for credit losses
related to accounts receivable were $1,933,661, $ nil nil Inventories Inventories are valued using the lower of cost
or net realizable value. Cost is principally determined using the weighted-average method. Manufactured inventories included cost of materials,
labor and overhead expenses. The Company records adjustments to inventory for excess quantities, obsolescence, or impairment, when appropriate,
to reflect inventory at net realizable value. These adjustments are based upon a combination of factors including current sales volume,
market conditions, lower of cost or market analysis and expected realizable value of the inventory. There were no write-downs recognized on inventories
as of December 31, 2023 and 2022. Prepayment and other current assets As of December 31, 2023 and 2022, prepayment and
other current assets were $14,212,606 and $16,428,779. Prepayment and other assets primarily consist
of prepayments for land use rights and property, refundable tax credits and receivables, security deposits made to customers, advances
to employees and land use right receivable, which are presented net of allowance for credit losses. These balances are unsecured and are
reviewed periodically to determine whether their carrying value has become impaired. The Company considers the balances to be impaired
if the utilization or refund of the balances becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible
balances. The allowance is also based on management’s best estimate of specific losses on individual exposures, as well as a provision
on historical trends of collections and utilizations. Actual amounts received or utilized may differ from management’s estimate
of credit worthiness and the economic environment. Delinquent account balances are written off against allowance for credit losses after
management has determined that the likelihood of collection is not probable. The allowance for credit losses amounted to $ nil Property, Plant and Equipment Property, plant and equipment items are recorded
at their historic cost, less accumulated depreciation and impairment losses. The Company calculates depreciation using the straight-line
method, after consideration of the estimated residual values, over the following estimated useful lives:
Category Useful lives Estimated residual value
Buildings 20 years 10 %
Machinery and Equipment 10 years 10 %
Motor vehicles 5 years 10 %
Electronic Equipment 5 years 10 %
Office Equipment 3 years 10 %
Inspection Equipment 5 years 10 % Major improvements are capitalized and expenditures
for maintenance and repairs are expensed as incurred. Construction in progress represents property, plant and equipment under construction
or being installed. Costs include original cost, installation, construction and other direct costs. Interest expenses directly related
to construction in progress would be capitalized. Construction in progress is transferred to the appropriate fixed asset account and depreciation
commences when the asset has been substantially completed and placed in service. Intangible Assets Intangible assets are non-monetary assets without
physical substance. These items are initially measured at cost and subsequently carried at cost less any accumulated amortization and
impairment losses. Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives.
Amortization of finite-lived intangible assets is computed using the straight-line method over the estimated useful lives, which is as
follows:
Category Useful lives
Land use rights 50 years
Patent 5 years
Trademark 10 years Impairment of Long-Lived Assets The Company accounts for impairment of long-lived
assets in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment Investment In accordance with Financial Accounting Standards
Board (“FASB”) ASC 321, “Investment-Equity Securities,” the Company accounts for non-marketable securities on
a prospective basis. Equity investments that do not have readily determinable fair values and do not qualify for the net asset value practical
expedient are eligible for the measurement alternative. On March 3, 2011, Yada invested in Yangzhou Juyuan
Guarantee Co., Ltd (“Juyuan”) and obtained a 12% equity interest of Juyuan. Since the Company does not have significant influence
on the private company which do not have readily determinable fair values, the Company has elected the measurement alternative defined
as cost, less impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical
or a similar investment of the Company. The investment is reviewed periodically to determine if its value has been impaired and adjustments
are recorded as necessary in profit or loss for the period. On January 5, 2023, majority shareholder of Juyuan purchased 5% equity interest
of Juyuan from Yada for a consideration of $353,062 (RMB 2.5 million). Investments in entities in which the Company can
exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting
in accordance with ASC 323, Investments-Equity Method and Joint Ventures (“ASC 323”). Under the equity method, the Company
initially records its investment at cost and the difference between the cost of the equity investee and the amount of the underlying equity
in the net assets of the equity investee is accounted for as if the investee were a consolidated subsidiary. The share of earnings or
losses of the investee are recognized in the consolidated statements of comprehensive loss. Equity method adjustments include the Company’s
proportionate share of investee income or loss, adjustments to recognize certain differences between the Company’s carrying value
and its equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method.
The Company assesses its equity investment for other-than-temporary impairment by considering factors as well as all relevant and available
information including, but not limited to, current economic and market conditions, the operating performance of the investees including
current earnings trends, the general market conditions in the investee’s industry or geographic area, factors related to the investee’s
ability to remain in business, such as the investee’s liquidity, debt ratios, and cash burn rate and other company-specific information. Investments in equity securities without readily
determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical
or a similar investment of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events
or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the consolidated statements
of comprehensive loss equal to the amount by which the carrying value exceeds the fair value of the investment. Prior to the adoption
of ASU 2016-01 on January 1, 2019, these investments were accounted for using the cost method of accounting, measured at cost less other-than-temporary
impairment. On December 1, 2022, Huadong invested RMB 40 million
into Jiangsu Zhongxiangxin International Science and Technology Innovation Park Co., Ltd. (“Zhongxiangxin”), and obtained
25% ownership interest of Zhongxiangxin. Zhongxiangxin manufactures and sells medical materials in the PRC. The Company accounted for
the investments using the equity method, because the Company has significant influence but does not own a majority equity interest or
otherwise control over the equity investee. Under the equity method, the Company adjusts the carrying amount of the investment and recognizes
investment income or loss for its share of the earnings or loss of the investee after the date of investment. When the Company’s
share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses,
unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investee. For the years ended December
31, 2023 and 2022, the investment gain from Zhongxiangxin was $4,832 and $290, respectively. The Company continually reviews its investments
in equity investees to determine whether a decline in fair value below the carrying value is other-than-temporary. The primary factors
the Company considers in its determination include the financial condition, operating performance and the prospects of the equity investee;
other company specific information such as recent financing rounds; the geographic region, market and industry in which the equity investee
operates; and the length of time that the fair value of the investment is below its carrying value. If the decline in fair value is deemed
to be other-than-temporary, the carrying value of the equity investee is written down to fair value. For the years ended December 31, 2023, 2022 and
2021, no impairment indicators were identified and no loss related to revaluation of its investment in the private company was recorded. Value-added Tax Value-added taxes (“VAT”) collected
from customers relating to product sales and remitted to governmental authorities are presented on a net basis. VAT collected from customers
is excluded from revenue which is recorded in VAT payable. The Company is subject to a VAT rate of 13%. The VAT payable may be offset
by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. Related Parties Parties are considered to be related to the Company
if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with
the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal
owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly
influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests. The Company discloses all significant related party transactions. Revenue Recognition Effective January 1, 2018, the Company adopted
ASC Topic 606 using the modified retrospective adoption method. Based on the requirements of ASC Topic 606, revenue is recognized when
control of the promised goods or services is transferred to the customers in an amount that reflects the consideration the Company expects
to be entitled to receive in exchange for those goods or services. The Company primarily sells its products to hospitals and medical equipment
companies. Revenue is recognized when the following 5-step revenue recognition criteria are met:
1) Identify the contract with a customer
2) Identify the performance obligations in the contract
3) Determine the transaction price
4) Allocate the transaction price
5) Recognize revenue when or as the entity satisfies a performance obligation Revenue from product sales is recognized at the
point in time control of the products is transferred, generally upon customer receipt based upon the standard contract terms. Shipping
and handling activities are considered to be fulfillment activities rather than promised services and are not, therefore, considered to
be separate performance obligations. The Company’s sales terms provide no right of return outside of a standard quality policy and
returns are generally not significant. Payment terms for product sales are generally set at 90 to 180 days after the consideration becomes
due and payable. Revenue Disaggregation The Company’s disaggregated revenues are
represented by two categories which are type of goods and type of customers. Type of Goods
For the year ended December 31,
2023 2022 2021
US$ US$ US$
Self-Manufactured Products 48,196,669 50,514,976 48,059,165
Resales of Sourced Disposable Medical Devices from Third Party Manufacturers 48,902,246 52,831,365 55,978,545
Total Revenue 97,098,915 103,346,341 104,037,710 Type of Customers
For the year ended December 31,
2023 2022 2021
US$ US$ US$
Direct sales 8,077,373 9,465,644 9,499,748
Distributors 89,021,542 93,880,697 94,537,962
Total Revenue 97,098,915 103,346,341 104,037,710 Earnings per Ordinary Share Earnings (loss) per ordinary share is calculated
in accordance with ASC 260, Earnings per Share Comprehensive Income (Loss) ASC 220, Comprehensive Income (“ASC 220”)
establishes rules for reporting and display of comprehensive income and its components. ASC 220 requires that unrealized gains and losses
on the Company’s foreign currency translation adjustments be included in comprehensive income (loss). Advertising Costs The Company’s advertising costs are expensed
as incurred. Advertising expenses are included in selling expenses in the accompanying consolidated statements of income and comprehensive
income. Advertising expenses were $8,096, $95,432 and $21,498 for the years ended December 31, 2023, 2022 and 2021, respectively. Research and Development Costs Research and development expenses are expensed
as incurred. Research and development expenses were $2,753,315, $2,962,904 and $2,725,014 for the years ended December 31, 2023, 2022
and 2021, respectively. Income Tax Current income taxes are provided on the basis
of net profit for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income
tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are recognized for temporary
differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net operating
loss carry forwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance
with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply
to taxable income in which temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities
of changes in tax rates is recognized in the statement of comprehensive income in the period of the enactment of the change. The Company considers positive and negative evidence
when determining whether a portion or all of its deferred tax assets will more likely than not be realized. This assessment considers,
among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration
of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies. The ultimate
realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward
periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization
of deferred tax assets, the Company has considered possible sources of taxable income including (i) future reversals of existing
taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carryforwards, (iii) future
taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected
within the industry. The Company recognizes a tax benefit associated
with an uncertain tax position when, in its judgment, it is more likely than not that the position will be sustained upon examination
by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the Company initially and subsequently
measures the tax benefit as the largest amount that the Company judges to have a greater than 50% likelihood of being realized upon ultimate
settlement with a taxing authority. The Company’s liability associated with unrecognized tax benefits is adjusted periodically due
to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments
are recognized entirely in the period in which they are identified. The Company’s effective tax rate includes the net impact of
changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. The Company
classifies interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. Segment Reporting FASB 280, “Segment Reporting,” establishes
standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure
as well as information of the Company’s business segments, geographical areas, segments and major customers. The Company uses the
“management approach” in determining reportable operating segments. The management approach considers the internal organization
and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the
source for determining the Company’s reportable segments. The chief operating decision maker is the Company’s president and
Chief Executive Officer (“CEO”). Management, including the chief operating decision maker, reviews operating results of different
products at revenue level with no allocation of operating costs. Consequently, based on management’s assessment, the Company has
determined that it has only one operating segment as defined by FASB ASC 280. The Company has disclosed the type of revenue by government category
as follows.
December 31, 2023 December 31, 2022 December 31, 2021
US$ US$ US$
Category Produced Purchased Total Produced Purchased Total Produced Purchased Total
Class I 6,259,470 8,695,782 14,955,252 7,463,707 8,572,512 16,036,219 6,151,443 7,331,962 13,483,405
Class II 37,515,249 35,188,004 72,703,253 37,229,199 36,177,490 73,406,689 36,788,116 41,313,745 78,101,861
Class III 895,344 1,572,707 2,468,051 1,189,906 1,863,990 3,053,896 1,094,957 2,291,899 3,386,856
Others 3,526,606 3,445,753 6,972,359 4,632,164 6,217,373 10,849,537 4,024,649 5,040,939 9,065,588
Total 48,196,669 48,902,246 97,098,915 50,514,976 52,831,365 103,346,341 48,059,165 55,978,545 104,037,710 Class I, II, and III medical devices are defined
by the National Medical Products Administration of China according to their risk levels under the Regulation on the Supervision and Administration
of Medical Devices (2021 Revision), Article 6 as follows:
● “Class I Medical Devices” means medical devices with low risks, whose safety and effectiveness can be ensured through routine administration.
● “Class II Medical Devices” means medical devices with moderate risks, which shall be strictly controlled and administered to ensure their safety and effectiveness.
● “Class III Medical Devices” means medical devices with relatively high risks, which shall be strictly controlled and administered through special measures to ensure their safety and effectiveness. Furthermore, the Company has disclosed revenue by major product type
included in each government category.
December 31, December 31, December 31,
2023 2022 2021
Category Products US$ US$ US$
Class I Eye drops bottle 1,904,140 2,583,231 2,398,222
Oral medicine bottle 2,900,606 3,965,345 3,263,135
Anal bag 1,527,406 837,328 739,376
Other Class I 8,623,100 8,650,315 7,082,672
Subtotal-Class I 14,955,252 16,036,219 13,483,405
Class II Masks 55,428 410,163 600,534
Identification tape 11,386,775 12,262,269 15,049,686
Disposable medical brush 8,808,084 8,337,650 8,493,760
Gynecological inspection kits 7,453,735 7,571,089 8,752,617
Surgical kit 3,327,658 4,830,930 4,754,769
Medical brush 5,776,772 5,231,299 4,130,703
Medical kit 2,614,953 4,066,663 5,037,054
Other Class II 33,279,848 30,696,626 31,282,738
Subtotal-Class II 72,703,253 73,406,689 78,101,861
Class III Electronic pump 225,510 142,828 246,819
Anesthesia puncture kit 326,671 539,615 430,288
Disposable infusion pump 176,061 280,081 278,734
Infusion pump 304,978 367,652 309,746
Electronic infusion pump 967 44,812 291,725
Laparoscopic trocar 44,783 139,284 219,901
Other Class III 1,389,081 1,539,624 1,609,643
Subtotal-Class III 2,468,051 3,053,896 3,386,856
Others 6,972,359 10,849,537 9,065,588
Total 97,098,915 103,346,341 104,037,710 For the years ended December 31, 2023, 2022 and
2021, revenues and assets within PRC contributed over 99.5% of the Company’s total revenues and assets. The Outbreak of COVID-19 On January 30, 2020, the World Health Organization
declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern,” and on March
11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” COVID-19 has had a severe and negative
impact on the Chinese and the global economy and such impact persists as of the date of this annual report. In fiscal year 2021, with the stable control of
the domestic epidemic in China, the market of masks was no longer in urgent shortage compared to the same period in 2020, and the production
of epidemic prevention products resumed more normal production levels. In general, with the precise control of the epidemic in China,
our production and operations have recovered smoothly, and the demand for other products has increased gradually. After the initial outbreak
of COVID-19, from time to time, some instances of COVID-19 infections have emerged in various regions of China, including the infections
caused by the Omicron variants in 2022. For example, a wave of infections caused by the Omicron variants emerged in Shanghai in 2022,
and a series of restrictions and quarantines were implemented to contain the spread. The pandemic did not have a significant impact on
the Company’s operation for the year ended December 31, 2023. On May 5, 2023, the WHO declared that COVID-19
is now an established and ongoing health issue which no longer constitutes a public health emergency of international concern. However,
the extent of the impact on the Company’s future financial results will be dependent on future developments such as the length and
severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact
of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and
unpredictable. Given this uncertainty, the Company is currently unable to quantify the expected impact of the COVID-19 pandemic on its
future operations, financial condition, liquidity and results of operations if the current situation continues. Recent Accounting Pronouncements In October 2021, the FASB issued ASU No. 2021-08,
“‘Business Combinations (Topic 805): Accounting for Contract Assets and Co |
