Cover
Cover | 6 Months Ended |
Jun. 30, 2024 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Jun. 30, 2024 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2024 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 000-56532 |
Entity Registrant Name | ESG INC. |
Entity Central Index Key | 0001883835 |
Entity Tax Identification Number | 87-1918342 |
Entity Incorporation, State or Country Code | NV |
Entity Address, Address Line One | 523 School House Rd. |
Entity Address, City or Town | Kennett Square |
Entity Address, State or Province | PA |
Entity Address, Postal Zip Code | 19348 |
City Area Code | 267 |
Local Phone Number | 467-5871 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 25,899,468 |
CONSOLIDATED BALANCE SHEET (Una
CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Current Assets | ||
Cash | $ 135,223 | $ 342,342 |
Accounts receivable and other receivables | 149,360 | 79,221 |
Advance to suppliers | 1,425,950 | 166,010 |
Inventaries | 2,173,954 | 1,651,376 |
Total Current Assets | 3,884,487 | 2,238,949 |
Property, plant and equipment, net | 17,763,242 | 18,694,969 |
Intangible assets, net | 2,997,136 | 3,085,906 |
Value added tax receivable | 2,267,926 | 2,211,980 |
Note receivable | 41,848 | |
Total Non-current Assets | 23,028,304 | 24,034,703 |
Total Assets | 26,912,791 | 26,273,652 |
Currrent Liabilities | ||
Short-term bank loans | 6,877,941 | 6,904,228 |
Account payable | 3,012,362 | 1,450,405 |
Payable to related party | 30,000 | |
Accrued expenses and other liabilities | 2,536,454 | 2,312,772 |
Deferred revenue | 1,263,353 | 1,355,552 |
Total Current Liabilities | 13,690,110 | 12,052,957 |
Long-term payable | 1,331,190 | 1,423,116 |
Total Non-current liabilities | 1,331,190 | 1,423,116 |
Total Liabillities | 15,021,300 | 13,476,073 |
Shareholders' Equity (Deficit) | ||
Common stock, $0.001 par value, 65,000,000 authorized,25,899,468 issued and outstanding as of June 30, 2024 and December 31,2023. | 25,900 | 25,900 |
Additional paid in capital | 11,152,388 | 11,152,388 |
Accumulated comprehensive income (loss) | (597,819) | (430,206) |
Accumulated deficit | (1,731,131) | (1,224,811) |
Equity Attributable to stockholders of ESG Inc. | 8,849,338 | 9,523,271 |
Equity attributable to noncontrolling interest | 3,042,153 | 3,274,308 |
Total Equity | 11,891,491 | 12,797,579 |
Total Liabilities and Stockholders' Equity | $ 26,912,791 | $ 26,273,652 |
CONSOLIDATED BALANCE SHEET (U_2
CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 65,000,000 | 65,000,000 |
Common stock, shares issued | 25,899,468 | 25,899,468 |
Common stock, shares outstanding | 25,899,468 | 25,899,468 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Revenues | $ 2,509,781 | $ 3,632,544 | $ 4,888,062 | $ 5,440,863 |
Cost of goods sold | 2,077,594 | 2,929,277 | 4,546,508 | 4,394,606 |
Gross Profit | 432,187 | 703,267 | 341,554 | 1,046,257 |
Research and development cost | 128,696 | 174,263 | 259,784 | 304,467 |
Selling expenses | 2,285 | 377 | 2,484 | 600 |
General and administrative expense | 145,305 | 323,177 | 463,422 | 596,318 |
Operating Income | 155,901 | 205,450 | (384,136) | 144,872 |
Interest (expense) | (132,118) | (199,973) | (281,605) | (349,687) |
Other Income (loss) | 80,540 | 75,684 | (15,424) | 103,528 |
Income before Income Taxes | 104,323 | 81,161 | (681,165) | (101,287) |
Income taxes | ||||
Consolidated net Income (loss) | 104,323 | 81,161 | (681,165) | (101,287) |
Less: Net loss attributable to noncontrolling interest | 22,976 | 24,608 | (174,845) | (15,492) |
Net Income (Loss) Attributable to Shareholders of ESG Inc. | 81,347 | 56,553 | (506,320) | (85,795) |
Other comprehensive items | ||||
Foreign currency translation gain (loss) attributable to the Company | (8,033) | (413,983) | (167,613) | (370,924) |
Foreign currency translation gain (loss) attributable to noncontroling interest | (2,746) | (141,551) | (57,310) | (126,828) |
Total Comprehensive Income Attributable to Noncontrolling Interest | 20,230 | (116,943) | (232,155) | (142,320) |
Total comprehensive Income Attributable to Shareholders of Esg Inc. | $ 73,314 | $ (357,430) | $ (673,933) | $ (456,719) |
Net Loss Per Share: Basic | $ 0 | $ (0.01) | $ (0.03) | $ (0.02) |
Net Loss Per Share: Diluted | $ 0 | $ (0.01) | $ (0.03) | $ (0.02) |
Weighted Average Number of Shares Outstanding: Basic | 25,899,468 | 25,899,468 | 25,899,468 | 25,899,468 |
Weighted Average Number of Shares Outstanding: Diluted | 25,899,468 | 25,899,468 | 25,899,468 | 25,899,468 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total Companys Equity [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2022 | $ 25,900 | $ 11,152,388 | $ (900,098) | $ (148,590) | $ 10,129,600 | $ 3,438,129 | $ 13,567,729 |
Beginning balance, shares at Dec. 31, 2022 | 25,899,468 | ||||||
Net loss | (142,348) | (142,348) | (40,100) | (182,448) | |||
Foreign currency translation gain | 43,059 | 43,059 | 14,723 | 57,782 | |||
Ending balance, value at Mar. 31, 2023 | $ 25,900 | 11,152,388 | (1,042,446) | (105,531) | 10,030,311 | 3,412,752 | 13,443,063 |
Ending balance, shares at Mar. 31, 2023 | 25,899,468 | ||||||
Net loss | 56,553 | 56,553 | 24,608 | 81,161 | |||
Foreign currency translation gain | (413,983) | (413,983) | (141,551) | (555,534) | |||
Ending balance, value at Jun. 30, 2023 | $ 25,900 | 11,152,388 | (985,893) | (519,514) | 9,672,881 | 3,295,809 | 12,968,690 |
Ending balance, shares at Jun. 30, 2023 | 25,899,468 | ||||||
Beginning balance, value at Dec. 31, 2023 | $ 25,900 | 11,152,388 | (1,224,811) | (430,206) | 9,523,271 | 3,274,308 | 12,797,579 |
Beginning balance, shares at Dec. 31, 2023 | 25,899,468 | ||||||
Net loss | (587,667) | (587,667) | (197,821) | (785,488) | |||
Foreign currency translation adjustment | (159,580) | (159,580) | (54,564) | (214,144) | |||
Ending balance, value at Mar. 31, 2024 | $ 25,900 | 11,152,388 | (1,812,478) | (589,786) | 8,776,024 | 3,021,923 | 11,797,947 |
Ending balance, shares at Mar. 31, 2024 | 25,899,468 | ||||||
Net loss | 81,347 | 81,347 | 22,976 | 104,324 | |||
Foreign currency translation adjustment | (8,033) | (8,033) | (2,746) | (10,779) | |||
Ending balance, value at Jun. 30, 2024 | $ 25,900 | $ 11,152,388 | $ (1,731,131) | $ (597,819) | $ 8,849,338 | $ 3,042,153 | $ 11,891,491 |
Ending balance, shares at Jun. 30, 2024 | 25,899,468 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Consolidated net loss | $ (681,165) | $ (101,287) |
Adjustments to reconcile loss to net cash used in operating activities: | ||
Depreciation and amortization | 901,289 | 740,663 |
Changes in assets and liabilities: | ||
Accounts receivable and other receivable | (70,139) | (268,142) |
Advance to suppliers | (1,259,940) | (424,335) |
Inventory | (522,578) | 448,821 |
Value added tax receivable | (55,946) | 84,612 |
Note receivable | 41,848 | 2,179 |
Accounts payable | 1,561,957 | (65,750) |
Payable to related party | (30,000) | 8,689 |
Accrued expenses and other paybles | 223,682 | 176,975 |
Deferred revenue | (92,199) | (175,244) |
Net cash provided by operating activities | 16,808 | 427,181 |
Cash flows from investing activities: | ||
Acquisition of fixed assets | (264,441) | |
Net cash used in investing activities | (264,441) | |
Cash flows from financing activities: | ||
Proceeds from loans | 41,517 | |
Payment of debt | (98,370) | |
Net cash provided by (used in) financing activities | (56,854) | |
Effect of exchange rate changes on cash | 97,368 | (419,605) |
Net increase (decrease) in cash | (207,118) | 7,576 |
Cash, at beginning of period | 342,342 | 199,045 |
Cash, at end of period | 135,223 | 206,621 |
Supplemental disclousures of cash flow information: | ||
Cash paid for interest | (281,605) | (349,687) |
Cash paid for income tax |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1- ORGANIZATION AND DESCRIPTION OF BUSINESS ESG Inc. (“ESG”) was incorporated in July 2021, a Nevada corporation and headquartered at Kennett Square, Pennsylvania, USA, and is a holding company without operations and is engaged in food production and distribution through its subsidiaries. ESG incorporated ESG China Limited as ESG’s wholly owned subsidiary in Hong Kong on November 18, 2022. ESG China Limited incorporated Hainan ESG Technology Co., Ltd., a China corporation (“Hainan ESG”) with 100% On September 28, 2023, ESG entered into a share exchange agreement with Funan Allied United Farmer Products Co., Ltd., a China corporation incorporated in May 2017 (“AUFP”), and 74.52% of shareholders of AUFP, (each a “Shareholder,” and collectively, the “Shareholders”), through Hainan ESG. Pursuant to such agreement, the Shareholders exchanged their equity of AUFP to Hainan ESG for shares of common stock of ESG, and ESG has agreed to offer 10,432,800 74.52% AUFP incorporated Anhui Allied United Mushroom Technology Co., Ltd. (“AUMT”) in China in March 2018, to manufacture white button mushroom compost while AUFP incorporated Anhui Allied United Mushroom Co., Ltd. (“AUM”) in China in April, 2018, to grow fresh white button mushroom and provide mushroom growing management services. AUFP, AUMT and AUM are operating entities in China. Prior to the share exchange, Mr. Zhi Yang owned 30 24.52% 10% 74.52% 83.526% 5.406% Since the Company is effectively controlled by the same controlling shareholders before and after the share exchange agreement, it is considered under common control. Therefore the above mentioned transactions were accounted for as a recapitalization. The reorganization has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying financial statements of the Company. Our operating subsidiaries are involved in direct white button mushroom composting, growing, food production, distribution as well as import and export of Phase III compost and food to strategize. With the core business philosophy to develop and operate sustainable and technology-driven food businesses consistent with the principles of Environmental, Sustainable and Governance investing, we believe that the growing global demand for sustainable high quality food presents a unique opportunity to operate companies engaged in this critical area that is being paid increasing attention by global investors. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. The consolidated financial statements of the Company include the financial statements of the Company and its 74.52% 25.48% 3,042,153 3,274,308 Interim Financial Information The unaudited financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to interim financial information and the requirements of Form 10-Q and Rule 8-03 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosure required by accounting principles generally accepted in the United States of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. These financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2023, as not all disclosures required by generally accepted accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting policies and methods of computations as the audited financial statements as of and for the year ended December 31, 2023. Use of estimates In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant items subject to such estimates and assumptions include allowance for doubtful accounts, advances to suppliers, valuation of inventories, useful lives of property, plant, and equipment and intangible assets. Cash and cash equivalent Cash and cash equivalent includes demand deposits with financial institutions that are highly liquid in nature. Account receivable Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s payment history, its current creditworthiness and current economic trends. Accounts are written off after efforts at collection prove unsuccessful. As of June 30, 2024 and December 31, 2023, allowance for doubtful accounts was nil 0 0 Advances to suppliers, net Advances to suppliers represent prepayments made to ensure continuous high-quality supplies and favorable purchase prices for premium quality. These advances are settled upon suppliers delivering raw materials to the Company when the transfer of ownership occurs. The Company review its advances to suppliers on a periodic basis and makes general and specific allowances when there is doubt as to the ability of a supplier to provide supplies to the Company or refund an advance. As of June 30, 2024 and December 31, 2023, advance to suppliers was $ 1,425,950 166,010 Inventory Inventory is comprised primarily of raw materials, work-in-progress and finished goods. The value of inventory is determined using the weighted average method. The Company periodically estimates an inventory allowance for estimated unmarketable inventories when necessary. Inventory amounts are reported in net of allowances. As of June 30, 2024 and December 31, 2023, inventories were $ 2,173,954 1,651,376 Property, plant and equipment, net Property, plant and equipment are stated at cost, less accumulated depreciation. Major repair and improvements that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Repair and maintenance costs are expensed as incurred. Depreciation is recorded principally by the straight-line method over the estimated useful lives of our property, plant and equipment which generally have the following ranges: buildings and improvements: 20 5 10 3 5 Intangible assets, net Intangible assets with finite lives are amortized using the straight-line method over their estimated period of benefit. Evaluation of the recoverability of intangible assets is made to take into account events or circumstances that warrant revise estimates of useful lives or that indicate that impairment exists. All of the Company’s intangible assets are subject to amortization. No impairment of intangible assets has been identified as of the balance sheet date. Intangible assets consist of land use rights, patent and purchased software. Intangible assets are stated at cost less accumulated amortization. The land purchased for industrial use has the right of use for 50 50 12 5 Revenue recognition The Company follows Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606). FASB ASC Topic 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies each performance obligation. Revenue is generated by selling fresh mushrooms to authorized distributors and wholesalers mainly in Yangzi River Delta. Contracts were signed after the communication of the price and quantities with customers. Our sales terms generally do not allow to sell without a deposit being made and do not allow for a right of return. Usually, the deposit from the customer equals or more than the sales amount. Control of the mushrooms is transferred upon receipt or loaded in the truck of carriers at our warehouse, as determined by the specific terms of the contract. Upon transfer of control to the customer, which completes our performance obligation, revenue is recognized. We signed contracts with two distributors who purchase all the products. Sell volume to one distributor was 41% 59% Deferred income Deferred revenue consists primarily of government grants. Government grants (sometimes referred to as subsidies, subventions, etc.) are as assistance by government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to the operating activities of the entity. Government grants received relating to depreciable assets are recorded as deferred income and recognized in over the life of the related assets. The Company recorded income when receiving a grant which constitutes compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs. Research and development expenses Research and development expenses are expensed in the period when incurred. These costs primarily consist of costo f materials used, salaries paid for the Company’s development department, and fees paid to the third parties. The research and development expenses were $ 128,696 259,784 174,263 304,467 Noncontrolling interests The Company follows FASB ASC Topic 810, “ The net income (loss) attributed to NCI was separately designated in the accompanying statements of operations and comprehensive income (loss). Losses attributable to NCI in a subsidiary may exceed a non-controlling interest’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. AUFP and its subsidiaries, AUM and AUMT were 25.48% 3,042,153 3,274,308 22,976 24,608 174,845 15,492 Foreign currency translation and comprehensive income (loss) The accounts of the Company’s Chinese entities are maintained in Chinese Yuan (“RMB”) and the accounts of the U.S. parent company are maintained in United States dollar (“USD”). The accounts of the Chinese entities were translated into USD in accordance with FASB ASC Topic 830 “Foreign Currency Matters.” All assets and liabilities were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at historical rates and the statements of operations and cash flows are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (loss) in accordance with FASB ASC Topic 220, “Comprehensive Income.” Gains and losses resulting from foreign currency transactions are reflected in the statements of operations. The Company follows FASB ASC Topic 220-10, “Comprehensive Income (loss).” Comprehensive income (loss) comprises net income (loss) and all changes to the statements of changes in stockholders’ equity, except those due to investments by stockholders, changes in additional paid-in capital and distributions to stockholders. The exchange rates used to translate amounts in RMB to USD for the purposes of preparing the CFS were as follows: Schedule of foreign currency exchange rates June 30, March 31, December 31, June 30, March 31, Period-end date USD: RMB exchange rate 7.2212 7.2021 7.0797 7.1632 6.8688 Average USD for the reporting period: RMB exchange rate 7.1859 7.1589 7.0750 6.9278 6.8419 Income taxes The Company uses the asset and liability method of accounting for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) tax payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior year’s net operating losses carried forward. Contingencies Certain conditions may exist as of the date the consolidated financial statements (“CFS”) are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. In accordance with ASC 450, the Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s CFS. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 3- GOING CONCERN The accompanying consolidated financial statements were prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. The Company had an accumulated deficit of approximately $ 1,731,131 1,224,811 To enhance our ability to continue to operate, we are dedicating resources to generate recurring revenues and sustainable operating cash flows. Currently, we are increasing our production capacity to generate more revnues and decrease unit cost. |
ACCOUNT RECEIVABLE AND OTHER RE
ACCOUNT RECEIVABLE AND OTHER RECEIVABLES | 6 Months Ended |
Jun. 30, 2024 | |
Credit Loss [Abstract] | |
ACCOUNT RECEIVABLE AND OTHER RECEIVABLES | NOTE 4- ACCOUNT RECEIVABLE AND OTHER RECEIVABLES Account receivable and other receivable consisted of the following: Schedule of foreign currency exchange rates June 30, 2024 December 31, Accounts receivable $ 61,315 $ - Other receivable 88,045 79,221 Total $ 149,360 $ 79,221 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 5 – PROPERTY, PLANT AND EQUIPMENT The following table summarizes our property, plant and equipment: Schedule of property and equipment June 30, 2024 December 31, Buildings and improvements $ 15,986,266 $ 16,276,614 Machinery, equipment and vehicle fleet 8,707,241 8,597,430 Construction in progress 21,295 21,682 Property, plant and equipment - cost 24,714,802 24,895,726 Less: Accumulated depreciation (6,951,560 ) (6,200,757 ) Property, plant and equipment - net $ 17,763,242 $ 18,694,969 For the three months ended June 30, 2024 and 2023, depreciation expense was $ 433,391 395,414 867,378 705,489 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 6: INVENTORIES Inventories consisted of the following: Schedule of inventories June 30 2024 December 31, (Unaudited) 2023 Raw materials $ 2,041,615 $ 1,516,634 Finished goods - - Work in progress - compost 88,715 90,326 - growing mushrooms 43,624 44,416 Total $ 2,173,954 $ 1,651,376 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 7: INTANGIBLE ASSETS Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization and consist of the following: Schedule of intangible assets June 30, 2024 December 31, (Unaudited) 2023 Land use right $ 3,268,621 $ 3,327,987 Software 7,563 7,701 Patent 6,919 7,045 Subtotal 3,283,103 3,342,733 Less: Accumulated amortization (285,967 ) (256,827 ) Total $ 2,997,136 $ 3,085,906 Amortization expenses were $ 16,894 17,368 33,911 35,174 Estimated future amortization expense is as follows as of June 30, 2024: Schedule of estimated future amortization expense Years ending December 31, Amortization expense 2024 67,437 2025 67,437 2026 67,437 2027 67,437 2028 67,437 Thereafter 2,659,951 Total 2,997,136 |
BANK LOANS
BANK LOANS | 6 Months Ended |
Jun. 30, 2024 | |
Bank Loans | |
BANK LOANS | NOTE 8- BANK LOANS Short-term bank loans consisted of the following: Schedule of short-term bank loans June 30, 2024 Interest Due date December 31, Interest Due date Agricultural Bank of China Funan Branch $ 788,818 4.50 % 4/06/25 $ 845,416 3.70 % 4/10/24 Anhui Funan Rural Commercial Bank 1,937,448 5.60 % 12/22/24 1,972,637 5.90 % 12/22/24 Anhui Funan Rural Commercial Bank 1,383,892 5.60 % 3/28/25 1,409,026 5.90 % 3/28/24 Anhui Funan Rural Commercial Bank 830,335 5.60 % 1/25/25 845,416 5.90 % 1/25/24 Industrial and Commercial Bank of China, Funan (1) 691,946 3.45 % 10/12/24 704,512 3.45 % 10/12/24 Industrial and Commercial Bank of China, Funan (2) 13,839 3.45 % 6/06/25 - - - Bank of China Funan Branch 1,107,113 3.60 % 3/15/25 1,127,221 3.60 % 3/15/25 Total $ 6,877,941 - - $ 6,904,228 - - (1) The loans from Bank of China were pledged by fixed assets as of June 30, 2024 and December 31, 2023, respectively. (2) The loans from Industrial and Commercial Bank of China, Funan branch were pledged by fixed assets as of June 30, 2024. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 9- ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: Schedule of accrued expenses and other current liabilities June 30, 2024 December 31, Advances from customers $ 74,262 $ 63,867 Salary payable 100,116 181,950 Tax payable 15,423 16,131 Other payable 2,346,653 2,050,824 Total $ 2,536,454 $ 2,312,772 Other payable was primarily comprised of loans from non-bank institutions. Loans included $ 276,778 281,805 1,383,891 1,409,026 |
VALUE ADDED TAX RECEIVABLE
VALUE ADDED TAX RECEIVABLE | 6 Months Ended |
Jun. 30, 2024 | |
Value Added Tax Receivable | |
VALUE ADDED TAX RECEIVABLE | NOTE 10- VALUE ADDED TAX RECEIVABLE Selling merchandise in China is generally subject to the value-added tax (“VAT”). The Company and its subsidiaries’ primary operations are classified as agriculture products and its revenue is exempt from VAT and income tax. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). VAT input was primarily due to purchase of property, plant and equipment. As of June 30, 2024 and December 31, 2023, VAT input was $ 2,267,926 2,211,980 |
ASSET ACQUISITION
ASSET ACQUISITION | 6 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
ASSET ACQUISITION | NOTE 11- ASSET ACQUISITION On May 11, 2021, Anhui Allied United Mushroom Co., Ltd. signed the Agreement (“Agreement”) with Suhua Yang and Hao Yan, the owners of Funan Zhihua Mushroom Co., Ltd. (“Target Company”). As the consideration of transferring 100% 2,151,383 14,840,028 25,612 176,667 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12- COMMITMENTS AND CONTINGENCIES Commitments On January 5, 2022, Funan Modern Recycling Agriculture Investment Co., Ltd. (“FMRA”) signed an agreement with AUFP to fund AUFP 115 18.09 Legal contingencies Management has identified certain legal mattes where we believe an unfavorable outcome is resonably estimated. Management believes that the total liabilities of the Company that may arise as a result of currently pending proceedings will not have a material adverse effect on the Company taken as a whole. On September 3, 2021, Anhui Daquan Construction Company ("Daquan”) filed a lawsuit against Funan Zhihua Mushroom Co., Ltd. (a merged company, “Zhihua”) on unpaid contractual price of $ 48,744 26,095 26,095 On November 10, 2022, Funan Yuanlangju Construction Co., Ltd. filed a lawsuit against AUFP for $ 60,147 50,740 On December 2, 2022, Liu Pengpeng filed a lawsuit against AUFP for $ 66,066 |
DEFERRED INCOME
DEFERRED INCOME | 6 Months Ended |
Jun. 30, 2024 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
DEFERRED INCOME | NOTE 13: DEFERRED INCOME As of June 30, 2024 and December 31, 2023, deferred income was $ 1,263,353 1,355,552 156,582 170,164 68,437 127,765 88,145 42,399 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14- INCOME TAXES The Company record no income taxes for the six months ended June 30, 2024 and for the year ended December 31, 2023. Net income and net loss were not offset among the operating subsidiaries. Net income of $ 49,649 2,234,442 Schedule of effective tax rates June 30, 2024 December 31, US federal statutory rates -21 % -21 % Tax rate difference between PRC and U.S. -4 % -4 % Effect of income tax exemption on certain income (36 %) (1.23 ) Change in valuation allowance 61 % 1.48 Effective tax rate $ - $ - The provison for income tax expense (benefit) for the six months ended June 30, 2024 and 2023 consisted of the following: Schedule of income tax expense (benefit) For the six months ended June 30, 2024 (Unaudited) June 30, (Unaudited) Income tax expense - current $ - $ - Income tax benefit -deferred (836,901 ) (231,758 ) Increase in valuation allowance 836,901 231,758 Total income tax expense $ - $ - Schedule of net deferred tax assets June 30, 2024 (Unaudited) December 31, Deferred tax asset Net operating loss $ (2,358,044 ) $ (2,531,144 ) Less: valuation allowance 2,358,044 2,531,144 Net deferred tax asset $ - $ - |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 6 Months Ended |
Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTION | NOTE 15- RELATED PARTY TRANSACTION On October 22, 2022, Mr. Zhi Yang, the Company founder and CEO subscribed 12 30,000 12,000,000 February 5, 2024 |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
EQUITY | NOTE 16- EQUITY The Company authorized 65,000,000 0.001 10,000,000 0.001 25,899,468 no |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17- SUBSEQUENT EVENTS Effective July 31, 2024, the Board of Directors of the Company appointed 4 Effective July 31, 2024, we created an Audit Committee. John Wallace, Cathy Fleming, and Mark Hemmann will serve on the Audit Committee, with Mr. Wallace serving as Chair. Effective July 31, 2024, we created a Compensation Committee. Cathy Fleming, Mark Hemman, and Neal Naito will serve on the Compsensation Committee, with Ms. Fleming serving as Chair. Effective July 31, 2024, we created a Nominating and Governance Committee. Mark Hemman, Cathy Fleming, and Neal Naito will serve on the Nominating and Governance Committee, with Mr. Hemmann serving as Chair. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of presentation and consolidation | Basis of presentation and consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. The consolidated financial statements of the Company include the financial statements of the Company and its 74.52% 25.48% 3,042,153 3,274,308 |
Interim Financial Information | Interim Financial Information The unaudited financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to interim financial information and the requirements of Form 10-Q and Rule 8-03 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosure required by accounting principles generally accepted in the United States of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. These financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2023, as not all disclosures required by generally accepted accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting policies and methods of computations as the audited financial statements as of and for the year ended December 31, 2023. |
Use of estimates | Use of estimates In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant items subject to such estimates and assumptions include allowance for doubtful accounts, advances to suppliers, valuation of inventories, useful lives of property, plant, and equipment and intangible assets. |
Cash and cash equivalent | Cash and cash equivalent Cash and cash equivalent includes demand deposits with financial institutions that are highly liquid in nature. |
Account receivable | Account receivable Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s payment history, its current creditworthiness and current economic trends. Accounts are written off after efforts at collection prove unsuccessful. As of June 30, 2024 and December 31, 2023, allowance for doubtful accounts was nil 0 0 |
Advances to suppliers, net | Advances to suppliers, net Advances to suppliers represent prepayments made to ensure continuous high-quality supplies and favorable purchase prices for premium quality. These advances are settled upon suppliers delivering raw materials to the Company when the transfer of ownership occurs. The Company review its advances to suppliers on a periodic basis and makes general and specific allowances when there is doubt as to the ability of a supplier to provide supplies to the Company or refund an advance. As of June 30, 2024 and December 31, 2023, advance to suppliers was $ 1,425,950 166,010 |
Inventory | Inventory Inventory is comprised primarily of raw materials, work-in-progress and finished goods. The value of inventory is determined using the weighted average method. The Company periodically estimates an inventory allowance for estimated unmarketable inventories when necessary. Inventory amounts are reported in net of allowances. As of June 30, 2024 and December 31, 2023, inventories were $ 2,173,954 1,651,376 |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment are stated at cost, less accumulated depreciation. Major repair and improvements that significantly extend original useful lives or improve productivity are capitalized and depreciated over the period benefited. Repair and maintenance costs are expensed as incurred. Depreciation is recorded principally by the straight-line method over the estimated useful lives of our property, plant and equipment which generally have the following ranges: buildings and improvements: 20 5 10 3 5 |
Intangible assets, net | Intangible assets, net Intangible assets with finite lives are amortized using the straight-line method over their estimated period of benefit. Evaluation of the recoverability of intangible assets is made to take into account events or circumstances that warrant revise estimates of useful lives or that indicate that impairment exists. All of the Company’s intangible assets are subject to amortization. No impairment of intangible assets has been identified as of the balance sheet date. Intangible assets consist of land use rights, patent and purchased software. Intangible assets are stated at cost less accumulated amortization. The land purchased for industrial use has the right of use for 50 50 12 5 |
Revenue recognition | Revenue recognition The Company follows Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606). FASB ASC Topic 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies each performance obligation. Revenue is generated by selling fresh mushrooms to authorized distributors and wholesalers mainly in Yangzi River Delta. Contracts were signed after the communication of the price and quantities with customers. Our sales terms generally do not allow to sell without a deposit being made and do not allow for a right of return. Usually, the deposit from the customer equals or more than the sales amount. Control of the mushrooms is transferred upon receipt or loaded in the truck of carriers at our warehouse, as determined by the specific terms of the contract. Upon transfer of control to the customer, which completes our performance obligation, revenue is recognized. We signed contracts with two distributors who purchase all the products. Sell volume to one distributor was 41% 59% |
Deferred income | Deferred income Deferred revenue consists primarily of government grants. Government grants (sometimes referred to as subsidies, subventions, etc.) are as assistance by government in the form of transfers of resources to an entity in return for past or future compliance with certain conditions relating to the operating activities of the entity. Government grants received relating to depreciable assets are recorded as deferred income and recognized in over the life of the related assets. The Company recorded income when receiving a grant which constitutes compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs. |
Research and development expenses | Research and development expenses Research and development expenses are expensed in the period when incurred. These costs primarily consist of costo f materials used, salaries paid for the Company’s development department, and fees paid to the third parties. The research and development expenses were $ 128,696 259,784 174,263 304,467 |
Noncontrolling interests | Noncontrolling interests The Company follows FASB ASC Topic 810, “ The net income (loss) attributed to NCI was separately designated in the accompanying statements of operations and comprehensive income (loss). Losses attributable to NCI in a subsidiary may exceed a non-controlling interest’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. AUFP and its subsidiaries, AUM and AUMT were 25.48% 3,042,153 3,274,308 22,976 24,608 174,845 15,492 |
Foreign currency translation and comprehensive income (loss) | Foreign currency translation and comprehensive income (loss) The accounts of the Company’s Chinese entities are maintained in Chinese Yuan (“RMB”) and the accounts of the U.S. parent company are maintained in United States dollar (“USD”). The accounts of the Chinese entities were translated into USD in accordance with FASB ASC Topic 830 “Foreign Currency Matters.” All assets and liabilities were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at historical rates and the statements of operations and cash flows are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income (loss) in accordance with FASB ASC Topic 220, “Comprehensive Income.” Gains and losses resulting from foreign currency transactions are reflected in the statements of operations. The Company follows FASB ASC Topic 220-10, “Comprehensive Income (loss).” Comprehensive income (loss) comprises net income (loss) and all changes to the statements of changes in stockholders’ equity, except those due to investments by stockholders, changes in additional paid-in capital and distributions to stockholders. The exchange rates used to translate amounts in RMB to USD for the purposes of preparing the CFS were as follows: Schedule of foreign currency exchange rates June 30, March 31, December 31, June 30, March 31, Period-end date USD: RMB exchange rate 7.2212 7.2021 7.0797 7.1632 6.8688 Average USD for the reporting period: RMB exchange rate 7.1859 7.1589 7.0750 6.9278 6.8419 |
Income taxes | Income taxes The Company uses the asset and liability method of accounting for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) tax payable or refundable for the current period and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets also include the prior year’s net operating losses carried forward. |
Contingencies | Contingencies Certain conditions may exist as of the date the consolidated financial statements (“CFS”) are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. In accordance with ASC 450, the Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s CFS. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Schedule of foreign currency exchange rates | Schedule of foreign currency exchange rates June 30, March 31, December 31, June 30, March 31, Period-end date USD: RMB exchange rate 7.2212 7.2021 7.0797 7.1632 6.8688 Average USD for the reporting period: RMB exchange rate 7.1859 7.1589 7.0750 6.9278 6.8419 |
ACCOUNT RECEIVABLE AND OTHER _2
ACCOUNT RECEIVABLE AND OTHER RECEIVABLES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Credit Loss [Abstract] | |
Schedule of foreign currency exchange rates | Schedule of foreign currency exchange rates June 30, 2024 December 31, Accounts receivable $ 61,315 $ - Other receivable 88,045 79,221 Total $ 149,360 $ 79,221 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment June 30, 2024 December 31, Buildings and improvements $ 15,986,266 $ 16,276,614 Machinery, equipment and vehicle fleet 8,707,241 8,597,430 Construction in progress 21,295 21,682 Property, plant and equipment - cost 24,714,802 24,895,726 Less: Accumulated depreciation (6,951,560 ) (6,200,757 ) Property, plant and equipment - net $ 17,763,242 $ 18,694,969 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Schedule of inventories June 30 2024 December 31, (Unaudited) 2023 Raw materials $ 2,041,615 $ 1,516,634 Finished goods - - Work in progress - compost 88,715 90,326 - growing mushrooms 43,624 44,416 Total $ 2,173,954 $ 1,651,376 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Schedule of intangible assets June 30, 2024 December 31, (Unaudited) 2023 Land use right $ 3,268,621 $ 3,327,987 Software 7,563 7,701 Patent 6,919 7,045 Subtotal 3,283,103 3,342,733 Less: Accumulated amortization (285,967 ) (256,827 ) Total $ 2,997,136 $ 3,085,906 |
Schedule of estimated future amortization expense | Schedule of estimated future amortization expense Years ending December 31, Amortization expense 2024 67,437 2025 67,437 2026 67,437 2027 67,437 2028 67,437 Thereafter 2,659,951 Total 2,997,136 |
BANK LOANS (Tables)
BANK LOANS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Bank Loans | |
Schedule of short-term bank loans | Schedule of short-term bank loans June 30, 2024 Interest Due date December 31, Interest Due date Agricultural Bank of China Funan Branch $ 788,818 4.50 % 4/06/25 $ 845,416 3.70 % 4/10/24 Anhui Funan Rural Commercial Bank 1,937,448 5.60 % 12/22/24 1,972,637 5.90 % 12/22/24 Anhui Funan Rural Commercial Bank 1,383,892 5.60 % 3/28/25 1,409,026 5.90 % 3/28/24 Anhui Funan Rural Commercial Bank 830,335 5.60 % 1/25/25 845,416 5.90 % 1/25/24 Industrial and Commercial Bank of China, Funan (1) 691,946 3.45 % 10/12/24 704,512 3.45 % 10/12/24 Industrial and Commercial Bank of China, Funan (2) 13,839 3.45 % 6/06/25 - - - Bank of China Funan Branch 1,107,113 3.60 % 3/15/25 1,127,221 3.60 % 3/15/25 Total $ 6,877,941 - - $ 6,904,228 - - (1) The loans from Bank of China were pledged by fixed assets as of June 30, 2024 and December 31, 2023, respectively. (2) The loans from Industrial and Commercial Bank of China, Funan branch were pledged by fixed assets as of June 30, 2024. |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | Schedule of accrued expenses and other current liabilities June 30, 2024 December 31, Advances from customers $ 74,262 $ 63,867 Salary payable 100,116 181,950 Tax payable 15,423 16,131 Other payable 2,346,653 2,050,824 Total $ 2,536,454 $ 2,312,772 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective tax rates | Schedule of effective tax rates June 30, 2024 December 31, US federal statutory rates -21 % -21 % Tax rate difference between PRC and U.S. -4 % -4 % Effect of income tax exemption on certain income (36 %) (1.23 ) Change in valuation allowance 61 % 1.48 Effective tax rate $ - $ - |
Schedule of income tax expense (benefit) | Schedule of income tax expense (benefit) For the six months ended June 30, 2024 (Unaudited) June 30, (Unaudited) Income tax expense - current $ - $ - Income tax benefit -deferred (836,901 ) (231,758 ) Increase in valuation allowance 836,901 231,758 Total income tax expense $ - $ - |
Schedule of net deferred tax assets | Schedule of net deferred tax assets June 30, 2024 (Unaudited) December 31, Deferred tax asset Net operating loss $ (2,358,044 ) $ (2,531,144 ) Less: valuation allowance 2,358,044 2,531,144 Net deferred tax asset $ - $ - |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - shares | 1 Months Ended | ||
Sep. 28, 2023 | Jun. 30, 2024 | Jan. 16, 2023 | |
Share exchanged | 10,432,800 | ||
AUFP [Member] | |||
Ownership interest | 74.52% | 74.52% | |
ESG [Member] | |||
Ownership interest | 100% | ||
Mr. Zhi Yang [Member] | AUFP [Member] | |||
Ownership interest | 30% | ||
Zhihan [Member] | AUFP [Member] | |||
Ownership interest | 24.52% | ||
Zhihan [Member] | ESG [Member] | |||
Ownership interest | 83.526% | ||
Mr. Chris Alonzo [Member] | AUFP [Member] | |||
Ownership interest | 10% | ||
Mr. Christopher Alonzo [Member] | ESG [Member] | |||
Ownership interest | 5.406% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 |
Period End Date [Member] | |||||
Intra-Entity Foreign Currency Balance [Line Items] | |||||
Foreign currency exchange rate, translation | 7.2212 | 7.2021 | 7.0797 | 7.1632 | 6.8688 |
Average USD For The Reporting Period [Member] | |||||
Intra-Entity Foreign Currency Balance [Line Items] | |||||
Foreign currency exchange rate, translation | 7.1859 | 7.1589 | 7.0750 | 6.9278 | 6.8419 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Sep. 28, 2023 | |
Property, Plant and Equipment [Line Items] | ||||||
Noncontrolling interest | $ 3,042,153 | $ 3,042,153 | $ 3,274,308 | |||
Allowance for doubtful accounts | 0 | 0 | 0 | |||
Advances to Affiliate | 1,425,950 | 1,425,950 | 166,010 | |||
Inventory | 2,173,954 | 2,173,954 | 1,651,376 | |||
Research and development expenses | 128,696 | $ 174,263 | 259,784 | $ 304,467 | ||
Loss attributable to noncontrolling interest | 22,976 | 24,608 | (174,845) | (15,492) | ||
Loss attributable to noncontrolling interest | $ (22,976) | $ (24,608) | $ 174,845 | $ 15,492 | ||
Revenue Benchmark [Member] | Distributor One [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Concentration of credit risk | 41% | 41% | ||||
Revenue Benchmark [Member] | Distributor Two [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Concentration of credit risk | 59% | 59% | ||||
Land Purchased [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Intangible asset, useful life | 50 years | 50 years | ||||
Use Rights [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Intangible asset, useful life | 50 years | 50 years | ||||
Patents [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Intangible asset, useful life | 12 years | 12 years | ||||
Computer Software, Intangible Asset [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Intangible asset, useful life | 5 years | 5 years | ||||
Building and Building Improvements [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property plant and equipment, useful life | 20 years | 20 years | ||||
Machinery and Equipment [Member] | Minimum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property plant and equipment, useful life | 5 years | 5 years | ||||
Machinery and Equipment [Member] | Maximum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property plant and equipment, useful life | 10 years | 10 years | ||||
Office Equipment [Member] | Minimum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property plant and equipment, useful life | 3 years | 3 years | ||||
Office Equipment [Member] | Maximum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Property plant and equipment, useful life | 5 years | 5 years | ||||
AUFP [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Ownership percentage | 74.52% | 74.52% | 74.52% | |||
Noncontrolling interest | $ 3,042,153 | $ 3,042,153 | 3,274,308 | |||
AUM and AUMT [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Noncontrolling interest | $ 3,042,153 | $ 3,042,153 | $ 3,274,308 | |||
Subsidiaries in China [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Ownership percentage | 74.52% | 74.52% | ||||
AUFP [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Subsidiary ownership percentage noncontrolling owner | 25.48% | 25.48% | ||||
AUM and AUMT [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Subsidiary ownership percentage noncontrolling owner | 25.48% | 25.48% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ 1,731,131 | $ 1,224,811 |
ACCOUNT RECEIVABLE AND OTHER _3
ACCOUNT RECEIVABLE AND OTHER RECEIVABLES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Credit Loss [Abstract] | ||
Accounts receivable | $ 61,315 | |
Other receivable | 88,045 | 79,221 |
Total | $ 149,360 | $ 79,221 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - cost | $ 24,714,802 | $ 24,895,726 |
Less: Accumulated depreciation | (6,951,560) | (6,200,757) |
Property, plant and equipment - net | 17,763,242 | 18,694,969 |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - cost | 15,986,266 | 16,276,614 |
Machinery Equipment and Vehicle Fleet [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - cost | 8,707,241 | 8,597,430 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment - cost | $ 21,295 | $ 21,682 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 433,391 | $ 395,414 | $ 867,378 | $ 705,489 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,041,615 | $ 1,516,634 |
Finished goods | ||
Work in progress - compost | 88,715 | 90,326 |
- growing mushrooms | 43,624 | 44,416 |
Total | $ 2,173,954 | $ 1,651,376 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | $ 3,283,103 | $ 3,342,733 |
Less: Accumulated amortization | (285,967) | (256,827) |
Total | 2,997,136 | 3,085,906 |
Land Use Right [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | 3,268,621 | 3,327,987 |
Computer Software, Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | 7,563 | 7,701 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | $ 6,919 | $ 7,045 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) | Jun. 30, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 67,437 |
2025 | 67,437 |
2026 | 67,437 |
2027 | 67,437 |
2028 | 67,437 |
Thereafter | 2,659,951 |
Total | $ 2,997,136 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expenses | $ 16,894 | $ 17,368 | $ 33,911 | $ 35,174 |
BANK LOANS (Details)
BANK LOANS (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | ||
Short-Term Debt [Line Items] | |||
Short-term bank loans | $ 6,877,941 | $ 6,904,228 | |
Agricultural Bank of China Funan Branch [Member] | |||
Short-Term Debt [Line Items] | |||
Short-term bank loans | $ 788,818 | $ 845,416 | |
Interest rate | 4.50% | 3.70% | |
Due date | Apr. 06, 2025 | Apr. 10, 2024 | |
Anhui Funan Rural Commercial Bank [Member] | |||
Short-Term Debt [Line Items] | |||
Short-term bank loans | $ 1,937,448 | $ 1,972,637 | |
Interest rate | 5.60% | 5.90% | |
Due date | Dec. 22, 2024 | Dec. 22, 2024 | |
Anhui Funan Rural Commercial Bank One [Member] | |||
Short-Term Debt [Line Items] | |||
Short-term bank loans | $ 1,383,892 | $ 1,409,026 | |
Interest rate | 5.60% | 5.90% | |
Due date | Mar. 28, 2025 | Mar. 28, 2024 | |
Anhui Funan Rural Commercial Bank Two [Member] | |||
Short-Term Debt [Line Items] | |||
Short-term bank loans | $ 830,335 | $ 845,416 | |
Interest rate | 5.60% | 5.90% | |
Due date | Jan. 25, 2025 | Jan. 25, 2024 | |
Industrial and Commercial Bank of China, Funan [Member] | |||
Short-Term Debt [Line Items] | |||
Short-term bank loans | [1] | $ 691,946 | $ 704,512 |
Interest rate | [1] | 3.45% | 3.45% |
Due date | [1] | Oct. 12, 2024 | Oct. 12, 2024 |
Industrial And Commercial Bank Of China Funan One [Member] | |||
Short-Term Debt [Line Items] | |||
Short-term bank loans | [2] | $ 13,839 | |
Interest rate | [2] | 3.45% | |
Due date | [2] | Jun. 06, 2025 | |
Bank of China Funan Branch [Member] | |||
Short-Term Debt [Line Items] | |||
Short-term bank loans | $ 1,107,113 | $ 1,127,221 | |
Interest rate | 3.60% | 3.60% | |
Due date | Mar. 15, 2025 | Mar. 15, 2025 | |
[1]The loans from Bank of China were pledged by fixed assets as of June 30, 2024 and December 31, 2023, respectively.[2]The loans from Industrial and Commercial Bank of China, Funan branch were pledged by fixed assets as of June 30, 2024. |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Advances from customers | $ 74,262 | $ 63,867 |
Salary payable | 100,116 | 181,950 |
Tax payable | 15,423 | 16,131 |
Other payable | 2,346,653 | 2,050,824 |
Total | $ 2,536,454 | $ 2,312,772 |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details Narrative) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Short-Term Debt [Line Items] | ||
Other payable | $ 2,346,653 | $ 2,050,824 |
Funan Agricultural Investment Co.Ltd [Member] | ||
Short-Term Debt [Line Items] | ||
Other payable | 276,778 | 281,805 |
Funan Small Business Financing Service Center [Member] | ||
Short-Term Debt [Line Items] | ||
Other payable | $ 1,383,891 | $ 1,409,026 |
VALUE ADDED TAX RECEIVABLE (Det
VALUE ADDED TAX RECEIVABLE (Details Narrative) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Value Added Tax Receivable | ||
Value added tax receivable | $ 2,267,926 | $ 2,211,980 |
ASSET ACQUISITION (Details Narr
ASSET ACQUISITION (Details Narrative) | 6 Months Ended | |
Jun. 30, 2024 USD ($) | Jun. 30, 2024 CNY (¥) | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | ||
Equity instrument consideration, rate | 100% | 100% |
Payment to shareholders | $ 2,151,383 | ¥ 14,840,028 |
Monthly payment | $ 25,612 | ¥ 176,667 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) ¥ in Thousands | Dec. 02, 2022 USD ($) | Nov. 10, 2022 USD ($) | Sep. 03, 2021 USD ($) | Jan. 05, 2022 USD ($) | Jan. 05, 2022 CNY (¥) |
Zhihua [Member] | |||||
Schedule of Investments [Line Items] | |||||
Unpaid contractual price | $ 48,744 | ||||
Loss contingency, damages value | 26,095 | ||||
Loss contingency, damages paid, value | $ 26,095 | ||||
AUFP [Member] | |||||
Schedule of Investments [Line Items] | |||||
Loss contingency, damages paid, value | $ 50,740 | ||||
Loss contingency lawsuit filing | $ 66,066 | $ 60,147 | |||
AUFP [Member] | |||||
Schedule of Investments [Line Items] | |||||
Principal amount | $ 115,000,000 | ¥ 18,090 |
DEFERRED INCOME (Details Narrat
DEFERRED INCOME (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Deferred income | $ 1,263,353 | $ 1,355,552 | |
Government Grants [Member] | |||
Deferred income, revenue recognized | 156,582 | $ 170,164 | |
Asset Based Grants [Member] | |||
Deferred income, revenue recognized | 68,437 | 127,765 | |
Income Based Grants [Member] | |||
Deferred income, revenue recognized | $ 88,145 | $ 42,399 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
US federal statutory rates | (21.00%) | (21.00%) |
Tax rate difference between PRC and U.S. | (4.00%) | (4.00%) |
Effect of income tax exemption on certain income | (36.00%) | (1.23%) |
Change in valuation allowance | 61% | 1.48% |
Effective tax rate |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense - current | ||||
Income tax benefit -deferred | (836,901) | (231,758) | ||
Increase in valuation allowance | 836,901 | 231,758 | ||
Total income tax expense |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 |
Income Tax Disclosure [Abstract] | ||
Net operating loss | $ (2,358,044) | $ (2,531,144) |
Less: valuation allowance | 2,358,044 | 2,531,144 |
Net deferred tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax | $ 49,649 | $ 2,234,442 |
RELATED PARTY TRANSACTION (Deta
RELATED PARTY TRANSACTION (Details Narrative) - Mr Zhi Yang [Member] | 1 Months Ended |
Oct. 22, 2022 USD ($) shares | |
Related Party Transaction [Line Items] | |
Common Stock, Shares Subscribed but Unissued | 12,000,000 |
Stock Repurchased and Retired During Period, Value | $ | $ 30,000 |
Stock Repurchased and Retired During Period, Shares | 12,000,000 |
Date of payment | Feb. 05, 2024 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Equity [Abstract] | ||
Common stock, shares authorized | 65,000,000 | 65,000,000 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares issued | 25,899,468 | 25,899,468 |
Common stock, shares outstanding | 25,899,468 | 25,899,468 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 1 Months Ended |
Jul. 31, 2024 Integer | |
Subsequent Events [Abstract] | |
Number of directors | 4 |