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Liquidity, Going Concern, and Restatement | 6 Months Ended
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Jun. 30, 2025
Liquidity, Going Concern, and Restatement [Abstract] |
LIQUIDITY, GOING CONCERN, AND RESTATEMENT | 2. LIQUIDITY, GOING CONCERN, AND RESTATEMENT Liquidity and Going Concern The accompanying financial statements have been prepared in conformity with the generally accepted accounting principles in the United States of America (the “U.S. GAAP”) which contemplates continuation of the Company on a going concern basis. The going concern basis assumes that assets are realized, and liabilities are settled in the ordinary course of business at amounts disclosed in the financial statements. The Company’s ability to continue as a going concern depends upon its ability to market and sell its products to generate positive operating cash flow. For the six months ended June 30, 2025, the Company reported net loss of $3,277,023. As of June 30, 2025, the Company’s working capital deficit was $2,762,113. In addition, the Company had net cash outflows of $1,434,007 from operating activities for the six months ended June 30, 2025. These conditions give rise to substantial doubt as to whether the Company will be able to continue as a going concern. To sustain its ability to support the Company’s operating activities, the Company may have to consider supplementing its available sources of funds through the following sources:
| ● | cash generated from operations;
| ● | other available sources of financing from banks and other financial institutions in the U.S. and in Taiwan; and
| ● | financial support from the Company’s related parties and shareholders.
Management’s plan is to continue to improve operations to generate positive cash flows and raise additional capital through private or public offerings, or financial support from related parties or shareholders. If the Company is not able to generate positive operating cash flows, and raise additional capital, there is the risk that the Company may not be able to meet its short-term obligations. All of these factors raise substantial doubt about the ability of the Company to continue as a going concern. The interim condensed consolidated financial statements as of June 30, 2025, and for the three and six months ended June 30, 2025 and 2024 have been prepared on a going concern basis and do not include any adjustments to reflect the possible future effects on the recoverability and classifications of assets or the amounts and classifications of liabilities that may result from the inability of the Company to continue as a going concern. Restatement Background and Explanation The Company has restated its financial statements as of and for the year ended December 31, 2023, to correct misstatements in those prior periods related to improperly applying accounting guidance on the share-based payments, incorrectly recognizing interest expenses upon the conversion of convertible debts, and misidentifying the existence of non-controlling interest of our subsidiary. These restatements also resulted in the restatements of the relevant accounts as of and for the three and six months ended June 30, 2024. As disclosed in Note 5, the Company entered into a cooperation agreement on August 14, 2023 with Zhong Hui Lian He Ji Tuan, Ltd. (the “Zhonghui”) to acquire 20% of the ownership of certain property and a parcel of the land. According to the agreement, the Company issued 370,000 shares of its common stock as the consideration, and used $20 dollars per share to recognize the right as construction in progress on the balance sheet. At the time of preparing its 2024 financial statements, the Company reviewed the entire transaction, its relevant agreements and documentation, as well as the applicable accounting guidance. The Company applied FASB Accounting Standard Codification (“ASC”) 845 Nonmonetary Transactions to determine the fair value of the asset acquired would be more evident than the fair value of the consideration in exchange, the Company’s restricted common stocks. The real estates acquired comes with a third-party valuation of $7,400,000 per the Company’s stake, which the value of the acquired assets is guaranteed by Zhonghui. Upon further review, the Company considered ASC 718 Compensation – Stock Compensation, should have been the appropriate guidance to apply given the Company’s common stocks are listed in Nasdaq with more observable fair value (Level 1). Furthermore, at the time of issuance of these financial statements, no real estate title was transferred to the Company. As a result, the Company adjusted the carrying value of the asset and reclassified the balance to “Prepayment for asset acquisition” account to reflect the value of 370,000 shares issued at $1.87, the closing price as of the contract date. The Company also corrected the share price used to recognize stock compensation expense from $20 to $1.87 for the 29,600 shares of common stock issued on the same day to several consultants. As a result, these adjustments reduced $6,708,100 for asset recognized and $536,648 for stock-compensation expense incurred in 2023. In February 2023, the Company issued a convertible note to LIND Global Fund II, LP (Note 7). Due to misapplication of ASC 470-20 instead of ASC 815-40, the Company overstated interest expenses $1,179,669 for the year ended December 31, 2023. The overstatement is offsetting against additional paid-in capital due to the convertible note being converted to the Company’s own common stocks instead of being repaid or disposition. In November 2023, the Company and one of its subsidiaries entered into a licensing agreement with AiBtl. The Company accounted for a 100% control of AiBtl as of December 31, 2023, but later discovered that AiBtl had outstanding founder shares that were not deposited to the stock transfer agent in a timely manner. Such shares reduced the Company’s controlling interest from 100% to 69.70% as of December 31, 2023. Accordingly, the Company adjusted the relevant accounts in our consolidated financial statements. As discussed in Note 12, in July 2019 the Company issued 644,972 shares (post-split) of the Company’s common stock to four consultants for their services. Such stock-based expenses were amortized over 5 years starting from the issuance date. Per the Company’s further review, the services, along with the agreements, were completed by December 31, 2022. Pursuant to ASC 718, the costs of services should be recognized along with the period when services are received. Therefore, the Company reversed share-based compensation expenses of $451,480 and $902,960 for the years ended December 31, 2024 and 2023, respectively. The accumulated deficit as of December 31, 2022 was corrected with the Stock Subscription Receivables for $1,354,440 as a result of such adjustments. Please read the impacts of the 2023 restatement in our audited 2024 consolidated financial statements filed in our Form 10-K with the SEC on April 15, 2025. Impact of the Restatement to the June 30, 2024 interim financial statements The impact of the restatement on the balance sheets, statements of operations, and statements of cash flows as of and for the six months ended June 30, 2024 is presented below.
|  | June 30, 2024 |
Unaudited Condensed Consolidated Balance Sheets |  | As Reported |  |  | Adjustments |  |  | As Restated |
Prepaid expense and other current asset |  | $ | 100,810 |  |  | $ | 118,835 |  |  | $ | 219,645 |
Current Assets |  |  | 2,189,567 |  |  |  | 118,835 |  |  |  | 2,308,402 |
Property and equipment, net |  |  | 7,929,121 |  |  |  | (7,400,000 | ) |  |  | 529,121 |
Prepayment for asset acquisition |  |  | - |  |  |  | 691,900 |  |  |  | 691,900 |
Total Assets |  |  | 14,633,699 |  |  |  | (6,589,265 | ) |  |  | 8,044,434 |
Accrued expenses and other current liabilities |  |  | 3,961,050 |  |  |  | (329,812 | ) |  |  | 3,631,238 |
Due to related parties |  |  | 326,298 |  |  |  | (1,208 | ) |  |  | 325,090 |
Current Liabilities |  |  | 6,548,927 |  |  |  | (302,016 | ) |  |  | 6,246,911 |
Total Liabilities |  |  | 6,805,409 |  |  |  | (301,020 | ) |  |  | 6,504,389 |
Additional paid-in capital |  |  | 87,082,558 |  |  |  | (9,053,103 | ) |  |  | 78,029,455 |
Total stockholders’ equity |  |  | 8,293,455 |  |  |  | (6,507,253 | ) |  |  | 1,786,202 |
Noncontrolling interest |  |  | (465,165 | ) |  |  | 219,008 |  |  |  | (246,157 | )
Total Equity |  |  | 7,828,290 |  |  |  | (6,288,245 | ) |  |  | 1,540,045 |
Total Liabilities and Equity |  | $ | 14,633,699 |  |  | $ | (6,589,265 | ) |  | $ | 8,044,434 |
|  | Three Months Ended June 30, 2024 |
Unaudited Condensed Consolidated Statements of Operations |  | As Reported |  |  | Adjustments |  |  | As Restated |
Selling, general and administrative expenses |  | $ | 640,451 |  |  | $ | 13,332 |  |  | $ | 653,783 |
Stock based compensation |  |  | 412,741 |  |  |  | (129,866 | ) |  |  | 282,875 |
Interest expenses |  |  | (260,032 | ) |  |  | 52,953 |  |  |  | (207,079 | )
Net loss attributable to noncontrolling interests |  |  | (206,044 | ) |  |  | 100,968 |  |  |  | (105,076 | )
Net loss |  |  | (1,272,689 | ) |  |  | 225,277 |  |  |  | (1,047,412 | )
Basic and diluted net loss per common share |  | $ | (0.09 | ) |  | $ | 0.01 |  |  | $ | (0.08 | )
|  | Six Months Ended June 30, 2024 |
Unaudited Condensed Consolidated Statements of Operations |  | As Reported |  |  | Adjustments |  |  | As Restated |
Selling, general and administrative expenses |  | $ | 1,471,708 |  |  | $ | (79,439 | ) |  | $ | 1,392,269 |
Stock based compensation |  |  | 2,957,736 |  |  |  | (643,230 | ) |  |  | 2,314,506 |
Interest expenses |  |  | (944,715 | ) |  |  | 555,960 |  |  |  | (388,755 | )
Net loss attributable to noncontrolling interests |  |  | (308,087 | ) |  |  | 109,543 |  |  |  | (198,544 | )
Net loss |  |  | (5,253,708 | ) |  |  | 1,278,629 |  |  |  | (3,975,079 | )
Basic and diluted net loss per common share |  | $ | (0.47 | ) |  | $ | 0.11 |  |  | $ | (0.36 | )
|  | Six Months Ended June 30, 2024 |
Unaudited Condensed Consolidated Statements of Cash Flows |  | As Reported |  |  | Adjustments |  |  | As Restated |
Net loss |  | $ | (5,253,708 | ) |  | $ | 1,278,629 |  |  | $ | (3,975,079 | )
Stock-based compensation |  |  | 2,957,736 |  |  |  | (643,230 | ) |  |  | 2,314,506 |
Other non-cash income and expenses |  |  | 915,546 |  |  |  | (553,972 | ) |  |  | 361,574 |
Prepaid expenses and other deposits |  |  | 7,245 |  |  |  | 72,914 |  |  |  | 80,159 |
Accrued expenses and other current liabilities |  |  | 264,670 |  |  |  | (182,772 | ) |  |  | 81,898 |
Due from related parties* |  |  | (518,615 | ) |  |  | 501,614 |  |  |  | (17,001 | )
Due to related parties |  |  | 153,166 |  |  |  | (153,166 | ) |  |  | - |
Net cash used in operating activities |  |  | (1,487,258 | ) |  |  | 320,017 |  |  |  | (1,167,241 | )
Loan to related parties* |  |  | - |  |  |  | (501,614 | ) |  |  | (501,614 | )
Net cash used in investing activities* |  |  | - |  |  |  | (501,614 | ) |  |  | (501,614 | )
Due to related parties* |  |  | - |  |  |  | 151,597 |  |  |  | 151,597 |
Proceeds from short-term borrowings* |  |  | - |  |  |  | 30,000 |  |  |  | 30,000 |
Net cash provided by financing activities |  |  | 1,544,706 |  |  |  | 181,597 |  |  |  | 1,726,303 |
Issuance of common stock for conversion of debt |  | $ | 811,174 |  |  | $ | (241,492 | ) |  | $ | 569,682 |
* | Previously reported amount was reclassified to financing activities based on current year’s presentation.

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- Definition The entire disclosure when substantial doubt is raised about the ability to continue as a going concern. Includes, but is not limited to, principal conditions or events that raised substantial doubt about the ability to continue as a going concern, management's evaluation of the significance of those conditions or events in relation to the ability to meet its obligations, and management's plans that alleviated or are intended to mitigate the conditions or events that raise substantial doubt about the ability to continue as a going concern. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 40 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-40/tableOfContent + Details
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