Cover
Cover | 6 Months Ended |
Jun. 30, 2024 | |
Cover [Abstract] | |
Document Type | S-1 |
Amendment Flag | false |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2024 |
Entity Registrant Name | ESG INC. |
Entity Central Index Key | 0001883835 |
Entity Primary SIC Number | 2836 |
Entity Tax Identification Number | 87-1918342 |
Entity Incorporation, State or Country Code | NV |
Entity Address, Address Line One | 523 School House Road |
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 Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
CONSOLIDATED BALANCE SHEET (Una
CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets | |||
Cash and cash equivalent | $ 135,223 | $ 342,342 | $ 137,610 |
Restricted cash | 69,011 | ||
Accounts receivable and other receivables | 149,360 | 79,221 | 117,470 |
Advance to suppliers | 1,425,950 | 166,010 | 107,863 |
Advance to suppliers – related party | 9,133 | ||
Inventories | 2,173,954 | 1,651,376 | 1,127,678 |
Total Current Assets | 3,884,487 | 2,238,949 | 1,568,765 |
Property, plant and equipment, net | 17,763,242 | 18,694,969 | 20,771,324 |
Intangible assets, net | 2,997,136 | 3,085,906 | 3,245,684 |
Value added tax receivable | 2,267,926 | 2,211,980 | 2,240,487 |
Note receivable | 41,848 | 58,858 | |
Total Non-current Assets | 23,028,304 | 24,034,703 | 26,316,353 |
Total Assets | 26,912,791 | 26,273,652 | 27,885,118 |
Current Liabilities | |||
Short-term bank loans | 6,877,941 | 6,904,228 | 7,248,583 |
Account payable | 3,012,362 | 1,450,405 | 1,233,115 |
Payable to related party | 30,000 | ||
Accrued expenses and other current liabilities | 2,536,454 | 2,312,772 | 2,803,079 |
Deferred revenue | 1,263,353 | 1,355,552 | 1,568,398 |
Total Current liabilities | 13,690,110 | 12,052,957 | 12,853,175 |
Long-term payable | 1,331,190 | 1,423,116 | 1,464,214 |
Total Non-current liabilities | 1,331,190 | 1,423,116 | 1,464,214 |
Total Liabilities | 15,021,300 | 13,476,073 | 14,317,389 |
Commitments and Contingencies | |||
Shareholders’ Equity (Deficit) | |||
Common stock, $0.001 par value, 65,000,000 authorized, 25,899,468 issued and outstanding as of December 31,2023 and 2022. | 25,900 | 25,900 | 25,900 |
Additional paid in capital | 11,152,388 | 11,152,388 | 11,152,388 |
Accumulated comprehensive income (loss) | (597,819) | (430,206) | (148,590) |
Accumulated deficit | (1,731,131) | (1,224,811) | (900,098) |
Total Company stockholders’ Equity | 8,849,338 | 9,523,271 | 10,129,600 |
Noncontrolling interest | 3,042,153 | 3,274,308 | 3,438,129 |
Total Equity | 11,891,491 | 12,797,579 | 13,567,729 |
Total Liabilities and Stockholders’ Equity | $ 26,912,791 | $ 26,273,652 | $ 27,885,118 |
CONSOLIDATED BALANCE SHEET (U_2
CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | |||
Common stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 65,000,000 | 65,000,000 | 65,000,000 |
Common stock, shares issued | 25,899,468 | 25,899,468 | 25,899,468 |
Common stock, shares outstanding | 25,899,468 | 25,899,468 | 25,899,468 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||||||
Revenues | $ 2,509,781 | $ 3,632,544 | $ 4,888,062 | $ 5,440,863 | $ 7,452,129 | $ 7,254,646 |
Cost of goods sold | 2,077,594 | 2,929,277 | 4,546,508 | 4,394,606 | 5,697,351 | 6,815,844 |
Gross profit | 432,187 | 703,267 | 341,554 | 1,046,257 | 1,754,778 | 438,802 |
Operating expenses | ||||||
Research and development cost | 128,696 | 174,263 | 259,784 | 304,467 | 609,742 | 1,013,665 |
Selling expense | 2,285 | 377 | 2,484 | 600 | 2,358 | 25,710 |
General and administrative expense | 145,305 | 323,177 | 463,422 | 596,318 | 1,352,391 | 555,079 |
Total operating expenses | 1,964,491 | 1,594,454 | ||||
Loss from operations | 155,901 | 205,450 | (384,136) | 144,872 | (209,713) | (1,155,652) |
Non-operating income (expense) | ||||||
Interest expense | (132,118) | (199,973) | (281,605) | (349,687) | (413,165) | (616,069) |
Other Income | 80,540 | 75,684 | (15,424) | 103,528 | 230,635 | 748,596 |
Total non-operating income (expenses), net | (182,530) | 132,527 | ||||
Loss before income taxes | 104,323 | 81,161 | (681,165) | (101,287) | (392,243) | (1,023,125) |
Income taxes | ||||||
Net loss | 104,323 | 81,161 | (681,165) | (101,287) | (392,243) | (1,023,125) |
Less: loss attributable to noncontrolling interest | 22,976 | 24,608 | (174,845) | (15,492) | (67,530) | (250,234) |
Net loss to ESG Inc. | 81,347 | 56,553 | (506,320) | (85,795) | (324,713) | (772,891) |
Other comprehensive item | ||||||
Foreign currency translation gain (loss) attributable to the Company | (8,033) | (413,983) | (167,613) | (370,924) | (281,616) | (1,267,833) |
Foreign currency translation gain (loss) attributable to noncontrolling interest | (2,746) | (141,551) | (57,308) | (126,828) | (96,291) | (433,499) |
Comprehensive loss attributable to noncontrolling interest | 20,230 | (116,943) | (232,155) | (142,320) | (163,821) | (683,733) |
Comprehensive loss attributable to the Company | $ 73,314 | $ (357,430) | $ (673,933) | $ (456,719) | $ (606,329) | $ (2,040,724) |
Net Loss Per Share: Basic | $ 0 | $ (0.01) | $ (0.03) | $ (0.02) | $ (0.02) | $ (0.08) |
Net Loss Per Share: Diluted | $ 0 | $ (0.01) | $ (0.03) | $ (0.02) | $ (0.02) | $ (0.08) |
Weighted Average Number of Shares Outstanding: Basic | 25,899,468 | 25,899,468 | 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 | 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, 2021 | $ 25,789 | $ 11,152,388 | $ (127,207) | $ 1,119,243 | $ 12,170,213 | $ 4,121,862 | $ 16,292,075 |
Beginning balance, shares at Dec. 31, 2021 | 25,788,356 | ||||||
Shares issued at 0.001 par value | $ 111 | 111 | 111 | ||||
Shares issued at 0.001 par value, shares | 111,112 | ||||||
Net loss | (772,891) | (772,891) | (250,234) | (1,023,125) | |||
Foreign currency translation adjustment | (1,267,833) | (1,267,833) | (433,499) | (1,701,332) | |||
Ending balance, value at Dec. 31, 2022 | $ 25,900 | 11,152,388 | (900,098) | (148,590) | 10,129,600 | 3,438,129 | 13,567,729 |
Ending balance, shares at Dec. 31, 2022 | 25,899,468 | ||||||
Net loss | (142,348) | (142,348) | (40,100) | (182,448) | |||
Foreign currency translation adjustment | 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 | ||||||
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 | (324,713) | (324,713) | (67,530) | (392,243) | |||
Foreign currency translation adjustment | (281,616) | (281,616) | (96,291) | (377,907) | |||
Ending 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 |
Ending balance, shares at Dec. 31, 2023 | 25,899,468 | ||||||
Beginning 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 |
Beginning balance, shares at Mar. 31, 2023 | 25,899,468 | ||||||
Net loss | 56,553 | 56,553 | 24,608 | 81,161 | |||
Foreign currency translation adjustment | (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 | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||||
Net loss | $ (681,165) | $ (101,287) | $ (392,243) | $ (1,023,125) |
Adjustments to reconcile loss to net cash used in operating activities: | ||||
Depreciation and amortization | 901,289 | 740,663 | 1,456,990 | 1,686,537 |
Changes in assets and liabilities: | ||||
Accounts receivable and other receivable | (70,139) | (268,142) | 38,249 | (70,635) |
Advance to suppliers | (1,259,940) | (424,335) | (49,014) | (208,812) |
Inventory | (522,578) | 448,821 | (523,698) | (379,506) |
Value added tax receivable | (55,946) | 84,612 | 28,507 | 110,372 |
Note receivable | 41,848 | 2,179 | 17,010 | |
Accounts payable | 1,561,957 | (65,750) | ||
Payable to related party | (30,000) | 8,689 | ||
Accounts payable | 223,682 | 176,975 | 217,287 | 104,118 |
Other payable | (460,307) | (164,667) | ||
Deferred revenue | (92,199) | (175,244) | (212,847) | 64,219 |
Net cash provided by operating activities | 16,808 | 427,181 | 119,935 | 118,501 |
Cash flows from investing activities: | ||||
Acquisition of fixed assets | (264,441) | (63,198) | ||
Net cash used in investing activities | (264,441) | (63,198) | ||
Cash flows from financing activities: | ||||
Proceeds from loans | 41,517 | 422,708 | 12,766,084 | |
Payment of loans payable | (98,370) | (767,062) | (12,914,527) | |
Net cash used in financing activities | (56,854) | (344,354) | (148,443) | |
Effect of exchange rate changes on cash | 97,368 | (419,605) | 360,141 | 100,716 |
Net increase (decrease) in cash | (207,118) | 7,576 | 135,721 | 7,576 |
Cash, beginning of year | 342,342 | 206,621 | 206,621 | 199,045 |
Cash, end of year | 135,223 | 206,621 | 342,342 | 206,621 |
Supplemental disclosures of cash flow information: | ||||
Cash paid for interest | (281,605) | (349,687) | ||
Cash paid for income tax | ||||
Cash paid for interest | 413,165 | 616,069 | ||
Supplemental disclosures of non-cash investing and financing activities: | ||||
Assets acquisition by assuming debt | 1,499,273 | |||
Transfer of prepaid expenditure to fixed assets | $ 442,272 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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. | 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 engaged in food production and distribution through our subsidiaries. ESG Inc. (“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% of ownership on January 16, 2023. ESG, ESG China Limited and Hainan ESG have no operations or transactions. 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 of ESG shares. Following this transaction, AUFP became a 74.52% subsidiary of ESG through Hainan ESG. Prior to the share exchange, Mr. Zhi Yang owned 30% 24.52% 10% 74.52% 83.526% 5.406% 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. 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. The Board of Directors of the Company voted to change the Company’s fiscal year end to December 31st in order to align it with AUFP. On November 9, 2023, the change to the fiscal year end on August 31, 2023 was filed. On November 22, 2023, Effective November 27, 2023, we filed Form Articles of Merger (the “Articles of Merger”) with the Secretary of the state of Nevada to change our name Plasma Innovative Inc. to ESG Inc. The financial statements of Plasma Innovative Inc., now ESG Inc. were restated on fiscal year end of December 31 for the recapitalization. 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 | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 cost of 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. | 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% 3,274,308 3,438,129 The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. 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, cash equivalent and restricted cash Cash and cash equivalent includes demand deposits with financial institutions that are highly liquid in nature. Restricted cash includes any cash that is legally restricted as to withdrawal or usage. 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 December 31, 2023 and 2022, 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 December 31, 2023 and 2022, advance to suppliers was $ 166,010 $107,863 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 December 31, 2023 and 2022, inventories were $ 1,651,376 1,127,678 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. 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. Noncontrolling Interests The Company follows FASB ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCI (previously referred to as minority interests) be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to non-controlling interests even when such allocation might result in a deficit balance. 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% 3,274,308 3,438,129 67,530 250,234 Concentration of credit risk The Company maintains cash in accounts with state-owned banks within the PRC. Cash in state-owned banks less than $ 70,451 500,000 317,947 132,273 The Company signed long-term contracts to sell mushroom to two distributors who accounted for 43% 21% 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 December 31, 2023 2022 Period-end date USD: RMB exchange rate 7.0971 6.8979 Average USD for the reporting period: RMB exchange rate 7.0750 6.7366 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. The Company accounts for income for income taxes in accordance with ASC 740, Income Taxes. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net effects of temporary difference between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or not be deductible in the future. 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 | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 revenues and decrease unit cost. | 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. For the years ended December 31, 2023 and 2022, the Company had a net loss of approximately $ 392,243 1,023,125 1,119,457 Historically, we have funded our operations primarily through our sale of fresh mushrooms and borrowings. Currently, all the loans are short-term borrowings. Management is working to increase long-term loans and equity investment in order to improve our capital structure. However, such additional cash resources may not be available to us on desirable terms, or at all, if and when needed by us. To enhance our ability to continue to operate, we are dedicating resources to generate recurring revenues and sustainable operating cash flows. On one side, we improved efficiency with current facilities, the revenue reached $7.45 7,452,129 7,254,646 18.09 10 |
ACCOUNT RECEIVABLE AND OTHER RE
ACCOUNT RECEIVABLE AND OTHER RECEIVABLES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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, 2023 Accounts receivable $ 61,315 $ - Other receivable 88,045 79,221 Total $ 149,360 $ 79,221 | NOTE 6: ACCOUNT RECEIVABLE AND OTHER RECEIVABLES Account receivable and other receivable consisted of the following: Schedule of accounts receivable December 31, 2023 2022 Accounts receivable $ - $ 23,911 Other receivable 79,221 93,559 Total $ 79,221 $ 117,470 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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, 2023 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 | NOTE 5 – PROPERTY, PLANT AND EQUIPMENT The following table summarizes our property, plant and equipment: Schedule of property and equipment December 31, 2023 2022 Buildings and improvements $ 16,276,614 $ 16,406,932 Machinery, equipment and vehicle fleet 8,597,430 8,739,192 Construction in progress 21,682 438,208 Property, plant and equipment - cost 24,895,726 25,584,332 Less: Accumulated depreciation (6,200,757 ) (4,813,008 ) Property, plant and equipment - net $ 18,694,969 $ 20,771,324 Construction in progress was $ 21,682 438,208 416,256 Depreciation expense was $ 1,388,096 1,613,923 |
INVENTORIES
INVENTORIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | ||
INVENTORIES | NOTE 6: INVENTORIES Inventories consisted of the following: Schedule of inventories June 30 2024 December 31, 2023 (Unaudited) 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 | NOTE 7: INVENTORIES Inventories consisted of the following: Schedule of inventories December 31, 2023 2022 Raw materials 1,516,634 867,543 Finished goods - 34,013 Work in progress - compost 90,326 67,727 - growing mushrooms 44,416 158,395 Total 1,651,376 1,127,678 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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, 2023 (Unaudited) 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 | NOTE 8: 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 December 31, 2022 2021 Land use right $ 3,327,987 $ 3,424,094 Software 7,701 7,923 Patent 7,045 7,249 Subtotal 3,342,733 3,439,266 Less: Accumulated amortization (256,827 ) (193,582 ) Total $ 3,085,906 $ 3,245,684 Estimated future amortization expense is as follows as of December 31, 2023: Schedule of estimated future amortization expense Years ending December 31, Amortization expense 2024 $ 68,679 2025 68,679 2026 68,679 2027 68,679 2028 68,679 Thereafter 2,742,511 Total $ 3,085,906 Amortization expenses for the years ended December 31, 2023 and 2022 were $ 68,894 72,614 |
BANK LOANS
BANK LOANS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 % 10/12/24 704,515 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. | NOTE 9: BANK LOANS Short-term bank loans consisted of the following: Schedule of short-term bank loans December 31, 2023 Interest rate Due date 2022 Interest rate Due date Agricultural Bank of China Funan Branch 845,416 3.70 % 4/10/24 869,830 3.90 % 4/11/23 Anhui Funan Rural Commercial Bank (1) 1,972,637 5.90 % 12/22/24 2,029,603 5.90 % 12/23/23 Anhui Funan Rural Commercial Bank 1,409,026 5.90 % 3/28/24 1,449,717 7.48 % 3/29/23 Anhui Funan Rural Commercial Bank 845,416 5.90 % 1/25/25 869,830 5.9 % 1/25/23 Funan Yinghuai Rural Commercial Bank (2) - - - 869,830 5.20 % 6/15/23 Industrial and Commercial Bank of China, Funan (3) 704,513 3.45 % 10/12/24 - - - Bank of China Funan Branch (4) 1,127,221 3.60 % 3/15/25 1,159,773 3.85 % 3/15/23 Total 6,909,229 - - 7,248,583 - - (1) The loan from Anhui Funan Rural Commercial Bank had an initial interest rate of 7.58% from December 23, 2022 to March 15, 2023. The interest rate was adjusted to 5.90% from March 16, 2023 to December 23, 2023. (2) $869,830 of loan from Funan Yinghuai Rural Commercial Bank was paid off on June 15, 2023. (3) $704,513 of loans from Industrial and Commercial Bank of China, Funan branch were pledged by fixed assets as of December 31, 2023. (4) $1,127,221and $1,159,773 of loans from Bank of China were pledged by fixed assets as of December 31, 2023 and 2022, respectively. As of the date of these consolidated financial statements is issued, all the outstanding loans as of December 31, 2023 have been renewed. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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, 2023 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 | NOTE 10: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: Schedule of accrued expenses and other current liabilities December 31, 2,023 2,022 Advances from customers $ 63,867 $ 48,646 Salary payable 181,950 142,737 Tax payable 16,132 18,527 Other payable 2,050,824 2,571,858 Total $ 2,312,772 $ 2,781,768 Other payable was primarily comprised of loans from non-bank institution which consists of $ 281,805 1,409,026 |
VALUE ADDED TAX RECEIVABLE
VALUE ADDED TAX RECEIVABLE | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 | NOTE 11: 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 December 31, 2023 and 2022, VAT input was $ 2,211,980 2,240,487 |
ASSET ACQUISITION
ASSET ACQUISITION | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 | NOTE 12: 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 Following the guidance of ASC 805, we performed the screen test to evaluate whether the acquired set is a business or a group of assets. The group of assets was buildings and equipment related to growing mushrooms and didn’t include an input and a substantive process that together significantly contribute to the ability to create outputs because the target company had no employees and no operations. The transaction was accounted for as an asset acquisition in accordance with ASC 805 -50. The Company calculated the present value of the debt assumed at a compound monthly interest rate of 1% 1,464,214 1,464,214 On April 30, 2023, the owner of Target Company and AUM agreed that the payment of consideration will begin on the production of growing rooms on January 1, 2024. AUM paid an expense of $ 63,878 41,848 58,848 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 reasonably 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 | NOTE 13: 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 The Company is involved in some legal proceedings, which involve disputes over contracts and do not relate to any governmental agency or regulatory inquiries. Management has identified certain legal matters where we believe an unfavorable outcome is reasonably 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 | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 | NOTE 15: DEFERRED INCOME As of December 31, 2023 and 2022, deferred income was $ 1,355,552 1,568,398 286,095 696,716 232,142 53,953 169,238 527,478 |
INCOME TAXES
INCOME TAXES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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, 2023 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 provision for income tax expense (benefit) for the months ended June 30, 2024 and 2023 consisted of the following: Schedule of income tax expense (benefit) For the six month ended June 30, 2024 For the six month ended June 30, 2023 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 December 31, 2023 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 $ - $ - | NOTE 16: INCOME TAXES The company is subject to income taxes on an entity basis on income derived from the location in which each entity is domiciled. ESG Inc, ESG China Limited and Hainan ESG Tech are holding companies without operations. The Company’s U.S. parent company is subject to U.S. income tax rate of 21% 193,010 65,877 In China the Corporate Income Tax Law generally applies an income tax rate of 25% to all enterprises. In corporate income tax article 86, “Regulations for the Implementation of the Enterprise Income Tax Law” article 27(1) of stipulate: the income of an enterprise engaged in agriculture, forestry, animal husbandry, and fishery projects may be exempted or reduced from income tax. Refer to: (1) Enterprises are exempted from enterprise income tax on income derived from the following items: 1. Planting of vegetables, grains, potatoes. Funan Allied Untied Farmer Products, Anhui Allied United Mushroom Technology and Anhui Allied United Mushroom are engaged in agricultural production in China, and their income tax are exempted. Net income and net loss were not offset among the operating subsidiaries. Net income of $ 2,234,442 1,570,354 558,611 392,589 There were no As of December 31, 2023 and 2022, the Company had net operating loss (“NOL”) carryforwards of $ 9,619,491 6,970,166 The following table reconciles the U.S. statutory rates to the Company’s effective tax rate for the years ended December 31, 2023 and 2022: Schedule of effective tax rates 2023 2022 US federal statutory rates (21 %) (21 %) Tax rate difference between PRC and U.S. (4 %) (4 %) Effect of income tax exemption on certain income (123 %) (41 %) Change in valuation allowance 148 % 66 % Effective tax rate $ - $ - The provision for income tax expense (benefit) for the years ended December 31, 2023 and 2022 consisted of the following: Schedule of income tax expense (benefit) 2023 2022 Income tax expense - current $ - $ - Income tax benefit -deferred (668,216 ) (673,412 ) Increase in valuation allowance 668,216 673,412 Total income tax expense $ - $ - The Company’s net deferred tax asset as of December 31, 2023 and 2022 is as follows: Schedule of net deferred tax assets 2023 2022 Deferred tax asset Net operating loss $ (2,531,144 ) $ (1,862,928 ) Less: valuation allowance 2,531,144 1,862,928 Net deferred tax asset $ - $ - |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 | NOTE 14: RELATED PARTY TRANSACTIONS In December 2022, Mr. Zhi Yang, Company founder and CEO, paid $21,311 On October 22, 2022, Mr. Zhi Yang subscribed 12 $30,000 12,000,000 February 5, 2024 AUM made advances to suppliers on behalf of Funan Zhihua Plant Nutrition Co., Ltd, whose legal representative was the CEO of the Company in 2021. The advance to supplier–related party was $0 $9,133 |
EQUITY
EQUITY | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Equity [Abstract] | ||
EQUITY | NOTE 16- EQUITY The Company authorized 65,000,000 0.001 10,000,000 0.001 25,899,468 no | NOTE 17: EQUITY The Company authorized 65,000,000 0.001 10,000,000 0.001 25,899,468 no On August 6, 2021, the Company entered into the Technology Assignment Agreement with Hanliang Shao, a director of the Company. Pursuant to the agreement, Mr. Shao conveyed to the Company all his rights, titles and interests in and to three separate technologies. In exchange, Mr. Shao will earn 4,000,000 shares of Company’s common stock upon the filing of a patent with the US Patent and Trademark Office (“USPTO”). In addition, Mr. Shao shall be entitled to receive a total of 2,000,000 additional shares of Company common stock issuable monthly over a three (3) year period beginning with the month of August 2021 (“Term”) at the rate of 55,556 shares per month, except in final month, the amount will be 55,540, provided that during the Term, the assignee does not breach the confidentiality and non-compete covenants contained in the agreement. Mr. Shao has entitled 111,112 shares of common stock at $0.001 par value under the agreement for the months of September 2021 and October 2021, which were issued in January 2022 at a value of $111. |
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 Compensation 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. |
CASH, CASH EQUIVALENT AND RESTR
CASH, CASH EQUIVALENT AND RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2023 | |
Cash and Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENT AND RESTRICTED CASH | NOTE 4 – CASH, CASH EQUIVALENT AND RESTRICTED CASH The cash and cash equivalent were $ 342,342 137,610 69,011 no |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | 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 | NOTE 14: RELATED PARTY TRANSACTIONS In December 2022, Mr. Zhi Yang, Company founder and CEO, paid $21,311 On October 22, 2022, Mr. Zhi Yang subscribed 12 $30,000 12,000,000 February 5, 2024 AUM made advances to suppliers on behalf of Funan Zhihua Plant Nutrition Co., Ltd, whose legal representative was the CEO of the Company in 2021. The advance to supplier–related party was $0 $9,133 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 | 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% 3,274,308 3,438,129 The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
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. | 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, cash equivalent and restricted cash | Cash and cash equivalent Cash and cash equivalent includes demand deposits with financial institutions that are highly liquid in nature. | Cash, cash equivalent and restricted cash Cash and cash equivalent includes demand deposits with financial institutions that are highly liquid in nature. Restricted cash includes any cash that is legally restricted as to withdrawal or usage. |
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 | 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 December 31, 2023 and 2022, 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 | 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 December 31, 2023 and 2022, advance to suppliers was $ 166,010 $107,863 |
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 | 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 December 31, 2023 and 2022, inventories were $ 1,651,376 1,127,678 |
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 | 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 | 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% | 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. |
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. | 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 cost of 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 | Noncontrolling Interests The Company follows FASB ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCI (previously referred to as minority interests) be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to non-controlling interests even when such allocation might result in a deficit balance. 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% 3,274,308 3,438,129 67,530 250,234 |
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 | 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 December 31, 2023 2022 Period-end date USD: RMB exchange rate 7.0971 6.8979 Average USD for the reporting period: RMB exchange rate 7.0750 6.7366 |
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. | 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. The Company accounts for income for income taxes in accordance with ASC 740, Income Taxes. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net effects of temporary difference between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or not be deductible in the future. |
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. | 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. |
Concentration of credit risk | Concentration of credit risk The Company maintains cash in accounts with state-owned banks within the PRC. Cash in state-owned banks less than $ 70,451 500,000 317,947 132,273 The Company signed long-term contracts to sell mushroom to two distributors who accounted for 43% 21% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 | Schedule of foreign currency exchange rates December 31, 2023 2022 Period-end date USD: RMB exchange rate 7.0971 6.8979 Average USD for the reporting period: RMB exchange rate 7.0750 6.7366 |
ACCOUNT RECEIVABLE AND OTHER _2
ACCOUNT RECEIVABLE AND OTHER RECEIVABLES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Credit Loss [Abstract] | ||
Schedule of accounts receivable | Schedule of foreign currency exchange rates June 30, 2024 December 31, 2023 Accounts receivable $ 61,315 $ - Other receivable 88,045 79,221 Total $ 149,360 $ 79,221 | Schedule of accounts receivable December 31, 2023 2022 Accounts receivable $ - $ 23,911 Other receivable 79,221 93,559 Total $ 79,221 $ 117,470 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of property and equipment | Schedule of property and equipment June 30, 2024 December 31, 2023 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 | Schedule of property and equipment December 31, 2023 2022 Buildings and improvements $ 16,276,614 $ 16,406,932 Machinery, equipment and vehicle fleet 8,597,430 8,739,192 Construction in progress 21,682 438,208 Property, plant and equipment - cost 24,895,726 25,584,332 Less: Accumulated depreciation (6,200,757 ) (4,813,008 ) Property, plant and equipment - net $ 18,694,969 $ 20,771,324 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | ||
Schedule of inventories | Schedule of inventories June 30 2024 December 31, 2023 (Unaudited) 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 | Schedule of inventories December 31, 2023 2022 Raw materials 1,516,634 867,543 Finished goods - 34,013 Work in progress - compost 90,326 67,727 - growing mushrooms 44,416 158,395 Total 1,651,376 1,127,678 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of intangible assets | Schedule of intangible assets June 30, 2024 December 31, 2023 (Unaudited) 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 intangible assets December 31, 2022 2021 Land use right $ 3,327,987 $ 3,424,094 Software 7,701 7,923 Patent 7,045 7,249 Subtotal 3,342,733 3,439,266 Less: Accumulated amortization (256,827 ) (193,582 ) Total $ 3,085,906 $ 3,245,684 |
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 | Schedule of estimated future amortization expense Years ending December 31, Amortization expense 2024 $ 68,679 2025 68,679 2026 68,679 2027 68,679 2028 68,679 Thereafter 2,742,511 Total $ 3,085,906 |
BANK LOANS (Tables)
BANK LOANS (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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 % 10/12/24 704,515 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. | Schedule of short-term bank loans December 31, 2023 Interest rate Due date 2022 Interest rate Due date Agricultural Bank of China Funan Branch 845,416 3.70 % 4/10/24 869,830 3.90 % 4/11/23 Anhui Funan Rural Commercial Bank (1) 1,972,637 5.90 % 12/22/24 2,029,603 5.90 % 12/23/23 Anhui Funan Rural Commercial Bank 1,409,026 5.90 % 3/28/24 1,449,717 7.48 % 3/29/23 Anhui Funan Rural Commercial Bank 845,416 5.90 % 1/25/25 869,830 5.9 % 1/25/23 Funan Yinghuai Rural Commercial Bank (2) - - - 869,830 5.20 % 6/15/23 Industrial and Commercial Bank of China, Funan (3) 704,513 3.45 % 10/12/24 - - - Bank of China Funan Branch (4) 1,127,221 3.60 % 3/15/25 1,159,773 3.85 % 3/15/23 Total 6,909,229 - - 7,248,583 - - (1) The loan from Anhui Funan Rural Commercial Bank had an initial interest rate of 7.58% from December 23, 2022 to March 15, 2023. The interest rate was adjusted to 5.90% from March 16, 2023 to December 23, 2023. (2) $869,830 of loan from Funan Yinghuai Rural Commercial Bank was paid off on June 15, 2023. (3) $704,513 of loans from Industrial and Commercial Bank of China, Funan branch were pledged by fixed assets as of December 31, 2023. (4) $1,127,221and $1,159,773 of loans from Bank of China were pledged by fixed assets as of December 31, 2023 and 2022, respectively. |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
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, 2023 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 | Schedule of accrued expenses and other current liabilities December 31, 2,023 2,022 Advances from customers $ 63,867 $ 48,646 Salary payable 181,950 142,737 Tax payable 16,132 18,527 Other payable 2,050,824 2,571,858 Total $ 2,312,772 $ 2,781,768 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Schedule of effective tax rates | Schedule of effective tax rates June 30, 2024 December 31, 2023 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 effective tax rates 2023 2022 US federal statutory rates (21 %) (21 %) Tax rate difference between PRC and U.S. (4 %) (4 %) Effect of income tax exemption on certain income (123 %) (41 %) Change in valuation allowance 148 % 66 % Effective tax rate $ - $ - |
Schedule of income tax expense (benefit) | Schedule of income tax expense (benefit) For the six month ended June 30, 2024 For the six month ended June 30, 2023 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 income tax expense (benefit) 2023 2022 Income tax expense - current $ - $ - Income tax benefit -deferred (668,216 ) (673,412 ) Increase in valuation allowance 668,216 673,412 Total income tax expense $ - $ - |
Schedule of net deferred tax assets | Schedule of net deferred tax assets June 30, 2024 December 31, 2023 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 $ - $ - | Schedule of net deferred tax assets 2023 2022 Deferred tax asset Net operating loss $ (2,531,144 ) $ (1,862,928 ) Less: valuation allowance 2,531,144 1,862,928 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 | Dec. 31, 2023 | Jan. 16, 2023 | |
Share exchanged | 10,432,800 | |||
Share exchange agreement description | 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 of ESG shares. Following this transaction, AUFP became a 74.52% subsidiary of ESG through Hainan ESG. | |||
AUFP [Member] | ||||
Ownership percentage | 74.52% | 74.52% | 74.52% | |
ESG [Member] | ||||
Ownership percentage | 100% | |||
Mr. Zhi Yang [Member] | AUFP [Member] | ||||
Ownership percentage | 30% | 30% | ||
Zhihan [Member] | AUFP [Member] | ||||
Ownership percentage | 24.52% | 24.52% | ||
Zhihan [Member] | ESG [Member] | ||||
Ownership percentage | 83.526% | 83.526% | ||
Mr. Chris Alonzo [Member] | AUFP [Member] | ||||
Ownership percentage | 10% | 10% | ||
Mr. Christopher Alonzo [Member] | ESG [Member] | ||||
Ownership percentage | 5.406% | 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 | Dec. 31, 2022 |
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 | 6.8979 |
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 | 6.7366 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2023 CNY (¥) | Sep. 28, 2023 | |
Property, Plant and Equipment [Line Items] | ||||||||
Noncontrolling interest | $ 3,042,153 | $ 3,042,153 | $ 3,274,308 | $ 3,438,129 | ||||
Allowance for doubtful accounts | 0 | 0 | 0 | 0 | ||||
Advances to Affiliate | 1,425,950 | 1,425,950 | 166,010 | 107,863 | ||||
Inventory | 2,173,954 | 2,173,954 | 1,651,376 | 1,127,678 | ||||
Research and development expenses | 128,696 | $ 174,263 | 259,784 | $ 304,467 | 609,742 | 1,013,665 | ||
Loss attributable to noncontrolling interest | $ (22,976) | $ (24,608) | $ 174,845 | $ 15,492 | 67,530 | 250,234 | ||
Cash | 70,451 | ¥ 500,000 | ||||||
Cash equivalents | $ 317,947 | 132,273 | ||||||
Revenue Benchmark [Member] | Distributor One [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Concentration of credit risk | 41% | 41% | 43% | |||||
Revenue Benchmark [Member] | Distributor Two [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Concentration of credit risk | 59% | 59% | 21% | |||||
Land Purchased [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Intangible asset, useful life | 50 years | 50 years | 50 years | 50 years | ||||
Use Rights [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Intangible asset, useful life | 50 years | 50 years | 50 years | 50 years | ||||
Patents [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Intangible asset, useful life | 12 years | 12 years | 12 years | 12 years | ||||
Computer Software, Intangible Asset [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Intangible asset, useful life | 5 years | 5 years | 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 | 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 | 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 | 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 | 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 | 5 years | 5 years | ||||
AUFP [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Ownership percentage | 74.52% | 74.52% | 74.52% | 74.52% | 74.52% | |||
Noncontrolling interest | $ 3,042,153 | $ 3,042,153 | $ 3,274,308 | 3,438,129 | ||||
AUM and AUMT [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Noncontrolling interest | $ 3,042,153 | $ 3,042,153 | $ 3,274,308 | $ 3,438,129 | ||||
Subsidiaries in China [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Ownership percentage | 74.52% | 74.52% | 74.52% | 74.52% | ||||
AUFP [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Subsidiary ownership percentage noncontrolling owner | 25.48% | 25.48% | 25.48% | 25.48% | ||||
AUM and AUMT [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Subsidiary ownership percentage noncontrolling owner | 25.48% | 25.48% | 25.48% | 25.48% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jan. 05, 2022 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Investments [Line Items] | |||||||
Accumulated deficit | $ 1,731,131 | $ 1,731,131 | $ 1,224,811 | $ 1,119,457 | |||
Net loss | (104,323) | $ (81,161) | 681,165 | $ 101,287 | 392,243 | 1,023,125 | |
Revenues | $ 2,509,781 | $ 3,632,544 | $ 4,888,062 | $ 5,440,863 | $ 7,452,129 | $ 7,254,646 | |
Funan Agricultural Reclining Investment Co. Ltd [Member] | |||||||
Schedule of Investments [Line Items] | |||||||
Principal amount | $ 18,090,000 | ||||||
Debt instrument, term | 10 years |
ACCOUNT RECEIVABLE AND OTHER _3
ACCOUNT RECEIVABLE AND OTHER RECEIVABLES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Credit Loss [Abstract] | |||
Accounts receivable | $ 61,315 | $ 23,911 | |
Other receivable | 88,045 | 79,221 | 93,559 |
Total | $ 149,360 | $ 79,221 | $ 117,470 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment - cost | $ 24,714,802 | $ 24,895,726 | $ 25,584,332 |
Less: Accumulated depreciation | (6,951,560) | (6,200,757) | (4,813,008) |
Property, plant and equipment - net | 17,763,242 | 18,694,969 | 20,771,324 |
Building and Building Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment - cost | 15,986,266 | 16,276,614 | 16,406,932 |
Machinery Equipment and Vehicle Fleet [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment - cost | 8,707,241 | 8,597,430 | 8,739,192 |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment - cost | $ 21,295 | $ 21,682 | $ 438,208 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 433,391 | $ 395,414 | $ 867,378 | $ 705,489 | $ 1,613,923 | $ 1,388,096 |
Construction in progress | 21,682 | $ 438,208 | ||||
Construction in progress net | $ 416,256 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 2,041,615 | $ 1,516,634 | $ 867,543 |
Finished goods | 34,013 | ||
Work in progress - compost | 88,715 | 90,326 | 67,727 |
- growing mushrooms | 43,624 | 44,416 | 158,395 |
Total | $ 2,173,954 | $ 1,651,376 | $ 1,127,678 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | |||
Subtotal | $ 3,283,103 | $ 3,342,733 | $ 3,439,266 |
Less: Accumulated amortization | (285,967) | (256,827) | (193,582) |
Total | 2,997,136 | 3,085,906 | 3,245,684 |
Land Use Right [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Subtotal | 3,268,621 | 3,327,987 | 3,424,094 |
Computer Software, Intangible Asset [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Subtotal | 7,563 | 7,701 | 7,923 |
Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Subtotal | $ 6,919 | $ 7,045 | $ 7,249 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
2024 | $ 67,437 | $ 68,679 | |
2025 | 67,437 | 68,679 | |
2026 | 67,437 | 68,679 | |
2027 | 67,437 | 68,679 | |
2028 | 67,437 | 68,679 | |
Thereafter | 2,659,951 | 2,742,511 | |
Total | $ 2,997,136 | $ 3,085,906 | $ 3,245,684 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Amortization expenses | $ 16,894 | $ 17,368 | $ 33,911 | $ 35,174 | $ 68,894 | $ 72,614 |
BANK LOANS (Details)
BANK LOANS (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |||||
Short-Term Debt [Line Items] | |||||||
Short-term bank loans | $ 6,877,941 | $ 6,909,229 | $ 7,248,583 | ||||
Interest rate | 1% | ||||||
Agricultural Bank of China Funan Branch [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Short-term bank loans | $ 788,818 | $ 845,416 | $ 869,830 | ||||
Interest rate | 4.50% | 3.70% | 3.90% | ||||
Due date | Apr. 06, 2025 | Apr. 10, 2024 | Apr. 11, 2023 | ||||
Anhui Funan Rural Commercial Bank [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Short-term bank loans | $ 1,937,448 | $ 1,972,637 | [1] | $ 2,029,603 | [1] | ||
Interest rate | 5.60% | 5.90% | [1] | 5.90% | [1] | ||
Due date | Dec. 22, 2024 | Dec. 22, 2024 | [1] | Dec. 23, 2023 | [1] | ||
Anhui Funan Rural Commercial Bank One [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Short-term bank loans | $ 1,383,892 | $ 1,409,026 | $ 1,449,717 | ||||
Interest rate | 5.60% | 5.90% | 7.48% | ||||
Due date | Mar. 28, 2025 | Mar. 28, 2024 | Mar. 29, 2023 | ||||
Anhui Funan Rural Commercial Bank Two [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Short-term bank loans | $ 830,335 | $ 845,416 | $ 869,830 | ||||
Interest rate | 5.60% | 5.90% | 5.90% | ||||
Due date | Jan. 25, 2025 | Jan. 25, 2024 | Jan. 25, 2023 | ||||
Industrial and Commercial Bank of China, Funan [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Short-term bank loans | $ 691,946 | [2] | $ 704,513 | [3] | [3] | ||
Interest rate | [2] | 3.45% | 3.45% | [3] | |||
Due date | [2] | Oct. 12, 2024 | Oct. 12, 2024 | [3] | |||
Industrial And Commercial Bank Of China Funan One [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Short-term bank loans | [4] | $ 13,839 | |||||
Interest rate | [4] | 3.45% | |||||
Due date | [4] | Jun. 06, 2025 | |||||
Bank of China Funan Branch [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Short-term bank loans | $ 1,107,113 | $ 1,127,221 | [5] | $ 1,159,773 | [5] | ||
Interest rate | 3.60% | 3.60% | [5] | 3.85% | [5] | ||
Due date | Mar. 15, 2025 | Mar. 15, 2025 | [5] | Mar. 15, 2023 | [5] | ||
Funan Yinghuai Rural Commercial Bank [Member] | |||||||
Short-Term Debt [Line Items] | |||||||
Short-term bank loans | [6] | $ 869,830 | |||||
Interest rate | [6] | 5.20% | |||||
Due date | [6] | Jun. 15, 2023 | |||||
[1]The loan from Anhui Funan Rural Commercial Bank had an initial interest rate of 7.58% from December 23, 2022 to March 15, 2023. The interest rate was adjusted to 5.90% from March 16, 2023 to December 23, 2023.[2]The loans from Bank of China were pledged by fixed assets as of June 30, 2024 and December 31, 2023, respectively.[3]$704,513 of loans from Industrial and Commercial Bank of China, Funan branch were pledged by fixed assets as of December 31, 2023.[4]The loans from Industrial and Commercial Bank of China, Funan branch were pledged by fixed assets as of June 30, 2024.[5]$1,127,221and $1,159,773 of loans from Bank of China were pledged by fixed assets as of December 31, 2023 and 2022, respectively.[6]$869,830 of loan from Funan Yinghuai Rural Commercial Bank was paid off on June 15, 2023. |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | |||
Advances from customers | $ 74,262 | $ 63,867 | $ 48,646 |
Salary payable | 100,116 | 181,950 | 142,737 |
Tax payable | 15,423 | 16,132 | 18,527 |
Other payable | 2,346,653 | 2,050,824 | 2,571,858 |
Total | $ 2,536,454 | $ 2,312,772 | $ 2,781,768 |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details Narrative) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Short-Term Debt [Line Items] | |||
Other payable | $ 2,346,653 | $ 2,050,824 | $ 2,571,858 |
Funan Agricultural Investment Co.Ltd [Member] | |||
Short-Term Debt [Line Items] | |||
Other payable | 276,778 | 281,805 | |
Loans from non-bank institutions and payable | 281,805 | ||
Funan Small Business Financing Service Center [Member] | |||
Short-Term Debt [Line Items] | |||
Other payable | $ 1,383,891 | 1,409,026 | |
Loans from non-bank institutions and payable | $ 1,409,026 |
VALUE ADDED TAX RECEIVABLE (Det
VALUE ADDED TAX RECEIVABLE (Details Narrative) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Value Added Tax Receivable | |||
Value added tax receivable | $ 2,267,926 | $ 2,211,980 | $ 2,240,487 |
ASSET ACQUISITION (Details Narr
ASSET ACQUISITION (Details Narrative) | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2024 USD ($) | Jun. 30, 2024 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Equity instrument consideration, rate | 100% | 100% | 100% | 100% | ||
Payment to shareholders | $ 2,151,383 | ¥ 14,840,028 | $ 2,151,383 | ¥ 14,840,028 | ||
Monthly payment | $ 25,612 | ¥ 176,667 | $ 25,612 | ¥ 176,667 | ||
Monthly interest rate | 1% | 1% | ||||
Assets | $ 1,464,214 | |||||
Liability | 1,464,214 | |||||
Note receivable | $ 41,848 | $ 58,848 | ||||
Funan Zhihua Mushroom Co Ltd [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Acquisition cost | $ 63,878 |
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 | $ 18,090,000 | ¥ 115,000 |
DEFERRED INCOME (Details Narrat
DEFERRED INCOME (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Deferred income | $ 1,263,353 | $ 1,355,552 | $ 1,568,398 | |
Government Grants [Member] | ||||
Deferred income, revenue recognized | 156,582 | $ 170,164 | 286,095 | 696,716 |
Asset Based Grants [Member] | ||||
Deferred income, revenue recognized | 68,437 | 127,765 | 232,142 | 169,238 |
Income Based Grants [Member] | ||||
Deferred income, revenue recognized | $ 88,145 | $ 42,399 | $ 53,953 | $ 527,478 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
US federal statutory rates | (21.00%) | (21.00%) | (21.00%) |
Tax rate difference between PRC and U.S. | (4.00%) | (4.00%) | (4.00%) |
Effect of income tax exemption on certain income | (36.00%) | (123.00%) | (41.00%) |
Change in valuation allowance | 6,100% | 148% | 66% |
Effective tax rate |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||||||
Income tax expense - current | ||||||
Income tax benefit -deferred | (836,901) | (231,758) | (668,216) | (673,412) | ||
Increase in valuation allowance | 836,901 | 231,758 | 668,216 | 673,412 | ||
Total income tax expense |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | |||
Net operating loss | $ (2,358,044) | $ (2,531,144) | $ (1,862,928) |
Less: valuation allowance | 2,358,044 | 2,531,144 | 1,862,928 |
Net deferred tax asset | |||
Less: valuation allowance | $ (2,358,044) | $ (2,531,144) | $ (1,862,928) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income tax | $ 49,649 | $ 2,234,442 | $ 1,570,354 |
Effective income tax rate reconciliation, at federal statutory income tax rate, percent | 21% | 21% | 21% |
Tax break | $ 558,611 | $ 392,589 | |
Uncertain tax positions | 0 | 0 | |
UNITED STATES | |||
Operating loss carryforwards | 193,010 | 65,877 | |
CHINA | |||
Operating loss carryforwards | $ 9,619,491 | $ 6,970,166 |
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 | Aug. 06, 2021 | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Common stock, shares authorized | 65,000,000 | 65,000,000 | 65,000,000 | |
Common stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |
Preferred stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 | |
Common stock, shares issued | 25,899,468 | 25,899,468 | 25,899,468 | |
Common stock, shares outstanding | 25,899,468 | 25,899,468 | 25,899,468 | |
Preferred stock, shares issued | 0 | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | 0 | |
Hanliang Shao [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Technology assignment agreement description | Company entered into the Technology Assignment Agreement with Hanliang Shao, a director of the Company. Pursuant to the agreement, Mr. Shao conveyed to the Company all his rights, titles and interests in and to three separate technologies. In exchange, Mr. Shao will earn 4,000,000 shares of Company’s common stock upon the filing of a patent with the US Patent and Trademark Office (“USPTO”). In addition, Mr. Shao shall be entitled to receive a total of 2,000,000 additional shares of Company common stock issuable monthly over a three (3) year period beginning with the month of August 2021 (“Term”) at the rate of 55,556 shares per month, except in final month, the amount will be 55,540, provided that during the Term, the assignee does not breach the confidentiality and non-compete covenants contained in the agreement. Mr. Shao has entitled 111,112 shares of common stock at $0.001 par value under the agreement for the months of September 2021 and October 2021, which were issued in January 2022 at a value of $111. |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 1 Months Ended |
Jul. 31, 2024 Integer | |
Subsequent Events [Abstract] | |
Number of directors | 4 |
CASH, CASH EQUIVALENT AND RES_2
CASH, CASH EQUIVALENT AND RESTRICTED CASH (Details Narrative) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Cash and Cash Equivalents [Abstract] | |||
Cash and cash equivalent | $ 135,223 | $ 342,342 | $ 137,610 |
Restricted cash | $ 0 | $ 69,011 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Oct. 22, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||||
Operating expense | $ 1,964,491 | $ 1,594,454 | ||
Due from related party | $ 0 | $ 9,133 | ||
Mr Zhi Yang [Member] | ||||
Related Party Transaction [Line Items] | ||||
Operating expense | $ 21,311 | |||
Common stock, shares subscribed but unissued | 12,000,000 | |||
Stock paid | $ 30,000 | |||
Number of shares | 12,000,000 | |||
Date of payment | Feb. 05, 2024 |