UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the ~~Quarterly~~quarterly ~~Period~~period ~~Ended~~ended ~~September~~March 3031, ~~2024~~ 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to __________

Commission file number: 001-41957

WETOUCH TECHNOLOGY INC.

(Exact name of registrant as specified in its charter)

Nevada		20-4080330
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

No. 29, Third Main Avenue Shigao Town, Renshou County Meishan, Sichuan, China		620500
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (86) 28-37390666

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		WETH		Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐ No ☒

As of ~~November 12~~October, 07, ~~2024~~2025, there were 11,931,534 shares of the registrant’s common stock, par value $0.001 per share, issued and outstanding.

WETOUCH TECHNOLOGY INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

	TABLE OF CONTENTS	Page Number

	Cautionary Note Regarding Forward Looking Statements	ii
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 (Unaudited)	F-1
	Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for the Three Months Ended March 31 2025 and 2024 (Unaudited)	F-2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	F-3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	F-4
	Notes to Condensed Consolidated Financial Statements	F-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9
Item 4.	Controls and Procedures	9

PART II	OTHER INFORMATION	12
Item 1.	Legal Proceedings	12
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3.	Defaults Upon Senior Securities	12
Item 4.	Mine Safety Disclosures	12
Item 5.	Other Information	12
Item 6.	Exhibits	13
	Signatures	14

		Page Number
	Cautionary Note Regarding Forward Looking Statements	ii
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023	F-1
	Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	F-2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	F-3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (Unaudited)	F-4
	Notes to Condensed Consolidated Financial Statements	F-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.	Controls and Procedures	13
PART II	OTHER INFORMATION	15
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	17
Item 6.	Exhibits	18
	Signatures	19

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act ~~of 1933~~, ~~as amended (the “Securities Act”) and~~ Section 21E of the ~~Securities~~ Exchange ~~Act~~ ~~of 1934, as amended (the “Exchange~~ Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking ~~statements~~ statements may be preceded by, or contain, words such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “predict,” “potential,” “might,” “could,” “would,” “should” or other words indicating future results, though not all forward-looking statements necessarily contain these identifying words. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, without limitation, statements about our future business operations and results, our strategy and competition. These statements represent our current expectations or beliefs concerning various future events and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations, including, but not limited to:

●

Our reliance on our top customers is significant. Failure to attract new customers or retain existing ones cost-effectively could materially and adversely impact our business, financial condition, and results of operations.

●

We hold a substantial amount of accounts receivable, which may become uncollectible.

● ~~Dismissing~~We BFface ~~Borgers~~fines ~~may~~and ~~cause~~penalties ~~significant~~from ~~expenses~~the orChinese ~~delays~~government infor ~~financings~~not orcompleting ~~SEC~~required filings~~, affecting our stock price and market access~~.

● You are unlikely to collect judgments or exercise remedies against BF Borgers for their work as our auditor.

● We face fines and penalties from the Chinese government for not completing required filings .

●

Our capacity to uphold the quality and safety standards of our products.

●

Our ability to compete effectively within the touchscreen display industry.

●

Without substantial additional financing, our ability to execute our business plan will be compromised.

● Failure to secure a new parcel for constructing our new buildings and facilities, as well as acquiring and installing new production lines on the new parcel, could materially and adversely affect our business, financial condition, and results of operations .

● ~~Unavailability~~Revocation or unavailability of preferential tax treatments and government subsidies, or successful challenges to our tax liability calculation by PRC tax authorities, may necessitate payment of tax, interest, and penalties exceeding our tax provisions.

●

Significant interruptions in the operations of our third-party suppliers could potentially disrupt our operations.

●

Risks associated with fluctuations in the cost, availability, and quality of raw materials may adversely affect our results of operations.

●

We are reliant on key executives and highly qualified managers, and retention cannot be assured.

●

Absence of long-term contracts with our suppliers allows them to reduce order quantities or terminate sales to us at any time.

●

Failure to adopt new technologies to evolving customer needs or emerging industry standards may materially and adversely affect our business.

●

Lack of business liability or disruption insurance exposes us to significant costs and business disruption.

●

Adverse regulatory developments in Mainland China may subject us to additional regulatory review, restrictions, disclosure requirements, and regulatory scrutiny by the SEC, increasing compliance costs and hindering future securities offerings.

●

Our common stock may be prohibited from trading in the U.S. under the Holding Foreign Companies Accountable Act if PCAOB inspection of our auditor is incomplete, leading to delisting or prohibition and potential decline in stock value.

●

Changes in China’s economic, political, or social conditions or government policies may adversely affect our business and operations.

●

Uncertainties regarding the PRC legal system, including enforcement and sudden changes in laws and regulations, could adversely affect us and limit legal protections.

●

Fluctuations in exchange rates could materially and adversely affect our results of operations and your investment value.

● The other risks and uncertainties discussed under the section titled “Risk Factors” beginning on page 1312 of this Quarterly Report and our other filings with the Securities and Exchange Commission.

~~The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with.~~ Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. ~~The~~We ~~forward-looking statements made in this Quarterly Report relate only to events or information as of the date of this Quarterly Report. Except as required by law, we~~ undertake no obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, ~~after~~except ~~the~~as ~~date~~required onby ~~which the statements are made or to reflect the occurrence of unanticipated events~~law.

You should read this Quarterly Report with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in the foregoing documents by these cautionary statements.

iii

Item 1. Financial Statements

WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets at September 30, 2024 (Unaudited) and December 31, 2023	F-1
Condensed Consolidated Balance Sheets at March 31, 2025 and December 31, 2024 (Unaudited)	F-1
Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	F-2
Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	F-2
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30,2024 and 2023 (Unaudited)	F-3
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	F-3
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30,2024 and 2023 (Unaudited)	F-4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	F-4
Notes to Condensed Consolidated Financial Statements	F-5 - F-2122

WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(~~Currency expressed in United States Dollars (“US”~~Unaudited)~~, except for number of shares)~~

	September 30, 2024			December 31, 2023
	March 31, 2025			December 31, 2024
	~~(Unaudited)~~	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	106,~~737~~407,~~492~~564		$	98103,~~040~~760,~~554~~324
Accounts receivable		9,732,758			7,455,252
Accounts receivable, net		11,101,555			7,504,630
Inventories		~~187~~146,~~408~~625			~~222~~112,~~102~~327
Prepaid expenses and other current assets		32,~~360~~167,~~770~~153			12,~~063~~762,~~627~~580
TOTAL CURRENT ASSETS		~~120~~119,~~018~~822,~~428~~897			~~106~~114,~~781~~139,~~535~~861
Property, plant and equipment, net		1312,~~125~~855,~~448~~562			12,~~859~~782,~~863~~997
TOTAL ASSETS	$	133,143,876		$	119,641,398
Operating right-of-use assets		952,398			1,055,208
Deferred tax assets		47,035			41,397
TOTAL ASSETS	$	133,677,892		$	128,019,463
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,~~218~~594,~~402~~777		$	~~640~~1,~~795~~263,981
Due to related parties		434,576			-
Due to a related party		400,513			149,211
Income tax payable		1,~~000~~290,~~261~~822			-
Accrued expenses and other current liabilities		~~800~~1,~~612~~558,615			4966,~~462,496~~461
Convertible promissory notes payable		-			1,239,126
Operating lease liabilities- current		599,654			571,539
TOTAL CURRENT LIABILITIES		35,~~453~~444,~~851~~381			62,~~342~~951,~~417~~192
Common stock purchase warrants liability		214,679			378,371
Operating lease liabilities- non current		352,744			482,606
TOTAL LIABILITIES	$	35,~~668~~797,~~530~~125		$	63,~~720~~433,~~788~~798
COMMITMENTS AND CONTINGENCIES (Note 13)
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock, $0.001 par value, 15,000,000 shares authorized, 11,931,534 and 9,732,948 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively*	$	11,932		$	9,733
Common stock, $0.001 par value, 15,000,000 shares authorized, 11,931,534 and 9,732,948 issued and outstanding as of March 31, 2025 and December 31, 2024, respectively*	$	11,932		$	11,932
Additional paid in capital*		52,501,680			4352,~~514~~501,~~125~~680
Statutory reserve		78,~~195~~073,~~092~~968			78,~~195~~073,~~092~~968
Retained earnings		7577,~~398~~192,~~355~~096			6974,~~477~~629,~~092~~374
Accumulated other comprehensive loss		(59,~~631~~898,~~713~~909	)		(710,~~275~~631,~~432~~289	)
TOTAL STOCKHOLDERS’ EQUITY		~~129~~127,~~475~~880,~~346~~767			~~112~~124,~~920~~585,~~610~~665
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	133,~~143~~677,~~876~~892		$	~~119~~128,~~641~~019,~~398~~463

* Retrospectively restated for effect of reverse stock split (1-for-20), see Note 1011 (2)

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-1

WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE LOSS

~~AND COMPREHENSIVE INCOME~~ (Unaudited)

(Currency expressed in United States Dollars(“US”),except for number of shares)

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
REVENUES	$	15,289,578		$	14,877,259
Cost of revenues		(9,647,947	)		(11,539,301	)
GROSS PROFIT		5,641,631			3,337,958

OPERATING EXPENSES
Selling expenses		(102,457	)		(459,792	)
General and administrative expenses		(1,566,440	)		(530,524	)
Research and development expenses		-			(42,738	)
Total operating expenses		(1,668,897	)		(1,033,054	)

INCOME FROM OPERATIONS		3,972,734			2,304,904

OTHER INCOME (EXPENSES)

Interest income		61,094			31,347
Interest expense		-			(1,169,974	)
Other income		-			46,620
Gain on changes in fair value of common stock purchase warrants liability		-			7,821
TOTAL OTHER INCOME (EXPENSES)		61,094			(1,084,186	)

INCOME BEFORE INCOME TAX EXPENSE		4,033,828			1,220,718

INCOME TAX EXPENSE		(1,471,106	)		(661,848	)

NET INCOME	$	2,562,722		$	558,870

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment		732,380			(1,929,993	)
COMPREHENSIVE INCOME (LOSS)	$	3,295,102		$	(1,371,123	)

EARNINGS PER COMMON SHARE
Basic	$	0.21		$	0.04
Diluted	$	0.21		$	0.04

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING*
Basic		11,931,534			13,342,294
Diluted		11,931,534			13,392,999

* Retrospectively restated for effect of reverse stock split (~~Unaudited~~1-for-20), see Note 11 (2)

	Three-Month Period Ended						Nine-Month Period Ended
	September 30,						September 30,
	2024			2023			2024			2023
REVENUES	$	11,537,989		$	11,123,605		$	38,649,823		$	37,331,498
COST OF REVENUES		(7,101,645	)		(6,346,079	)		(26,014,703	)		(20,261,755	)
GROSS PROFIT		4,436,344			4,777,526			12,635,120			17,069,743
OPERATING EXPENSES
Selling expenses		(159,032	)		(265,526	)		(908,540	)		(397,591	)
General and administrative expenses		(750,441	)		(205,940	)		(2,083,568	)		(1,929,603	)
Research and development expenses		(43,859	)		(20,580	)		(129,808	)		(61,849	)
OPERATING EXPENSES		(953,332	)		(492,046	)		(3,121,916	)		(2,389,043	)
INCOME FROM OPERATIONS		3,483,012			4,285,480			9,513,204			14,680,700
Interest income		39,003			30,616			108,396			89,845
Interest expense		-			(139,876	)		(1,169,974	)		(211,383	)
Other income		-			-			46,560			-
Gain (loss)on changes in fair value of common stock purchase warrants liability		118,120			(169,067	)		163,692			(124,283	)
TOTAL OTHER INCOME (LOSS)		157,123			(278,327	)		(851,326	)		(245,821	)
INCOME BEFORE INCOME TAX EXPENSE		3,640,135			4,007,153			8,661,878			14,434,879
INCOME TAX EXPENSE		(979,436	)		(1,148,185	)		(2,740,615	)		(4,109,679	)
NET INCOME	$	2,660,699		$	2,858,968		$	5,921,263		$	10,325,200
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		4,352,118			(674,209	)		1,643,719			(7,560,136	)
COMPREHENSIVE INCOME	$	7,012,817		$	2,184,759		$	7,564,982		$	2,765,064
EARNINGS PER COMMON SHARE*
Basic	$	0.22		$	0.29		$	0.51		$	1.13
Diluted	$	0.22		$	0.29		$	0.51		$	1.13
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING*
Basic		11,931,534			9,712,404			11,529,234			9,135,132
Diluted		11,982,239			9,794,357			11,579,938			9,224,423

The accompanying notes are an integral part of these consolidated financial statements.

* Retrospectively restated for effect of reverse stock split (1F-~~for-20), see Note 10 (~~2)

~~The accompanying notes are an integral part of~~WETOUCH ~~these~~TECHNOLOGY ~~consolidated~~INC. ~~financial~~AND ~~statements.~~ITS SUBSIDIARIES

~~F-2~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

~~WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES~~(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Common stock at Par value $0.001				Additional paid-in		Statutory		Retained		Accumulated other comprehensive			Total stockholders’
	Shares		Amount		capital		reserve		Earnings		loss			equity

Balance as of December 31 2024		11,931,534	$	11,932	$	52,501,680	$	8,073,968	$	74,629,374	$	(10,631,289	)	$	124,585,665

Net income		-		-		-		-		2,562,722		-			2,562,722
Foreign currency translation adjustment		-		-		-		-		-		732,380			732,380

Balance as of March 31, 2025		11,931,534	$	11,932	$	52,501,680	$	8,073,968	$	77,192,096	$	(9,898,909	)	$	127,880,767

(Currency expressed in United States Dollars(“US”),except for number of shares)

	Common stock at Par value $0.001				Additional paid-in			Statutory		Retained		Accumulated other comprehensive			Total stockholders’
	Shares		Amount		capital			reserve		Earnings		loss			equity

Balance as of December 31 2023*		9,732,948	$	9,733	$	43,514,125		$	7,195,092	$	69,477,092	$	(7,275,432	)	$	112,920,610

Issuance of common stock from the 2024 Public Offering, net of issuance costs		2,160,000		2,160		8,987,594			-		-		-			8,989,754
Exercise of warrants issued in conjunction with legal/consultant services in 2020 and 2021		35,861		36		(36	)		-		-		-			-

Exercise of warrants issued to third parties in conjunction with debt issuance in 2021		2,725		3		(3	)		-		-		-			-
Net income		-		-		-			-		558,870		-			558,870
Foreign currency translation adjustment		-		-		-			-		-		(1,929,993	)		(1,929,993	)

Balance as of March 31, 2024		11,931,534	$	11,932	$	52,501,680		$	7,195,092	$	70,035,962	$	(9,205,425	)	$	120,539,241

* Retrospectively restated for effect of reverse stock split (~~Unaudited~~1-for-20), see Note 11 (2)

	Common stock at Par value $0.001				Additional paid-in			Statutory		Retained		Accumulated other comprehensive			Total stockholders’
	Shares		Amount		capital			reserve		Earnings		loss			equity
Balance as of December 31 2022		1,680,248	$	1,680	$	3,402,178		$	6,040,961	$	62,366,892	$	(2,977,524	)	$	68,834,187
Shares issued to private placement		8,000,000		8,000		39,992,000			-		-		-			40,000,000
Exercise of warrants issued to third parties in conjunction with debt issuance in 2021		15,000		15		(15	)				-		-			-
Net income		-		-		-			-		7,466,232		-			7,466,232
Foreign currency translation adjustment		-		-		-			-		-		(6,885,927	)		(6,885,927	)
Balance as of June 30, 2023		9,695,248	$	9,695	$	43,394,163		$	6,040,961	$	69,833,124	$	(9,863,451	)	$	109,414,492
Fraction shares issued due to reverse stock split		5,362		6		(6	)		-		-		-			-
Exercise of warrants issued to third parties in conjunction with debt issuance in 2021		7,338		7		(7	)		-		-		-			-
Stock issuance for convertible promissory notes payable		25,000		25		119,975			-		-		-			120,000
Net income											2,858,968					2,858,968
Foreign currency translation adjustment		-		-		-			-		-		(674,209	)		(674,209	)
Balance as of September 30, 2023		9,732,948	$	9,733	$	43,514,125		$	6,040,961	$	72,692,092	$	(10,537,660	)	$	111,719,251

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Common stock at Par value $0.001				Additional paid-in			Statutory		Retained		Accumulated other comprehensive			Total stockholders’
	Shares		Amount		capital			reserve		Earnings		loss			equity
Balance as of December 31 2023*		9,732,948	$	9,733	$	43,514,125		$	7,195,092	$	69,477,092	$	(7,275,432	)	$	112,920,610
Issuance of common stock from the 2024 Public Offering, net of issuance costs		2,160,000		2,160		8,987,594			-		-		-			8,989,754
Exercise of warrants issued in conjunction with legal/consultant services in 2020 and 2021		35,861		36		(36	)		-		-		-			-
Exercise of warrants issued to third parties in conjunction with debt issuance in 2021		2,725		3		(3	)		-		-		-			-
Net income		-		-		-			-		3,260,564		-			3,260,564
Foreign currency translation adjustment		-		-		-			-		-		(2,708,399	)		(2,708,399	)
Balance as of June 30, 2024		11,931,534	$	11,932	$	52,501,680		$	7,195,092	$	72,737,656	$	(9,983,831	)	$	122,462,529
Net income		-		-		-			-		2,660,699		-			2,660,699
Foreign currency translation adjustment		-		-		-			-		-		4,352,118			4,352,118
Balance as of September 30, 2024		11,931,534	$	11,932	$	52,501,680		$	7,195,092	$	75,398,355	$	(5,653,713	)	$	129,475,346

F-3

*WETOUCH TECHNOLOGY ~~Retrospectively~~INC. ~~restated~~AND ~~for~~ITS ~~effect of reverse stock split (1-for-20), see Note 10 (2)~~SUBSIDIARIES

~~The accompanying notes are an integral part of~~CONDENSED ~~these~~CONSOLIDATED ~~condensed~~STATEMENTS ~~consolidated~~OF ~~financial~~CASH ~~statements.~~FLOWS

~~F-3~~(Unaudited)

WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)
Cash flows from operating activities
Net income	$	2,562,722		$	558,870
Adjustments to reconcile net income to cash provided by (used in) operating activities
Allowance for credit loss		45,739			-
Reversal of provision for obsolete inventory		(25,276	)		-
Depreciation		2,471			2,316
Amortization of discounts and issuance cost of the notes		-			5,715
Amortization of operating Right-of-use assets		156,014			-
(Gain) on changes in fair value of common stock purchase warrants liability		-			(7,821	)

Changes in operating assets and liabilities:
Accounts receivable		(3,545,017	)		(3,622,872	)
Inventories		(8,289	)		32,939
Prepaid expenses and other current assets		554,764			(3,429,690	)
Deferred tax assets		(5,383	)		-
Accounts payable		322,661			(64,222	)
Amounts due to related parties		250,959			-
Income tax payable		1,290,429			661,848
Accrued expenses and other current liabilities		589,309			(3,354,627	)
Operating lease liabilities		(151,375	)		-
Net cash provided by (used in) operating activities		2,039,728			(9,217,544	)

Cash flows from investing activities

Purchase of property, plant and equipment		-			(111,289	)
Net cash used in investing activities		-			(111,289	)

Cash flows from financing activities
Proceeds from issuance of common stock, net of issue costs		-			8,989,754
Repayment of interest-free advances to a third party		-			(82,864	)
Repayments of convertible promissory notes payable		-			(1,400,750	)
Net cash provided by financing activities		-			7,506,140

Effect of changes of foreign exchange rates on cash		607,513			(1,421,411	)
Net increase (decrease) in cash		2,647,238			(3,244,104	)
Cash, beginning of period		103,760,324			98,040,554
Cash, end of period	$	106,407,562		$	94,796,450
Supplemental disclosures of cash flow information
Interest paid	$	-		$	1,186,210
Issue costs charged to additional paid-in capital	$	-		$	1,810,246
Exercise of warrant shares	$	-		$	38,586
Lease liabilities arising from obtaining right-of-use assets	$	47,251		$	-

~~CONDENSED~~The accompanying ~~CONSOLIDATED~~notes ~~STATEMENTS~~are OFan ~~CASH~~integral ~~FLOWS~~part of these condensed consolidated financial statements.

~~(Currency expressed in United States Dollars(“US”),except for number of shares)~~F-4

~~(Unaudited)~~WETOUCH TECHNOLOGY INC. AND ITS SUBSIDIARIES

	For the Nine Months Ended September, 30
	2024			2023
Cash flows from operating activities
Net income	$	5,921,263		$	10,325,200
Adjustments to reconcile net income to cash (used in) provided by operating activities
Depreciation		7,307			9,465
Amortization of discounts and issuance cost of the notes		5,715			24,121
(Gain) loss on changes in fair value of common stock purchase warrants liability		(163,692	)		124,283
Changes in operating assets and liabilities:
Accounts receivable		(2,135,259	)		(5,568,912	)
Amounts due from related parties		-			(98	)
Inventories		35,410			199,566
Prepaid expenses and other current assets		(2,288,804	)		335,230
Accounts payable		555,824			202,515
Amounts due to related parties		-			(1,665	)
Income tax payable		975,226			1,171,069
Accrued expenses and other current liabilities		(3,658,027	)		2,187,200
Net cash (used in) provided by operating activities		(745,037	)		9,007,974
Cash flows from investing activity
Purchase of property, plant and equipment		(119,204	)		-
Net cash used in investing activity		(119,204	)		-
Cash flows from financing activities
Proceeds from issuance of common stock, net of issue costs		8,989,754			-
Proceeds from stock issuance of private placement		-			40,000,000
Proceeds from advances from related parties		434,576			-
Repayments of convertible promissory notes payable		(1,400,750	)		(55,000	)
Net cash provided by financing activities		8,023,580			39,945,000
Effect of changes of foreign exchange rates on cash		1,537,599			(6,266,700	)
Net increase in cash		8,696,938			42,686,274
Cash, beginning of period		98,040,554			51,250,505
Cash, end of period	$	106,737,492		$	93,936,779
Supplemental disclosures of cash flow information
Income tax paid	$	1,765,389		$	2,938,610
Interest paid	$	1,186,210		$	-
Issue costs charged to additional paid-in capital	$	1,810,246		$	-
Exercise of warrant shares	$	38,586		$	-
Cashless stock issuance for convertible promissory notes payable	$	-		$	22,338

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The accompanying notes are an integral part of~~NOTE ~~these~~1 ~~condensed~~— ~~consolidated~~BUSINESS ~~financial statements.~~DESCRIPTION

~~F-4~~Wetouch Technology Inc. (“Wetouch”, or the “Company”), formerly known as Gulf West Investment Properties, Inc., was originally incorporated in August 1992, under the laws of the state of Nevada.

~~WETOUCH~~On October ~~TECHNOLOGY~~9, ~~INC~~2020, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Wetouch Holding Group Limited (“BVI Wetouch”) and all the shareholders of BVI Wetouch (each, a “BVI Shareholder” and collectively, the “BVI Shareholders”), to acquire all the issued and outstanding capital stock of BVI Wetouch in exchange for the issuance to the BVI Shareholders an aggregate of 28,000,000 shares (1,400,000 shares post-Reverse Stock Split) of the Company’s common stock (the “Reverse Merger”). ~~AND~~In ~~ITS~~the ~~SUBSIDIARIES~~Reverse Merger, each ordinary share of BVI Wetouch was exchanged for 2,800 shares (140 shares post-Reverse Stock Split) of common stock of Wetouch. Immediately after the closing of the Reverse Merger on October 9, 2020, the Company had a total of 31,396,394 (1,569,820 shares post-Reverse Stock Split) issued and outstanding shares of common stock. As a result of the Reverse Merger, BVI Wetouch became a wholly-owned subsidiary of the Company.

~~NOTES~~BVI Wetouch TOis ~~CONDENSED~~a ~~CONSOLIDATED~~holding ~~FINANCIAL~~company ~~STATEMENTS~~whose only asset, held through a subsidiary, is 100% of the registered capital of Sichuan Wetouch Technology Co., Ltd. (“Sichuan Wetouch”), a limited liability company organized under the laws of the People’s Republic of China (“China” or the “PRC”). Sichuan Wetouch is primarily engaged in the business of research and development, manufacture, and distribution of touchscreen displays to customers both in the PRC and overseas. The touchscreen products, which are manufactured by the Company, are primarily for use financial terminals, automotive, Point of Sales, gaming, lottery, medical, Human-Machine Interface (HMI), and other specialized industries.

~~NOTE~~The Reverse 1Merger —was ~~ORGANIZATION~~accounted ~~AND~~for ~~BUSINESS~~as a recapitalization effected by a share exchange, wherein BVI Wetouch is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of BVI Wetouch have been brought forward at their book value and no goodwill has been recognized. The number of shares, par value amount, and additional paid-in capital in the prior years are retrospectively adjusted accordingly.

~~Wetouch Technology Inc.~~Corporate ~~(“Wetouch”,~~History ~~or the “Company”), formerly known as Gulf West Investment Properties, Inc., was originally incorporated in August 1992, under the laws~~ of ~~the~~BVI ~~state of Nevada.~~Wetouch

~~On October 9, 2020, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Wetouch Holding Group Limited (“~~BVI Wetouch”) ~~and~~was ~~all~~incorporated under the ~~shareholders~~laws of ~~BVI~~British ~~Wetouch~~Virgin ~~(each,~~Islands aon ~~“BVI~~August ~~Shareholder” and collectively~~14, ~~the~~2020. ~~“BVI~~It ~~Shareholders”), to~~became ~~acquire all~~ the ~~issued~~holding ~~and~~company ~~outstanding capital stock~~ of ~~BVI~~Hong ~~Wetouch~~Kong ~~in exchange for the issuance to the BVI Shareholders an aggregate~~Wetouch ofElectronics ~~28,000,000~~Technology ~~shares~~Limited (~~1,400,000 shares post-Reverse Stock Split) of the Company’s common stock (the~~ “~~Reverse~~Hong ~~Merger”). In~~Kong ~~the Reverse Merger, each ordinary share of BVI~~ Wetouch ~~was exchanged for 2,800 shares (140 shares post-Reverse Stock Split~~”) ~~of common stock of Wetouch. Immediately after the closing of the Reverse Merger~~ on ~~October~~September 911, 2020~~, the Company had a total of 31,396,394 (1,569,820 shares post-Reverse Stock Split) issued and outstanding shares of common stock~~. ~~As a result of the Reverse Merger, BVI Wetouch became a wholly-owned subsidiary of the Company.~~

~~BVI Wetouch is a holding~~Hong ~~company~~Kong ~~whose only asset, held through a subsidiary, is 100% of the registered capital of Sichuan~~ Wetouch Technology ~~Co.,~~Limited ~~Ltd.~~ (“~~Sichuan~~ HK Wetouch”), awas ~~limited~~incorporated ~~liability~~as ~~company~~a ~~organized~~holding company under the laws of ~~the~~Hong ~~People’s~~Kong ~~Republic~~Special Administrative ofRegion ~~China~~ (~~“China” or~~ the “~~PRC~~SAR”). ~~Sichuan~~on ~~Wetouch~~December is3, ~~primarily~~2020. ~~engaged~~On inMarch ~~the~~2, ~~business~~2021, ofHK ~~research~~Wetouch ~~and~~acquired ~~development,~~all ~~manufacturing,~~shares ~~and distribution~~ of ~~touchscreen~~Hong ~~displays~~Kong Wetouch. Due to ~~customers both in~~ the ~~PRC~~fact ~~and~~that ~~overseas.~~Hong ~~The~~Kong ~~touchscreen~~Wetouch ~~products,~~and ~~which~~HK Wetouch are ~~manufactured~~both byunder the ~~Company,~~same ~~are primarily~~sole ~~applied for use in financial terminals~~stockholder, ~~automotive,~~the ~~Point~~acquisition ofis ~~Sales,~~accounted ~~gaming,~~for ~~lottery, medical, Human-Machine Interface (HMI),~~under ~~and~~common ~~other specialized industries~~control.

~~The Reverse Merger was~~In ~~accounted~~June ~~for as a recapitalization effected by a share exchange~~2021, ~~wherein~~Hong ~~BVI~~Kong Wetouch iscompleted ~~considered~~its ~~the~~dissolution ~~acquirer~~process ~~for~~pursuant ~~accounting~~to ~~and~~the ~~financial reporting~~minutes ~~purposes. The assets and liabilities~~ of ~~BVI~~its ~~Wetouch~~special ~~have~~stockholder ~~been brought forward at their book value and no goodwill has been recognized~~meeting. ~~The number of shares, par value amount, and additional paid-in capital in the prior years are retrospectively adjusted accordingly.~~

~~Through its wholly-owned~~Sichuan ~~subsidiaries,~~Wetouch ~~the~~was ~~Company~~formed ison ~~engaged~~May ~~in the research~~6, ~~development,~~2011 ~~manufacturing, sales and servicing of medium to large sized projected capacitive touchscreens. The Company specializes~~ in ~~large-format~~the ~~touchscreens,~~PRC ~~which are developed~~ and ~~designed~~became ~~for~~ a ~~wide~~Wholly ~~variety~~Foreign-Owned ~~of markets~~Enterprise ~~and~~(“WFOE”) ~~used~~ in ~~the~~PRC ~~financial~~on ~~terminals,~~February ~~automotive~~23, 2017. ~~Point~~On ofJuly ~~Sales~~19, ~~gaming~~2016, ~~lottery,~~Sichuan ~~medical,~~Wetouch ~~Human-Machine~~was ~~Interface~~100% ~~(“HMI”), and~~held ~~other~~by ~~specialized~~HK ~~industries~~Wetouch.

~~Corporate History~~On ofDecember ~~BVI~~30, ~~Wetouch~~2020, Sichuan Vtouch was incorporated in Chengdu, Sichuan, under the PRC laws.

BVI Wetouch was incorporated under the laws of British Virgin Islands on August 14, 2020. It became the holding company of Hong Kong Wetouch Electronics Technology Limited (“Hong Kong Wetouch”) on September 11, 2020.F-5

~~Hong Kong Wetouch Technology~~In ~~Limited~~March ~~(“HK Wetouch”)~~2021, ~~was~~pursuant ~~incorporated~~to aslocal aPRC ~~holding~~government ~~company~~guidelines ~~under~~on ~~the~~local ~~laws~~environmental ofissues ~~Hong~~and ~~Kong Special Administrative Region (~~the ~~“SAR”)~~ onnational ~~December 3~~plan, ~~2020.~~Sichuan ~~On March 2, 2021, HK~~ Wetouch ~~acquired~~was ~~all~~under the ~~shares~~government ofdirected ~~Hong~~relocation ~~Kong Wetouch~~order. ~~Due~~Sichuan toVtouch ~~the~~took ~~fact~~over ~~that Hong Kong Wetouch and HK Wetouch are both under~~ the ~~same~~operating ~~sole~~business ~~stockholder,~~of ~~the~~Sichuan ~~acquisition is accounted for under common control~~Wetouch.

InOn March ~~June~~30, ~~2021~~2023, ~~Hong~~an ~~Kong Wetouch~~independent ~~completed~~third ~~its~~party ~~dissolution~~acquired ~~process~~all ~~pursuant~~shares ~~to the minutes~~ of ~~its~~Sichuan ~~special~~Wetouch for ~~stockholder~~a ~~meeting~~nominal amount.

~~Sichuan Wetouch was formed~~As ~~on May 6, 2011 in the PRC and became~~ a ~~wholly~~result ~~foreign-owned~~of ~~enterprise (“WFOE”) in~~ the ~~PRC~~above ~~on February 23~~restructuring, ~~2017.~~HK ~~On July 19, 2016, Sichuan~~ Wetouch ~~was~~became ~~100%~~the ~~held~~sole bystockholder HKof ~~Wetouch~~Sichuan Vtouch.

~~On December 30, 2020,~~The ~~Sichuan~~following ~~Vtouch~~diagram ~~was~~illustrates ~~incorporated~~the inCompany’s ~~Chengdu,~~current ~~Sichuan,~~corporate ~~under the PRC laws.~~structure:

~~F-5~~NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~In March 2021, pursuant~~(a) toBasis ~~local~~of ~~PRC~~Presentation ~~government guidelines on local environmental issues~~ and ~~the~~Principles ~~national plan, Sichuan Wetouch was subject to a government directed relocation order. Sichuan Vtouch took over the operating business~~ of ~~Sichuan~~Consolidation ~~Wetouch.~~

OnThe accompanying ~~March~~unaudited ~~30,~~condensed ~~2023,~~consolidated anfinancial ~~independent~~statements ~~third~~have ~~party~~been prepared in accordance with accounting principles generally ~~acquired~~accepted ~~all~~in ~~shares~~the United States of ~~Sichuan~~America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the United States Securities and Exchange Commission (the “SEC”). The condensed consolidated balance sheet as of December 31, 2024 was derived from the audited consolidated financial statements of Wetouch. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated balance sheet of the Company as of December 31, 2024, and the related consolidated statements of comprehensive income, changes in equity and cash flows for athe ~~nominal~~years ~~amount~~then ended.

AsIn the aopinion ~~result~~ of the ~~above~~management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of ~~restructuring~~the financial position as of March 31, HK2025, ~~Wetouch~~the ~~became~~results of operations and cash flows for the ~~sole~~three-month ~~shareholder~~periods ended March 31, 2025 and 2024 have been made. However, the results of ~~Sichuan~~operations ~~Vtouch~~included in such financial statements may not necessarily be indicative of annual results.

~~The following diagram illustrates the Company’s current corporate structure:~~F-6

~~NOTE~~Deconsolidation of 2Sichuan ~~— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~Wetouch

(On March 30, 2023, upon transferring Sichuan Wetouch to a) ~~Basis~~third-party ofindividual ~~Presentation~~for ~~and~~a ~~Principles~~nominal value, the Company was no longer able to operate and exert control over this subsidiary whose operation has been taken over by Sichuan Vtouch since the first quarter of ~~Consolidation~~2021. As a result, Sichuan Wetouch was deconsolidated accordingly since the disposal date.

The ~~accompanying unaudited condensed consolidated~~ ~~financial~~deconsolidated ~~statements~~Sichuan have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the United States Securities and Exchange Commission (the “SEC”). The condensed consolidated balance sheet as of December 31, 2023 was derived from the audited consolidated financial statements of Wetouch. ~~The~~had ~~accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated balance sheet of the Company as of December 31~~assets, ~~2023,~~liabilities and the ~~related~~non-controlling ~~consolidated~~interest ~~statements~~on ofdisposal ~~income~~date ~~and~~as ~~comprehensive income (loss), changes in stockholders’ equity and cash flows for~~ the ~~years then ended.~~following:

In the opinion of the management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of September 30, 2024, the results of operations and cash flows for the nine months ended September 30, 2024 and 2023 have been made. However, the results of operations included in such financial statements may not necessarily be indicative of annual results.

	March 30, 2023
Total assets as of deconsolidated date	$	-
Total liabilities as of deconsolidated date		-
Total gain or loss from deconsolidation	$	-

~~F-6~~Upon the deconsolidation, the Company was no longer entitled to the assets and also legally released from the liabilities previously held by the deconsolidated Sichuan Wetouch, derived nil gain or loss from the deconsolidation in the condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2023. The disposal of Sichuan Wetouch did not represent a strategic shift and did not have a major effect on the Company’s operation. There was no cash outflow for the disposal for the three months ended March 31, 2023.

~~Deconsolidation~~(b) Uses of ~~Sichuan Wetouch~~Estimates

OnIn preparing ~~March~~the ~~30,~~consolidated ~~2023~~financial statements in conformity with US GAAP, ~~upon~~management ~~transferring~~makes ~~Sichuan~~estimates ~~Wetouch~~and assumptions that affect the toreported aamounts ~~third-party~~of ~~individual~~assets ~~for~~and aliabilities ~~nominal~~and ~~value,~~disclosure of contingent assets and liabilities at the ~~Company~~date ~~was~~of nothe ~~longer~~financial ~~able~~statements and tothe ~~operate~~reported amounts of revenues and ~~exert~~expenses ~~control~~during ~~over~~the ~~Sichuan~~reporting ~~Wetouch~~period. ~~whose~~These estimates are based on information as of the date ~~operation~~of ~~has~~the ~~been~~consolidated ~~taken~~financial ~~over~~statements. Significant estimates required to be made by ~~Sichuan~~management ~~Vtouch~~include, ~~since~~but are not limited to, the allowance ~~first~~for ~~quarter~~estimated ofuncollectible ~~2021.~~receivables, Asfair avalues ~~result~~of financial instruments, ~~Sichuan~~inventory ~~Wetouch~~valuations, ~~was~~useful ~~deconsolidated~~lives ~~accordingly~~of property, ~~since~~plant and equipment, the ~~disposal~~recoverability ~~date~~of long-lived assets, provision necessary for contingent liabilities, revenue recognition and realization of deferred tax assets. Actual results could differ from those estimates.

~~The deconsolidated Sichuan~~(c) ~~Wetouch~~Significant ~~had~~Accounting ~~assets, liabilities and the non-controlling interest on disposal date as the following:~~Policies

		March 30, 2023
Total assets as of deconsolidated date	$	-
Total liabilities as of deconsolidated date		-
Total gain or loss from deconsolidation	$	-

For a detailed discussion about Wetouch’s significant accounting policies, refer to Note 2 — “Summary of Significant Accounting Policies,” in Wetouch’s consolidated financial statements included in Company’s 2024 audited consolidated financial statements. Other than the revised accounting policies on lease and segment reporting as below, during the three-month periods ended March 31, 2025, there were no significant changes made to Wetouch significant accounting policies.

Upon the deconsolidation, the Company was no longer entitled to the assets and also legally released from the liabilities previously held by the deconsolidated Sichuan Wetouch, derived nil gain or loss from the deconsolidation in the condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2023. The disposal of Sichuan Wetouch did not represent a strategic shift and did not have a major effect on the Company’s operation. There was no cash outflow for the disposal for the three months ended March 31, 2023.F-7

~~(b) Uses of Estimates~~Lease

~~In preparing the consolidated financial statements~~The inCompany ~~conformity~~adopted ~~with~~ASU US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periodNo. ~~These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include~~2016-02, ~~but~~Leases ~~are~~(Topic ~~not~~842) ~~limited~~(“ASU ~~to,~~2016-02”) ~~the allowance~~ for ~~estimated~~all ~~uncollectible~~periods ~~receivables,~~presented. ~~fair values~~The ofCompany ~~financial~~elected ~~instruments, inventory valuations, useful lives of property, plant and equipment,~~ the ~~recoverability of long~~short-~~lived~~term ~~assets,~~lease ~~provision~~exemption ~~necessary~~ for ~~contingent~~all ~~liabilities,~~contracts ~~and~~with ~~revenue~~lease ~~recognition.~~terms ~~Actual~~of ~~results~~12 months ~~could~~or ~~differ from those estimates~~less.

~~(c)~~Under the ~~Significant~~guidance ~~Accounting~~of ~~Policies~~ASU 2016-02, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements.

~~For~~The Company’s lease terms include options to renew or terminate the lease when it is reasonably certain that it will exercise the option. The Company determines if a ~~detailed~~contract ~~discussion~~contains ~~about~~a ~~Wetouch~~lease based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset that the Company does not own and whether it has the right to direct the use of an identified asset in exchange for consideration. Right of use (“ROU”) assets represent the Company’s right to use an underlying asset ~~significant~~for ~~accounting~~the ~~policies,~~lease ~~refer~~term and lease liabilities represent the Company’s obligation to ~~Note~~make 2lease —payments ~~“Summary~~arising from the lease. ROU assets are recognized as the amount of ~~Significant~~the ~~Accounting~~lease ~~Policies~~liability,” inadjusted ~~Wetouch~~for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s ~~consolidated~~ ~~financial~~incremental ~~statements~~borrowing ~~included~~rate (“IBR”), because the interest rate implicit in most of the Company’s ~~2023~~leases ~~audited~~is ~~consolidated~~not ~~financial~~readily ~~statements~~determinable. ~~Other~~The ~~than~~IBR is a hypothetical rate based on the ~~revised~~Company’s ~~accounting~~understanding ~~policy~~of onwhat ~~property,~~its ~~plant~~credit rating would be and ~~equipment,~~the ~~net,~~resulting asinterest ~~below,~~it ~~during~~would pay to borrow an amount equal to the ~~nine~~lease ~~months~~payments ~~ended~~in ~~September~~a 30similar economic environment over the lease term on a collateralized basis. Lease payments may be fixed or variable, ~~2024~~however, ~~there~~only ~~were~~fixed nopayments or ~~significant~~in-substance ~~changes~~fixed payments are included in the Company’s lease liability calculation. Variable lease payments are recognized ~~made~~in tooperating ~~Wetouch~~expenses ~~significant~~in ~~accounting~~the ~~policies~~period in which the obligation for those payments is incurred.

~~Property~~The lease right-of-use assets are initially measured at the carrying amount of the lease liability and adjusted for any prepaid or accrued lease payments, ~~plant~~remaining balance of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use-asset. Lease expense for minimum lease payments exclusive of value-added tax is recognized on a straight-line basis over the lease term The new standard provides a number of optional practical expedients at transition. The Company elected certain practical expedients that must be elected as a package, which permit the Company to not reassess, under the new standard, prior conclusions about (1) lease identification, (2) lease classification and ~~equipment~~(3) initial direct costs. Additionally, ~~net~~the Company elected a short-term lease exception policy, which allows entities to not apply Topic 842 to short-term leases (i.e. leases with terms of 12 months or less) and a hindsight policy, which allows an entity to include current considerations for existing leases when determining initial lease terms. The Company has also elected to account for lease and non-lease components as a single component for all leases and elected to utilize an IBR (incremental borrowing rate) that equals the risk free rate plus premium for all leases when calculating the lease liability.

~~Property, plant and equipment are stated at cost~~Segment ~~less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives:~~reporting

			Useful life
Buildings			20 years
Machinery and equipment			10 years
Vehicles			10 years

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) or decision-making group, in deciding how to allocate resources and in assessing performance. The Company evaluated its portfolio of service to determine whether certain services exhibit similar characteristics, such that they should be grouped together in the Company’s disclosure. The Company derives revenue primarily from projects performed under: (i) master and general service contract with customers for electric power supply solutions, mainly for the design and installation of low voltage outlet cable and bridge, power distribution box and electric vehicle power station; (2) installation of power wires, power poles and electricity distribution equipment and facilities for power supply system upgrade for both residential and commercial projects. The Company’s services have similar economic characteristics with respect to construction project nature, raw materials and supplies to be used in the projects, vendors, marketing and promotions, customers and methods of distribution. The Company’s chief operating decision maker (“CODM”) has been identified as the Chief Executive Officer (“CEO”), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The CODM confers regularly to review trends in operating metrics, revisit, assess, and adjust significant strategic and operational matters, and make resource adjustments as needed. These discussions include exploring opportunities for project acquisition, responding immediately and effectively to operational adjustments, aligning ongoing business activities with corporate-level objectives, improving customer satisfaction, and enhancing corporate culture, among other management concerns. The primary measure of segment revenue and profitability for the Company’s operating segment is considered to be consolidated revenue and net income. Certain financial information, such as revenue, can be disaggregated, whereas cost of revenues, selling and marketing expenses, general and administrative expenses, research and development expenses and other income (expenses), are mixed and not disaggregated. Hence, with respect to costs of revenues and operating expenses and other income (expenses), no discrete financial information beyond the consolidated results is prepared and presented to the CODM.

~~Expenditures for maintenance and repairs, which~~As doall ~~not materially extend the useful lives~~ of the Company’s assets, are ~~charged~~all tolocated ~~expense~~in asthe ~~incurred.~~PRC, ~~Expenditures~~no ~~for~~geographical ~~major~~segment ~~renewals~~information ~~and betterments which substantially extend the useful life~~ of assets ~~are~~is ~~capitalized~~presented. The ~~cost~~CODM ~~and~~does not ~~related~~review ~~accumulated~~any ~~depreciation~~information ofregarding total assets ~~retired or~~on ~~sold~~a ~~are~~reportable ~~removed~~segment ~~from~~basis. Through the ~~respective accounts~~evaluation, ~~and any gain or loss is recognized in~~ the ~~consolidated~~CODM ~~statements~~determined ofthat ~~income and other~~the ~~comprehensive~~Company ~~income~~has ~~(loss)~~only asone ~~other~~reporting ~~income or expenses~~segment.

Construction in progress, funded by Company’s working capital, represents manufacturing facilities and office building under construction, is stated at cost and transferred to property, plant and equipment when it is substantially ready for its intended use. No depreciation is recorded for construction in progress. The management estimate that construction in progress for our new facilities will be completed by the end of first quarter of 2025 and will transfer construction in progress to property, plant and equipment to start depreciation.F-8

~~F-7~~Recent accounting pronouncements

~~NOTE~~On November 327, —2023, ~~ACCOUNTS~~FASB ~~RECEIVABLE~~issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires that an entity disclose significant segment expenses impacting profit and loss that are regularly provided to the chief operating decision maker. The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption. The amendments in ASU 2023-07 are required to be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

~~Accounts~~On December ~~receivable~~14, ~~consisted~~2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires that entities disclose specific categories in their rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The new standard is effective for the Company beginning December 15, 2024, with early adoption permitted effective for fiscal years beginning January 1, 2024. The adoption of the ~~following:~~standard did not have a material impact on the Company’s consolidated financial statements.

		September 30, 2024				December 31, 2023
Accounts receivable		$	9,732,758			$	7,455,252

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the consolidated financial statements to provide enhanced transparency into the expense captions presented on the face of the statement of income and comprehensive income. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted, and may be applied either prospectively or retrospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements. On January 6, 2025, FASB issued ASU 2025-01 that clarifies for non-calendar year-end entities the interim effective date of Accounting Standards Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Public business entities are required to adopt the guidance in Update 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its related disclosures.

In March 2025, the FASB issued ASU 2025-02—Liabilities (405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122. The ~~Company’s~~amendments ~~accounts~~in ~~receivable~~this ~~primarily~~Update are effective immediately and on a fully retrospective basis to annual periods beginning after ~~includes~~December ~~balance~~15, ~~due~~2024. ~~from~~The ~~customers~~Company ~~when~~is currently evaluating the ~~Company’s~~effect ~~products~~of ~~are~~adoption ~~sold~~of ~~and~~this ~~delivered~~standard to ~~customers~~its consolidated financial statements and disclosures.

~~NOTE~~Other accounting 4standards —that ~~PREPAID~~have ~~EXPENSES~~been ~~AND~~issued ~~OTHER~~by ~~CURRENT~~FASB that do not require adoption until a future date are not expected to have a material ~~ASSETS~~impact on the unaudited condensed consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to, its unaudited condensed consolidated financial condition, results of operations, cash flows or disclosures.

~~Prepaid expenses and other current assets consisted of the following:~~F-9

	September 30, 2024		December 31, 2023
Advance to suppliers	$	338,857	$	334,852
Issuance cost related to convertible promissory notes		-		64,802
Prepayment for land use right (i)		559,341		537,998
Security deposit (ii)		56,002		53,865
Prepaid consulting service fees (iii)		1,423,702		-
Prepaid market research fees (iv)		955,000		-
Others receivable (v)		27,868		72,110
Prepaid expenses and other current assets	$	3,360,770	$	1,063,627

NOTE 3 — ACCOUNTS RECEIVABLE

~~(i)~~Accounts receivable Onconsists ~~July 23, 2021, Sichuan Vtouch entered into a contract with Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase~~ of ~~a land use right of a parcel of land of 131,010 square feet for a consideration of RMB3,925,233 (equivalent to $559,341) for~~ the Company’s new facility. The Company paid the consideration in full by November 18, 2021. Upon issuance of a certificate of land use right by the local government, which is estimated to be obtained by the end of 2024, the Company will reclassify this prepayment to intangible assets accordingly.following:

(ii) On July 28, 2021, Sichuan Vtouch made a security deposit of RMB393,000 (equivalent to $56,002) to Chengdu Cross-Strait Science and Technology Industry Development Park Management Committee to obtain a construction license for its new facility. This deposit will be refunded upon the issuance of the construction license, which is expected to be the end of 2024.

	March 31, 2025		December 31, 2024
	(Unaudited)
Accounts receivable	$	11,101,555	$	7,504,630
Allowance for credit losses		-		-
Accounts receivable, net	$	11,101,555	$	7,504,630

~~(iii) In May 2023, the~~ The Company’s ~~entered~~accounts ~~into~~receivable ~~two~~primarily ~~third-party~~includes ~~consulting~~balance ~~service~~due ~~agreements~~from ~~for~~customers awhen ~~fee of $1.35 million and $3.1 million, respectively, for~~ the ~~three-year~~Company’s ~~consulting~~products ~~services.~~are ~~The~~sold ~~total fee would be amortized over the three-year services~~ and ~~reclassified~~ delivered to ~~stock issuance costs accordingly~~customers. ~~As of September 30, 2024, $1,423,702 was recognized as prepaid consulting service fees within one year.~~

(iv) On February 29, 2024, the Company advanced market research fees $70,000 and $855,000, respectively, to two unrelated individuals, Mr. Chien Hui Chueh and Mr. Cheung Ming Lin, in relation to the Company’s market research service overseas. The following ~~two~~table ~~individuals~~provides ~~entered~~an ~~into~~analysis ~~borrowing~~of ~~contracts with~~ the ~~Company~~aging ~~for~~of aaccounts ~~principal~~receivable ~~amount~~as of ~~$70,000~~March ~~and $855~~31,~~000,~~ 2025 ~~respectively, on February 29, 2024. Those contracts were issued to the Company to evidence the advances, bearing 3.45% interest per annum,~~ and ~~payable~~December ~~on February 28~~31, ~~2025.~~2024:

(v) Other receivables are mainly employee advances, and prepaid expenses.

	March 31, 2025		December 31, 2024
		(Unaudited)
Current	$	4,365,438	$	3,726,124
1-3 months past due		5,828,772		2,536,815
4-6 months past due		907,345		1,241,691
Total accounts receivable	$	11,101,555	$	7,504,630

~~F-8~~NOTE 4 — PREPAID EXPENSES AND OTHER CURRENT ASSETS

~~NOTE~~Prepaid expenses 5and —other ~~PROPERTY,~~current ~~PLANT~~assets ~~AND~~consist ~~EQUIPMENT, NET~~of the following:

	September 30, 2024			December 31, 2023
	March 31, 2025			December 31, 2024
Buildings	$	12,272		$	12,130
		(Unaudited)
Machinery and equipment		7,980			3,944
Advance to suppliers	$	210,757		$	252,618
Vehicles		41,724			41,241
Issuance cost related to convertible promissory notes		-			-
Construction in progress		13,094,588			12,825,896
Prepayment for land use right (i)		540,912			537,755
Subtotal		13,156,564			12,883,211
Security deposit (ii)		54,157			53,840
Less: accumulated depreciation		(31,116	)		(23,348	)
Prepaid consulting service fees (iii)		357,390			884,687
Property, plant and equipment, net	$	13,125,448		$	12,859,863
Prepaid market research fees (iv)		955,000			955,000
Others receivable (v)		48,937			78,680
Prepaid expenses and other current assets	$	2,167,153		$	2,762,580

~~Depreciation~~(i) ~~expense~~On ~~was~~July $223,~~561~~ 2021, Sichuan Vtouch entered into a contract with Chengdu Wenjiang District Planning and ~~$2,294~~Natural Resources Bureau for the ~~three~~purchase ~~months~~of ~~ended~~a ~~September~~land ~~30,~~use ~~2024~~right ~~and~~of ~~2023,~~a ~~respectively~~parcel of land of 131,010 ~~and~~square $7feet for a consideration of RMB3,~~307~~925,233 ~~and~~(equivalent to $9540,~~465~~912) for the ~~nine~~Company’s ~~months~~new ~~ended~~facility. ~~September~~The 30Company paid the consideration in full by November 18, ~~2024~~2021. ~~and 2023~~Upon issuance of a certificate of land use right by the local government, ~~respectively~~which is estimated to be obtained by the second half of 2026, the Company will reclassify this prepayment to intangible assets accordingly.

~~Pursuant~~(ii) toOn ~~local~~July ~~PRC~~28, ~~government~~2021, ~~guidelines~~Sichuan ~~on local~~Vtouch ~~environment~~made ~~issues~~a ~~and~~security ~~the~~deposit ~~national~~of ~~overall~~RMB393,000 ~~plan~~(equivalent to $54,157) ~~Sichuan~~to ~~Wetouch~~Chengdu ~~was~~Cross-Strait ~~subject~~Science and Technology Industry Development Park Management Committee to obtain a ~~government~~construction ~~directed~~license ~~relocation~~for ~~order~~its tonew ~~relocate by~~facility. noThis ~~later~~deposit ~~than~~will ~~December~~be ~~31,~~refunded ~~2021~~upon ~~with~~the ~~corresponding~~issuance ~~compensation.~~of Onthe ~~March~~construction 18license, ~~2021,~~which ~~pursuant~~is expected to be by the ~~agreement~~second ~~with~~half ~~the~~of ~~local~~2025. ~~government and~~(iii) anIn ~~appraisal~~May ~~report~~2023, ~~issued~~the byCompany aentered ~~mutual~~into ~~agreed~~two ~~appraiser,~~third-party ~~Sichuan~~consulting ~~Wetouch~~service ~~received~~agreements for a ~~compensation~~fee of ~~RMB115~~$1.235 million (and $163.41 million~~) (the~~, ~~“Compensation~~respectively, ~~Funds”)~~ for the ~~withdrawal~~three-year ofconsulting services. The total fee would be amortized over the ~~right~~three-year services and reclassified to ~~use~~stock issuance costs accordingly. As of ~~state-owned~~March ~~land~~31, (2025, the ~~“property”~~Company recognized $357,390 for this prepaid consulting service fees within one year. (iv) ~~and~~On February 29, 2024, the ~~demolition~~ ofCompany ~~all~~advanced ~~buildings~~market research fees $70,000 ~~facilities~~and $855,000, ~~equipment~~respectively, to two unrelated individuals, Mr. Chien Hui Chueh and ~~all~~Mr. ~~other~~Cheung ~~appurtenances~~Ming Lin, in relation to the Company’s market research service overseas. The two individuals signed borrowing contracts with a principal amount of $70,000 and $855,000, respectively, on February 29, 2024. Those contracts were issued to the ~~land~~Company to evidence the advances, bearing 3.45% interest per annum, and payable on February 28, 2025, and extended till August 29, 2026. (v) Other receivables are mainly employee advances, and prepaid expenses.

On March 16, 2021, in order to minimize interruption of the Company’s business, Sichuan Vtouch entered into a leasing agreement with Sichuan Renshou Shigao Tianfu Investment Co., Ltd. (later renamed as Meishan Huantian Industrial Co., Ltd.), a limited liability company owned by the local government, to lease the property, and all buildings, facilities and equipment thereon (the “Demised Properties) of Sichuan Wetouch, commencing from April 1, 2021 until December 31, 2021 at a monthly rent of RMB300,000 ($41,281). The lease was renewed on December 31, 2021 and August 9, 2024, respectively, with a monthly rent of RMB 400,000 ($57,000), the term of which has been extended to October 31, 2025 for the use of the Demised Properties.F-10

AsNOTE 5 of— ~~September 30~~PROPERTY, ~~2024,~~PLANT ~~the~~AND ~~Company~~EQUIPMENT, ~~had commitment of RMB5.0 million (equivalent to $0.7 million) for construction in progress of our new facility.~~NET

F-9

	March 31, 2025			December 31, 2024
		(Unaudited)
Buildings	$	11,868		$	11,798
Machinery and equipment		7,716			7,672
Vehicles		40,350			40,114
Construction in progress		12,830,673			12,755,791
Subtotal		12,890,607			12,815,375
Less: accumulated depreciation		(35,045	)		(32,378	)
Property, plant and equipment, net	$	12,855,562		$	12,782,997

~~NOTE~~Depreciation 6expense —was ~~RELATED~~$2,471 ~~PARTY~~and ~~TRANSACTIONS~~$2,316 for the three-month period ended March 31, 2025 and 2024, respectively

~~Amounts~~As ~~due~~of March 31, 2025, the Company had commitment of RMB5.0 million (equivalent to ~~related~~$0.7 ~~parties~~million) ~~were~~for asconstruction ~~follows:~~in progress of our new facility.

	Relationship	September 30, 2024		December 31, 2023		Note
Chengdu Wetouch Intelligent Optoelectronics Co., Ltd.	Affiliate of Ms. Jiaying Cai, director of the Company	$	382,163	$	-	Payable to affiliate for expenses paid on behalf of the Company
Chengdu Frejoo Enterprise Management Co., Ltd.	Affiliate of Jiaying Cai, director of the Company		52,413		-	Payable to affiliate for expenses paid on behalf of the Company
Total		$	434,576	$	-

NOTE 6 — OPERATING LEASE

~~Chengdu~~In March ~~Wetouch~~2021, ~~Intelligent~~pursuant ~~Optoelectronics~~to ~~Co., Ltd.~~the ~~was~~local ~~incorporated~~PRC government guidelines on ~~December~~local ~~30,~~environmental ~~2020~~issues inand ~~Chengdu~~the national plan, ~~Sichuan~~the ~~Province~~Company ~~under~~was under the ~~laws~~government directed relocation order to relocate from a parcel of ~~PRC~~state-owned land where we maintained our executive offices, ~~with~~research and Msdevelopment facilities and factories. ~~Jiaying~~The ~~Cai,~~Company received a ~~director~~total amount of ~~the~~RMB115.2 million (approximately $17.7 million) from ~~Company~~the aslocal ~~its~~government ~~sole~~(see ~~shareholder~~ITEM ~~holding~~2. ~~100%~~PROPERTIES AND FACILITIES) to start the construction of ~~its~~the ~~equity~~new ~~interests~~facility in a neighboring Chengdu Wenjiang District.

~~Chengdu~~On March ~~Frejoo~~16, ~~Enterprise~~2021, ~~Management~~in order to minimize interruption of the Company’s business, Sichuan Vtouch entered into a leasing agreement with Sichuan Renshou Shigao Tianfu Investment Co., Ltd. (later renamed as Meishan Huantian Industrial Co., Ltd.), a limited liability ~~was~~company ~~incorporated~~owned onby ~~March~~the 20local government, ~~2018~~to inlease ~~Chengdu~~the property, ~~Sichuan~~and ~~Province~~all ~~under~~buildings, facilities and equipment thereon (the ~~laws~~“Demised Properties) of ~~PRC~~Sichuan Wetouch, ~~with~~commencing Msfrom April 1, 2021 until December 31, 2021 at a monthly rent of RMB300,000 ($41,100), which period was extended to October 31, 2022. ~~Jiaying~~The ~~Cai~~lease was renewed on October 30, 2022, October 30, 2023 and August 9, 2024, respectively, with a ~~director~~monthly rent of RMB 400,000 ($54,800), the ~~Company as~~term ~~its~~of ~~major~~which ~~shareholder~~has ~~holding~~been ~~68%~~extended to October 31, 2025 for the use of ~~its~~the ~~equity~~Demised ~~interests~~Properties.

~~NOTE~~The Company’s 7new —facility ~~INCOME~~started ~~TAXES~~in August 2021 yet was delayed and suspended due to the outbreak of Covid-19 and government-ordered shutdowns in China. The Company has rescheduled and extended the completion by end of December 31, 2025 with the production at the new facilities will commencing in the second quarter of 2026. For the three months ended March 31, 2025, management makes estimates and assumptions to use the leasing property till the end of October 2026, and applies ASU 2016-02 “Leases (Topic 842) as practical expedients during the three months ended March 31, 2025.

~~Wetouch~~Both operating lease expense and short-term lease expense are recognized in cost of revenues and general and administrative expenses.

~~Wetouch~~The components isof ~~subject~~lease toexpense afor ~~tax~~the ~~rate~~three ofmonths ~~21%~~ended ~~per~~March ~~year beginning 2018~~31, 2025 and ~~files~~2024 awere ~~U.S.~~as ~~federal income tax return.~~follows:

BVI Wetouch

	For the Three Months Ended March 31,
	2025		2024
Lease expense		(Unaudited)		(Unaudited)
Operating lease expense	$	151,375	$	-
Short-term lease expense		-		147,729
Total lease expense	$	151,375	$	147,729

Under the current laws of the British Virgin Islands, BVI Wetouch, a wholly owned subsidiary of Wetouch, is not subject to tax on its income or capital gains. In addition, no British Virgin Islands withholding tax will be imposed upon the payment of dividends by the Company to its stockholders.F-11

~~Hong~~The balances ~~Kong~~for the operating leases where the Company is the lessee are presented as follows:

HK Wetouch is subject to profit taxes in Hong Kong at a progressive rate of 16.5%.

	March 31, 2025		December 31, 2024
		(Unaudited)
Operating lease right-of-use assets	$	952,398	$	1,055,208
Lease liabilities – current		599,654		571,539
Lease liabilities – non-current		352,744		482,606
Total operating lease liabilities	$	952,398	$	1,054,145

~~PRC~~The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2025:

Sichuan Vtouch files income tax returns in the PRC. Effective from January 1, 2008, the PRC statutory income tax rate is 25% according to the Corporate Income Tax (“CIT”) Law which was passed by the National People’s Congress on March 16, 2007.

	Operating lease
	(Unaudited)
2025 lease payment (from April 1, 2025 to December 31, 2025)	$	455,131
2026 lease payment		497,267
Less: imputed interest		-
Present value of lease liabilities	$	952,398

~~Sichuan~~Lease term ~~Vtouch~~and isdiscount ~~subject to a 25% income tax~~ rate.:

The effective income tax rates for the nine months ended September 30, 2024 and 2023 were 25.4% and 28.5%, respectively.

	For the Three Months Ended March 31,
	2025			2024
Weighted-average remaining lease term (years)	(Unaudited)
Operating lease		1.6			-

Weighted-average discount rate
Operating lease		1.09	%		-

~~The~~Supplemental ~~estimated~~cash ~~effective~~flow information ~~income~~related ~~tax~~to ~~rate~~leases ~~for~~where the ~~year~~ ~~ending~~Company ~~December~~was ~~31,~~the ~~2024~~lessee ~~would~~for ~~be similar to actual effective tax rate of~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2024.~~2025 was as follows:

F-10

	For the Three Months Ended March 31,
	2025		2024
	(Unaudited)
Cash payments for operating lease	$	151,375	$	-
Lease liabilities arising from obtaining right-of-use assets		47,251		-

~~NOTE 8 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES~~F-12

~~Accrued expenses and other current liabilities~~NOTE ~~consisted~~7 of— ~~the~~RELATED ~~following:~~PARTY TRANSACTIONS

	September 30, 2024		December 31, 2023
Advance from customers (i)	$	197,265	$	182,277
Accrued payroll and employee benefits		85,268		84,280
Accrued interest expenses		-		240,805
Accrued private placement agent fees (ii)		-		1,200,000
Accrued consulting fees (iii)		-		1,370,972
Accrued litigation charges (iv)		-		45,828
Accrued professional fees		72,207		330,180
Accrued director fees		106,516		106,824
Other payable		250,694		469,591
Other tax payables (v)		79,132		143,035
Others (vi)		9,530		288,704
Accrued expenses and other current liabilities	$	800,612	$	4,462,496

Amounts due to a related party are as follows:

(i)

RMB2,587,825 (equivalent to $365,465) of the beginning balance of advance from customers was recognized as revenues for the year ended December 31, 2023.

Relationship

March 31, 2025

December 31, 2024

Note

(ii)

On March 18, 2023, the Company entered into a private placement consent agreement with a third-party investment bank firm on the agent fees of $1.2 million, payable only on the completion of the private placement. The Company made the full payment in February 2024.

(Unaudited)

Chengdu Wetouch Intelligent Optoelectronics Co., Ltd.

Affiliate of Ms. Jiaying Cai, director of the Company

400,513

149,211

Payable to affiliate for expenses paid on behalf of the Company

Total

400,513

149,211

~~(iii)~~Chengdu InWetouch ~~May~~Intelligent ~~2023,~~Optoelectronics ~~the Company entered into two third-party consulting service agreements for a fee of $1~~Co.~~35 million and $3~~, Ltd.~~1 million~~, ~~respectively.~~was ~~The~~incorporated ~~Company~~on ~~made~~December ~~the~~30, ~~full~~2020 ~~payment~~ in ~~February~~Chengdu, ~~2024.~~Sichuan ~~Due~~Province tounder the ~~service~~laws of ~~three-year term~~PRC, ~~$316,378~~with ~~was~~Ms. ~~charged~~Jiaying toCai, ~~additional~~a ~~paid-in~~director ~~capital as the closing cost~~ of the Company ~~2024 Public Offering (~~as ~~defined~~its insole ~~Note~~shareholder ~~9),~~holding ~~and~~100% ~~the~~of ~~remaining~~its ~~was~~equity ~~recognized as consulting service fee over the service period~~interests.

(iv) During the year ended December 31, 2023, the Company accrued litigation compensation of RMB324,501 ($45,705) and court fee of RMB10,627 ($1,497). As of September 30, 2024, the Company made the full payment of RMB324,501 ($45,705) and reversed the court fee of RMB10,627 (1,497). For the details, please see NOTE 8 13 — ~~COMMITMENTS~~INCOME ~~AND CONTINGENCIES - Legal Proceedings - viii) and viiii).~~TAXES

~~(v) Other tax payable mainly represent value added tax payable.~~Wetouch

~~(vi)~~Wetouch is ~~Others~~subject ~~mainly~~to ~~represent~~a ~~accrued~~tax ~~employee~~rate ~~reimbursement~~of ~~payable~~21% per beginning 2018, and ~~other~~files ~~accrued~~a ~~miscellaneous~~U.S. ~~operating~~federal ~~expenses~~income tax return.

~~F-11~~BVI Wetouch

~~NOTE~~Under the 9current —laws ~~CONVERTIBLE~~of the British Virgin Islands, BVI Wetouch, a wholly owned subsidiary of Wetouch, is not subject to tax on its income ~~PROMISSORY~~or ~~NOTES~~capital ~~PAYABLE~~gains. In addition, no British Virgin Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.

a)Hong ~~Convertible promissory notes~~ Kong

InHK ~~October,~~Wetouch ~~November,~~is ~~and~~subject ~~December~~to ~~2021,~~profit ~~the~~taxes ~~Company, issued seven (7) convertible promissory notes (the “Notes”) of an aggregate principal amount of $2,250,000, due~~ in ~~one~~Hong ~~year~~Kong ~~with discounted issuance price~~ at ~~90.0%. The Notes bore interest at~~ a progressive rate of 816.~~0% per annum, payable in one year and matured on October 27, November~~ 5~~, November 16, November 24, November 29, and December 2, 2022, respectively~~%. Net proceeds after debt issuance costs and debt discounts were approximately $1,793,000. Debt issuance costs in the amount of $162,000 are recorded as deferred charges and included in the other current assets on the consolidated balance sheet. The debt discount and debt issuance costs are amortized into interest expense using the effective interest method over the terms of the Notes.

~~The details of the Notes are as follows:~~PRC

~~Unless~~Sichuan ~~the~~Wetouch ~~Notes~~and ~~are~~Sichuan ~~converted,~~Vtouch ~~the~~files ~~principal~~income ~~amounts~~tax ofreturns in the ~~Notes,~~PRC. ~~and~~Effective ~~accrued~~from ~~interest~~January at1, 2008, the ~~rate~~PRC ofstatutory 8%income ~~per~~tax ~~annum,~~rate ~~are~~is 25% ~~payable~~according onto the ~~one-year anniversary~~Corporate ofIncome ~~the~~Tax ~~issuance of the Notes~~ (~~the~~ “~~Maturity Date~~CIT”). IfLaw ~~the~~which ~~Company~~was ~~fails~~passed ~~to satisfy its loan obligation~~ by the ~~Maturity~~ ~~Date,~~National ~~the~~People’s ~~default~~Congress ~~interest~~on ~~rate~~March ~~will be the lesser of~~ 16~~% and the maximum amount permitted by law~~, 2007.

~~The~~Under PRC ~~Lenders~~CIT ~~have~~Law, ~~the right~~domestic toenterprises ~~convert~~and ~~any~~foreign orinvestment ~~all~~enterprises of (the ~~principal~~“FIEs”) ~~and~~are ~~accrued~~usually ~~interest~~subject onto ~~the~~a ~~Notes~~unified ~~into~~25% ~~shares~~enterprise income oftax ~~common~~rate ~~stock~~while ofpreferential ~~the~~tax ~~Company~~rates, ontax ~~the~~holidays ~~earlier of~~and ~~(i)~~even ~~180~~tax ~~calendar~~exemption ~~days~~may ~~after~~be ~~the~~granted ~~issuance~~on ~~date~~a ofcase-by-case ~~the~~basis ~~Notes~~by orlocal ~~(ii)~~government as ~~the~~preferential ~~closing~~tax oftreatment ato ~~listing~~High ~~for~~and ~~trading~~New ofTechnology Enterprises (the ~~common~~“HNTEs”). ~~stock~~Under ofthis ~~the~~preferential tax treatment, ~~Company~~HNTEs onare aentitled ~~national~~to ~~securities~~an ~~exchange~~income ~~offering~~tax ~~resulting~~rate inof ~~gross~~15%, ~~proceeds~~subject to ~~the~~a ~~Company~~requirement ofthat ~~$15,000,000~~they orre-apply ~~more~~for ~~(an~~their ~~“Uplist Offering”)~~HNTE status every three years. Pursuant Ifto an approval from the ~~Company~~local ~~closes~~tax anauthority ~~Uplist~~in ~~Offering~~October on2017, orSichuan ~~before~~Wetouch ~~the~~became ~~180th~~a ~~calendar~~qualified ~~date~~enterprise ~~after~~located in the ~~issuance date~~western region of the ~~Notes~~PRC, ~~the~~entitled ~~conversion~~it ~~price~~to ~~shall~~a bepreferential ~~70%~~income oftax ~~the~~rate ~~per~~of ~~share~~15% ~~offering~~from ~~price~~October in11, ~~the~~2017 ~~Uplist~~to ~~Offering;~~October ~~otherwise~~11, ~~the conversion price is $15~~2020.~~0 per share.~~

~~Subject~~On October to21, ~~customary exceptions~~2020, ifSichuan ~~the~~Wetouch ~~Company~~was ~~issues~~granted ~~shares~~on ora ~~any~~case-by-case ~~securities~~basis ~~convertible~~by ~~into~~Sichuan ~~shares~~Provincial ofgovernment ~~common~~as ~~stock at~~ an ~~effective~~HNTE ~~price~~, ~~per~~entitled ~~share~~to ~~lower~~a reduced ~~than~~income ~~the~~tax ~~conversion price of the Notes, the conversion~~ rate of ~~the~~15% ~~Notes~~from ~~shall~~October be21, ~~reduced~~2020 tountil ~~such~~October ~~lower~~20, ~~price~~2023.

Until the Notes are either paid or converted in their entirety, the Company agreed with the Lenders not to sell any securities convertible into shares of common stock of the Company (i) at a conversion price that is based on the trading price of the stock or (ii) with a conversion price that is subject to being reset at a future date or upon an event directly or indirectly related to the business of the Company or the market for the common stock. The Company also agreed to not issue securities at a future determined price.F-13

~~The Lenders have the~~Sichuan ~~right~~Vtouch tois ~~require~~subject ~~the Company~~ to ~~repay~~a ~~the~~25% ~~Notes~~income iftax ~~the Company receives cash proceeds, including proceeds from customers and the issuance of equity (including in the Uplist Offering)~~rate. ~~If the Company prepays the Notes prior to the Maturity Date, the Company shall pay a 10% prepayment penalty.~~

~~From~~The ~~December~~CIT ~~28,~~Law ~~2022~~and toits ~~April~~implementation 6,rules ~~2023~~impose a withholding income tax at 10%, ~~the~~unless ~~lenders~~reduced ofby ~~five~~a ~~outstanding~~tax ~~Notes~~treaty ~~and~~or arrangement, on the ~~Company~~amount of ~~entered~~dividends ~~into~~distributed ~~two~~by ~~amendments~~a PRC-resident enterprise to its immediate holding company outside the ~~Notes~~PRC ~~extending~~that are related to earnings accumulated ~~the~~beginning ~~term~~on ofJanuary ~~the~~1, ~~Notes~~2008. ~~for~~Dividends arelating ~~total~~to ofundistributed ~~additional~~earnings 6generated ~~months~~prior to January 1, 2008 are exempt from such withholding income tax.

~~From~~The ~~August 8 to September 7, 2023, the lenders of the outstanding Notes and the~~ Company ~~entered into an amendment to the Notes that upon the listing of the Company~~’s ~~common~~provision ~~stock~~for onincome ~~the~~taxes ~~Nasdaq~~credit ~~Capital Market~~ (~~the “Uplist”~~expenses), ~~the~~consisted ~~Company shall within three (3) business days after the Uplist, pay to the Holders amounts equal to 105%~~ of ~~the total outstanding balance of the Convertible Debenture.~~:

During the year ended December 31, 2023, principal and default charges totaling $1,200,000 were converted into 25,000 shares of common stock of the Company.

	For the Three Months Ended March 31,
PRC income tax	2025			2024
	(Unaudited)
Income tax provision	$	1,476,488		$	661,848
Deferred income tax expenses		(5,382	)		-
Total	$	1,471,106		$	661,848

US		-			-
BVI		-			-
Hong Kong		-			-
Income tax provision	$	1,471,106		$	661,848

~~During the year ended~~The ~~December~~following ~~31,~~table ~~2023,~~reconciles ~~principal,~~the ~~accrued~~PRC ~~and~~statutory ~~unpaid~~rates ~~interest~~to ~~and~~the ~~default~~Company’s ~~charges~~effective ~~totaling~~tax ~~$1,038,426~~rate ~~were~~for ~~converted into 69,228 shares of common stock of~~ the ~~Company.~~three ~~Two~~months ~~notes~~March ~~were~~31, ~~fully~~2025 ~~converted.~~and 2024:

F-12

	For the Three Months Ended March 31,
	2025			2024
	(Unaudited)
PRC statutory income tax rate		25.0	%		25.0	%
Income tax computed at PRC statutory corporate income tax rate of 25%		31.6	%		55.2	%
Tax rate differential on entities not subject to PRC income		(1.1	)%		(4.8	)%
R&D additional deduction		0.0	%		(0.9	)%
Change in valuation allowance		0.0	%		0.2	%
Temporary differences		(0.1	)%		1.4	%
Non-deductible expenses		6.1	%		3.1	%
Effective tax rate		36.5	%		54.2	%

OnThe Company ~~February~~follows 23ASC 740, ~~2024~~“Income Taxes”, ~~immediately~~which ~~upon~~requires the ~~closing~~recognition of ~~the~~deferred ~~public~~tax ~~offering~~assets and liabilities for the expected (future tax consequences of events that have been included in the ~~“2024~~financial ~~Public~~statements ~~Offering”)~~or tax returns. Under this method, deferred income taxes are recognized for the ~~Company~~tax ~~made~~consequences ain ~~full~~future ~~payment~~years of ~~$2,586,960~~differences ~~under~~between the ~~remaining~~tax ~~five~~bases ~~outstanding~~of ~~promissory~~assets and liabilities and their ~~notes,~~financial ~~including~~reporting ~~the~~amounts ~~principal~~at ofeach ~~$1,400,750~~period end based on enacted tax laws and statutory tax rates, applicable to the ~~related~~periods ~~accrued~~in ~~interests~~which the ~~and~~differences ~~default~~are ~~charges~~expected ofto $1affect taxable income. Valuation allowances are established,~~186~~ when necessary,~~210~~ to reduce deferred tax assets to the amount expected to be realized.

~~During the nine months ended September 30, 2024 and 2023, amortization of discounts and issuance cost of the notes were $5,715 and $24,121, respectively.~~F-14

~~For~~The ~~the~~Company’s ~~three~~deferred ~~months~~tax ~~ended~~assets ~~September~~consisted ~~30, 2024 and 2023, the Company recognized interest expenses~~ of the ~~Notes~~following ~~in the amount of nil and $139,876, respectively.~~components:

For the nine months ended September 30, 2024 and 2023, the Company recognized interest expenses of the Notes in the amount of $1,169,974 and $211,383, respectively.

	As of March 31, 2025			As of December 31, 2024
Deferred tax assets:	(Unaudited)
Credit loss on advance to vendors	$	24,453		$	11,056
Provision of obsolete inventory		22,582			30,607
Leasing liabilities		238,099			263,536
Total gross deferred tax assets		285,134			305,199
Less valuation allowance		-
Deferred tax assets net of valuation allowance		285,134			305,199

Deferred tax liabilities:
Right-of-use assets		(238,099	)		(263,802	)
Deferred tax liabilities		(238,099	)		(263,802	)
Deferred tax assets, net	$	47,035		$	41,397

b)The ~~Warrants~~Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. As of March 31, 2025 and December 2024, taxes for Sichuan Vtouch remained open for statutory examination by PRC tax authorities.

~~Accounting for~~NOTE ~~Warrants~~9 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

InAccrued ~~connection~~expenses ~~with~~and ~~the~~other ~~issuance~~current ofliabilities ~~the~~consist ~~Notes, the Company also issued to the lenders seven (7) three-year warrants (the “Note Warrants”) to purchase an aggregate~~ of ~~90,000 shares of~~ the ~~Company’s common stock (the “Warrant Shares”).~~ following:

The Note Warrants issued to the lenders granted the holders the rights to purchase up to 10,000 shares of common stock of the Company at an exercise price of $25 per share. However, if the Company closes an Uplist Offering on or before the 180th calendar date after the issuance date of the Note Warrants, then the exercise price shall be 125% of the offering price of a share in the Uplist Offering. If the adjusted exercise price as a result of the Uplist Offering is less than $25 per share, then the number of shares for which the Warrants are exercisable shall be increased such that the total exercise price, after taking into account the decrease in the per share exercise price, shall be equal to the total exercise price prior to such adjustment.

	March 31, 2025		December 31, 2024
		(Unaudited)
Advance from customers	$	167,513	$	166,535
Accrued payroll and employee benefits		82,318		81,837
Accrued legal compensation charges (i)		-		35,356
Accrued professional fees		147,737		57,173
Accrued director fees		86,171		66,734
Other payable to third parties		629,694		147,102
Other tax payables (ii)		296,946		162,888
Others (v)		148,236		248,836
Accrued expenses and other current liabilities	$	1,558,615	$	966,461

~~The~~(i) ~~lenders~~Other ~~have~~tax ~~the right~~payable tomainly ~~exercise~~represent ~~the~~value ~~Note~~added ~~Warrants~~tax on a cashless basis if the highest traded price of a share of common stock of the Company during the 150 trading days prior to exercise of the Note Warrants exceeds the exercise price, unless there is an effective registration statement of the Company which covers the resale of the Lenderspayable.

If(ii) ~~the~~Others ~~Company~~mainly ~~issues shares~~represent oraccrued ~~any~~employee ~~securities~~reimbursement ~~convertible~~payable ~~into~~and ~~shares~~other ataccrued anmiscellaneous ~~effective~~operating ~~price per share lower than the exercise price of the Note Warrants, the exercise price of the Note Warrants shall be reduced to such lower price, subject to customary exceptions~~expenses.

The lenders may not convert the Notes or exercise the Note Warrants if such conversion or exercise will result in each of the lenders, together with any affiliates, beneficially owning in excess of 4.9% of the Company’s outstanding shares of common stock immediately after giving effect to such exercise unless such lender notifies the Company at least 61 days prior to such exercise.F-15

~~During the year ended~~NOTE ~~December~~10 ~~31,~~— ~~2023,~~CONVERTIBLE ~~two~~PROMISSORY ~~lenders~~NOTES ~~exercised the Note Warrants cashlessly for 22,338 shares of common stock.~~PAYABLE

~~During the nine months~~a) ~~ended~~Convertible ~~September~~promissory ~~30, 2024, one lender exercised the Note Warrants cashlessly for 2,725 shares of common stock.~~notes

~~F-13~~In October, November, and December 2021, the Company, issued seven (7) convertible promissory notes (the “Notes”) of an aggregate principal amount of $2,250,000, due in one year with discounted issuance price at 90.0%. The Notes bore interest at a rate of 8.0% per annum, payable in one year and matured on October 27, November 5, November 16, November 29, and December 2, 2022, respectively. Net proceeds after debt issuance costs and debt discounts were approximately $1,793,000. Debt issuance costs in the amount of $162,000 are recorded as deferred charges and included in the other current assets on the consolidated balance sheet. The debt discount and debt issuance costs are amortized into interest expense using the effective interest method over the terms of the Notes.

~~The~~Unless the ~~fair~~Notes ~~values~~are ofconverted, ~~these warrants~~the asprincipal amounts of ~~September~~the 30Notes, ~~2024~~and ~~were~~accrued ~~calculated~~interest ~~using~~at the ~~Black-Scholes~~rate ~~option~~of 8% per annum, are payable on the one-~~pricing~~year anniversary ~~model~~of ~~with~~the issuance of the ~~following~~Notes ~~assumptions:~~(the “Maturity Date”). If the Company fails to satisfy its loan obligation by the Maturity Date, the default interest rate will be 16%.

												September 30, 2024
	Volatility (%)			Expected dividends yield (%)			Weighted average expected life (year)		Risk-free interest rate (%) (per annum)			Common stock purchase warrants liability as of December 31, 2023 ($)		Changes in fair value of common stock purchase warrants liability (+ loss/(- (gain) ($)			Common stock purchase warrants liability as of September 30, 2024 ($)
Convertible Note - Talos Victory (Note 9 (a))		567.0	%		0.0	%		0.6		5.03	%	$	43,113	$	(27,995	)	$	15,118
Convertible Note - First Fire (Note 9 (a))		567.0	%		0.0	%		0.6		5.03	%		98,375		(45,422	)		52,953
Convertible Note - LGH (Note 9 (a))		567.0	%		0.0	%		0.6		5.03	%		98,517		(39,999	)		58,518
Convertible Note - Fourth Man (Note 9 (a))		567.0	%		0.0	%		0.7		5.03	%		41,639		(15,628	)		26,011
Convertible Note - Jeffery Street (Note 9 (a))		567.0	%		0.0	%		0.7		5.03	%		26,264		(9,408	)		16,856
Convertible Note - Blue Lake (Note 9 (a))		567.0	%		0.0	%		0.7		5.03	%		70,463		(25,240	)		45,223
Total										Total		$	378,371	$	(163,692	)	$	214,679

The Lenders have the right to convert any or all of the principal and accrued interest on the Notes into shares of common stock of the Company on the earlier of (i) 180 calendar days after the issuance date of the Notes or (ii) the closing of a listing for trading of the common stock of the Company on a national securities exchange offering resulting in gross proceeds to the Company of $15,000,000 or more (an “Uplist Offering”). If the Company closes an Uplist Offering on or before the 180^th calendar date after the issuance date of the Notes, the conversion price shall be 70% of the per share offering price in the Uplist Offering; otherwise, the conversion price is $15.0 per share.

~~(c)~~Subject to ~~Registration~~customary exceptions, if the Company issues shares or any securities convertible into shares of common stock at an effective price ~~Rights~~per ~~Agreements~~share lower than the conversion price of the Notes, the conversion rate of the Notes shall be reduced to such lower price.

~~Pursuant~~Until the toNotes ~~the~~are ~~terms~~either ofpaid ~~the~~or ~~Registration~~converted ~~Rights Agreements~~in ~~between~~their entirety, the Company ~~and~~agreed ~~lenders~~with of the ~~Notes,~~Lenders ~~the~~not ~~Company~~to ~~agreed~~sell toany ~~file~~securities aconvertible into ~~registration~~shares ~~statement~~of ~~with~~common stock of the ~~Securities~~Company ~~and~~(i) ~~Exchange Commission~~at toa ~~register~~conversion price that is based on the ~~shares~~trading price of ~~common~~the stock ~~underlying~~or ~~the~~(ii) ~~Notes~~with ~~and~~a ~~the~~conversion price ~~shares~~that ~~issuable~~is ~~upon~~subject ~~exercise~~to ofbeing ~~the~~reset ~~Note~~at ~~Warrants~~a ~~within sixty~~future ~~days~~date ~~from~~or upon an event directly or indirectly related to the ~~date~~business of ~~each~~the ~~Registration~~Company or ~~Rights~~the ~~Agreement~~market for the common stock. The Company also ~~granted~~agreed ~~the~~to ~~lenders~~not ~~piggyback~~issue ~~registration rights on such~~ securities ~~pursuant~~at toa ~~the~~future ~~Purchase~~determined ~~Agreements~~price.

~~NOTE~~The Lenders 10have —the ~~STOCKHOLDERS’~~right ~~EQUITY~~to require the Company to repay the Notes if the Company receives cash proceeds, including proceeds from customers and the issuance of equity (including in the Uplist Offering). If the Company prepays the Notes prior to the Maturity Date, the Company shall pay a 10% prepayment penalty.

From December 28, 2022 to April 6, 2023, the lenders of five outstanding Notes and the Company entered into an amendment to the Notes (“Amendment No. 1 to Promissory Note”) ~~Common~~extending ~~Stock~~the term of the Notes for an additional 6 months.

~~The~~From August 29 to September 9, 2023, the lenders of the outstanding Notes and the Company’s ~~authorized~~entered ~~shares~~into an amendment to the Notes (“Amendment No. 2 to Promissory Note”) that upon the listing of the Company’s common stock ~~was~~on 15the Nasdaq Capital Market (the “Uplist”),~~000~~ the Company shall within three (3) business days after the Uplist,~~000~~ ~~shares~~pay ~~with~~to ~~par~~the ~~value~~Holders amounts equal to 105% of $0the total outstanding balance of the Convertible Debenture.~~001.~~

OnDuring the year ended December 2231, ~~2020~~2023, ~~the~~principal ~~Company~~and ~~issued~~default ~~5,181 shares~~charges oftotaling ~~common~~$1,200,000 ~~stock~~were toconverted ~~The~~into ~~Crone Law Group~~25,000 ~~P.C.~~shares orof ~~its~~common ~~designees~~stock of ~~for~~the ~~legal services (see Note 11)~~Company.

OnDuring the ~~January~~year 1ended December 31, ~~2021~~2023, ~~the~~principal, ~~Company~~accrued ~~issued~~and anunpaid ~~aggregate of~~interest 15and default charges totaling $1,~~541~~038,426 ~~shares~~were toconverted ainto 69,228 ~~third~~shares ~~party~~of ~~service~~common ~~provider~~stock ~~for~~of ~~consulting~~the ~~services~~Company. ~~that~~Two ~~had~~notes ~~been~~were ~~rendered~~fully converted.

On ~~April~~February 1423, ~~April~~2024, immediately 27upon ~~and~~the ~~September~~closing 1,of ~~2022~~the 2024 Public Offering, the Company ~~issued~~made ~~5,777,~~a ~~5,599~~full ~~and~~payment of $2,~~857~~586,960 ~~shares~~under ofthe ~~common~~remaining ~~stock~~five ~~upon~~outstanding promissory ~~cashless~~notes, ~~exercise~~including the principal of $1,400,750 and the ~~Note~~related ~~Warrants~~accrued tointerests ~~three~~and ~~lenders,~~default ~~respectively~~charges of $1,186,210. There were ~~(see~~no ~~Note~~convertible 9promissory ~~(b))~~notes as of February 23, 2024.

During the ~~year~~three months ended ~~December~~ March 31, ~~2022,~~2025 ~~the~~and ~~Company issued 6~~2024,~~211~~ ~~shares~~amortization of ~~common~~discounts ~~stock~~and toissuance acost ~~third~~of ~~party~~the ~~upon~~notes ~~exercise~~were ofnil ~~warrants~~and ~~(see~~$5,715, ~~Note 11)~~respectively.

~~During~~ For the ~~year~~three-month period ended ~~December~~ March 31, ~~2022,~~2025 ~~the~~and ~~Company issued 69~~2024,~~228~~ ~~shares~~nil ofand ~~common~~US$1,169,974 interest ~~upon~~expenses ~~conversion~~ of ~~convertible~~the ~~promissory~~Notes ~~note~~were ~~payable~~recognized, ~~(see note 9 (a))~~respectively.

On January 19, 2023, the Company sold an aggregate of 8,000,000 shares of common stock to purchasers in a private placement for an aggregate purchase price of $40,000,000, or $5.00 per share. On January 20, 2023, the Company received net proceeds of $40 million accordingly.F-16

~~F-14~~b) Warrants

~~During the year ended December 31, 2023, the Company issued 25,000~~Accounting ~~shares~~for ~~of common stock upon conversion of convertible promissory note payable (see note 9 (a)).~~Warrants

~~During~~In connection with the ~~year~~issuance ~~ended~~of ~~December~~the 31Notes, ~~2023,~~ the Company also issued ~~22,338 shares~~to ofthe ~~common~~lenders ~~stock~~seven (7) three-year warrants (the “Note Warrants”) to ~~two~~purchase ~~third~~an ~~parties~~aggregate ~~upon~~of ~~exercise~~90,000 shares of ~~warrants~~the ~~(see~~Company’s ~~Note~~common 9stock (bthe “Warrant Shares”)).

~~On February~~The ~~20,~~Note ~~2024,~~Warrants issued to the ~~Company~~lenders ~~issued~~granted 2the holders the rights to purchase up to 10,~~160,~~000 shares of common stock atof athe ~~public~~Company ~~offering~~at an exercise price of $~~5.00~~25 per share. inHowever, if the ~~2024~~Company ~~Public~~closes an Uplist Offering on or before the 180th calendar date after the issuance date of the Note Warrants, then the exercise price shall be 125% of the offering price of a share in the Uplist Offering. ~~The~~If ~~Company’s~~the ~~common~~adjusted ~~stock~~exercise ~~began~~price ~~trading~~as ona result of the ~~Nasdaq~~Uplist ~~Capital~~Offering ~~Market~~is ~~under~~less than $25 per share, then the ~~ticker~~number ~~symbol~~of ~~“WETH”~~shares onfor ~~February~~which 21the Warrants are exercisable shall be increased such that the total exercise price, after taking into account the decrease in the per share ~~2024~~exercise price, shall be equal to the total exercise price prior to such adjustment.

AsThe lenders have the right to exercise the Note Warrants on a cashless basis if the highest traded price of ~~September~~a ~~30,~~share of common stock of the ~~2024~~Company during the 150 trading days prior to exercise of the Note Warrants exceeds the exercise price, unless there ~~were~~is ~~11,931,534~~an ~~shares~~effective registration statement of ~~common~~the ~~stock issued and~~Company ~~outstanding~~which covers the resale of the Lenders.

2)If the ~~Reverse~~Company ~~Stock~~issues ~~Split~~shares or any securities convertible into shares at an effective price per share lower than the exercise price of the Note Warrants, the exercise price of the Note Warrants shall be reduced to such lower price, subject to customary exceptions.

~~On February 17, 2023, the Company’s board~~The oflenders ~~directors~~may ~~authorized a reverse stock split of common stock with a ratio of~~ not ~~less~~convert ~~than~~the ~~one~~Notes toor ~~five~~exercise ~~(1:5)~~the ~~and~~Note ~~not~~Warrants ~~more~~if ~~than~~such ~~one~~conversion ~~to eighty~~or ~~(1:80),~~exercise ~~with~~will ~~the~~result ~~exact~~in ~~amount~~each ~~and the timing~~ of the ~~reverse~~lenders, ~~stock~~together with ~~split~~any toaffiliates, bebeneficially ~~determined~~owning byin ~~the~~excess ~~Chairman~~ of ~~the Board~~4.9% ~~Upon effectiveness~~ of ~~such reverse stock split,~~ the ~~number~~Company’s ofoutstanding ~~authorized~~ shares of ~~the~~ common stock ofimmediately ~~the Company will also be decreased in the same ratio.~~after ~~Pursuant~~giving effect to ~~Section~~such ~~78.209~~exercise ofunless ~~the~~such ~~Nevada~~lender ~~Revised~~notifies ~~Statutes,~~ the ~~reverse~~Company ~~stock~~at ~~split~~least ~~does~~61 ~~not~~days ~~have~~prior to besuch ~~approved by the stockholders of the Company~~exercise.

~~On July 16, 2023, the Company’s board of~~During ~~directors approved~~ the ~~reverse~~year ~~stock~~ended ~~split~~December ~~of the Company’s common stock at a ratio of 1-for-20. On July 16~~31, 2023, ~~the~~two ~~Company~~lenders ~~filed a~~exercised ~~certificate of change (with an effective date of July 16, 2023) with~~ the ~~Nevada~~Note ~~Secretary~~Warrants ofcashlessly ~~State pursuant to Section 78.209 of the Nevada Revised Statutes to effectuate a 1-~~for~~-20~~ ~~reverse~~22,338 ~~stock~~shares ~~split~~ of ~~its~~ common stock. On September 11, 2023, the reverse stock split was approved by the Financial Industry Regulatory Authority and took effect on September 12, 2023. All share information included in this Quarterly Report has been adjusted as if the reverse stock split occurred as of the ~~earliest period presented~~Company.

3)During the ~~Closing~~three ofmonths ~~the~~ended March 31, 2024, ~~Public~~one ~~Offering~~lender exercised the Note Warrants cashlessly for 2,725 shares of common stock.

~~On February~~As ~~23,~~the ~~2024,~~Note ~~the~~Warrant ~~Company~~was ~~closed~~issued ~~its~~in ~~offering~~2021 ofand ~~2,160,000~~was ~~shares~~valid offor ~~common~~three ~~stock~~years, atthe aremaining ~~public~~38430 ~~offering~~Note ~~price~~Warrant ofwas ~~$5.00~~expired ~~per~~during ~~share,~~the ~~for~~year ~~aggregate~~ended ~~gross~~December ~~proceeds of $10.8 million before deducting underwriting discounts~~31, ~~and other offering expenses~~2024.

~~The Company complies with~~ During the ~~requirements~~three ~~of FASB~~months ~~ASC~~ended ~~Topic~~March ~~340-10-S99-1~~31, ~~“Other~~2024, ~~Assets~~the ~~and~~Company ~~Deferred~~recorded ~~Costs – SEC Materials” (“ASC 340-10-S99”) and SEC Staff Accounting Bulletin Topic 5A~~$7,821 ~~“Expenses~~gain ofon ~~Offering”,~~changes ~~and~~in ~~charged~~the ~~issuance~~fair ~~costs~~value of ~~$1,810,246~~common tostock ~~additional~~purchase ~~paid-in~~warrants ~~capital~~liability ~~during~~using the ~~nine~~Black-Scholes ~~months~~option-pricing ~~ended September 30, 2024~~model.

~~F-15~~(c) Registration Rights Agreements

~~NOTE~~Pursuant to 11the —terms ~~SHARE~~of ~~BASED~~the ~~COMPENSATION~~Registration Rights Agreements between the Company and lenders of the Notes, the Company agreed to file a registration statement with the Securities and Exchange Commission to register the shares of common stock underlying the Notes and the shares issuable upon exercise of the Note Warrants within sixty days from the date of each Registration Rights Agreement. The Company also granted the lenders piggyback registration rights on such securities pursuant to the Purchase Agreements.

~~The Company applied ASC 718 and related interpretations in accounting for measuring the cost of share~~F-based compensation over the period during which the consultants are required to provide services in exchange for the issued shares. The fair value of above award was estimated at the grant date using the Black-Scholes model for pricing the share compensation expenses.17

OnNOTE ~~December~~11 ~~22,~~— ~~2020,~~STOCKHOLDERS’ the board of directors of the Company authorized the issuance of an aggregate of 5,181 shares and warrants to purchase an aggregate of 10,518 shares of common stock to The Crone Law Group, P.C. or its designees for legal services that had been rendered. The five-year warrants are exercisable at one cent per share.EQUITY

~~5,181~~1) ~~shares~~Common of common stock underlying such warrants were vested on December 22, 2020 and 6,211 shares were issued upon exercise of these warrants on September 21, 2022 and warrant to purchase 4,307 shares remained outstanding for The Crone law Group, P.C. or its designees for legal services. The fair value of above award was estimated at the grant date using Black-Scholes model for pricing the share compensation expenses. The fair value of the Black-Scholes model includes the following assumptions: expected life of 2.5 years, expected dividend rate of 0%, volatility of 43.5% and an average interest rate of 0.11%.Stock

OnThe ~~January 1, 2021, the board of directors of the~~ Company’s authorized ~~the~~shares ~~issuance~~ of ancommon stock ~~aggregate~~was of 15,~~541~~000,000 shares ~~and~~with ~~warrants~~par tovalue ~~purchase 31,554 shares~~ of ~~common stock to a third party service provider for consulting services that had been rendered~~$0.001 ~~These~~as ~~warrants~~of ~~have~~the adate ~~five-year~~of ~~term~~this ~~and~~quarterly ~~are exercisable at one cent per share~~report.

~~The~~On 15December 22,~~541~~ 2020, the Company issued 5,181 shares of common stock ~~and warrants~~ to ~~purchase~~The 31Crone Law Group,~~554~~ ~~shares~~P.C. ofor ~~commons~~its ~~stock~~designees ~~vested~~for onlegal ~~January~~services 1,(see ~~2021~~Note 12).

~~The~~On ~~fair~~January ~~value~~1, of2021, the ~~above~~Company ~~warrants~~issued ~~was~~an ~~estimated~~aggregate ~~at the grant date using Black-Scholes model for pricing the share compensation expenses. The fair value~~ of ~~the Black-Scholes model includes the following assumptions: expected life of 2.5 years~~15,541 ~~expected~~shares ~~dividend~~to ~~rate~~a ofthird ~~0%,~~party ~~volatility~~service ofprovider ~~51.3%~~for ~~and~~consulting anservices ~~average~~that ~~interest~~had ~~rate of~~been 0rendered.~~12%.~~

~~During~~On ~~the~~April ~~nine~~14, ~~months~~April ~~ended~~27 and September 301, ~~2024~~2022, the ~~warrants~~Company ~~for~~issued 355,~~861~~777, 5,599 and 2,857 shares of common stock ~~related~~upon tocashless ~~above~~exercise ~~mentioned~~of ~~services~~the ~~were~~Note ~~exercised.~~Warrants ~~There~~to ~~were~~three nolenders, ~~warrants related to services~~respectively. ~~remaining~~(see asNote of10 ~~September 30, 2024~~(b)).

AsDuring ofthe ~~September~~year 30ended December 31, ~~2024 and 2023~~2022, the Company ~~recognized~~ ~~relevant~~issued ~~share-based~~6,211 ~~compensation~~shares ~~expense~~ of ~~nil~~common ~~and~~stock ~~nil~~to ~~for~~a ~~the~~third ~~vested~~party ~~shares,~~upon ~~and~~exercise ~~nil~~of ~~and~~warrants ~~nil~~(see ~~for~~Note ~~the warrants, respectively~~12).

~~F-16~~During the year ended December 31, 2022, the Company issued 69,228 shares of common upon conversion of convertible promissory note payable (see Note 10 (a)).

~~NOTE~~On 12January —19, ~~RISKS~~2023, the ~~AND~~Company ~~UNCERTAINTIES~~sold an aggregate of 8,000,000 shares of common stock to purchasers in a private placement for an aggregate purchase price of $40,000,000, or $5.00 per share. On January 20, 2023, the Company received net proceeds of $40 million accordingly.

~~Credit~~During ~~Risk~~the –year ~~The~~ended ~~carrying amount~~December of31, ~~accounts~~2023, ~~receivable included in~~ the ~~balance sheet represents the~~ Company’s ~~exposure~~issued to25,000 shares ~~credit~~of ~~risk~~common instock ~~relation~~upon toconversion ~~its financial~~of ~~assets.~~convertible Nopromissory ~~other~~note ~~financial~~payable ~~asset~~(see ~~carries~~Note 10 (a)). ~~significant~~During ~~exposure~~the toyear ~~credit~~ended ~~risk.~~December ~~The~~31, 2023, the Company ~~performs~~issued ~~ongoing~~22,338 ~~credit~~shares ~~evaluations~~ of ~~each~~common ~~customer’s~~stock ~~financial~~to ~~condition.~~two ~~The~~third ~~Company~~parties ~~maintains~~upon ~~allowances~~exercise ~~for~~of ~~doubtful~~warrants ~~accounts~~(see ~~and~~Note ~~such~~10 ~~allowances in the aggregate have not exceeded management’s estimates~~(b)).

~~The~~On ~~Company has its cash in bank deposits primarily~~February at20, ~~state owned banks located in the PRC. Historically~~2024, ~~deposits in PRC banks have been secured due to~~ the ~~state~~Company ~~policy~~issued ~~of protecting depositors’ interests. The PRC promulgated a Bankruptcy Law in August 2006~~2, ~~effective June 1~~160,000 ~~2007,~~shares ~~which~~of ~~contains~~common ~~provisions~~stock ~~for~~at ~~the~~a ~~implementation of~~public ~~measures~~offering ~~for~~price ~~the bankruptcy~~ of ~~PRC~~$5.00 ~~banks~~per share. The ~~bank~~Company’s ~~deposits~~common stock ~~with~~began ~~financial~~trading ~~institutions~~on in the ~~PRC~~Nasdaq ~~are~~Capital ~~insured~~Market byunder the ~~government~~ticker ~~authority for~~symbol up“WETH” toon ~~RMB500~~February 21,~~000~~ 2024.

~~Interest~~As ~~Rate~~of ~~Risk – The Company~~March is31, ~~exposed~~2025 toand ~~the~~December ~~risk~~31, ~~arising~~2024, ~~from~~there ~~changing~~were ~~interest rates~~11,931,534 ~~which~~shares ~~may affect the ability~~ of ~~repayment~~common ~~of existing debts~~ stock issued and ~~viability of securing future debt instruments within the PRC~~outstanding.

Currency Risk - A majority of the Company’s revenue and expense transactions are denominated in RMB and a significant portion of the Company’s assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”2)~~. Remittances~~ inReverse ~~currencies~~Stock other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.Split

~~Concentrations~~On -February ~~The~~17, 2023, the Company’s ~~sells~~board ~~its~~of ~~products~~directors ~~primarily~~authorized toa ~~customers~~reverse instock ~~the~~split ~~PRC~~of ~~and~~common tostock ~~some~~with ~~extent,~~a ~~the~~ratio ~~overseas~~of ~~customers~~not inless ~~European~~than ~~countries~~one to five (1:5) and ~~East~~not ~~Asia,~~more ~~such~~than asone to ~~South~~eighty ~~Korea~~(1:80), with the exact amount and ~~Taiwan.~~the ~~For~~timing of the ~~three~~reverse ~~months~~stock ~~ended~~split ~~September~~to ~~30,~~be ~~2024,~~determined ~~five~~by ~~customers~~the ~~accounted~~Chairman ~~for~~of ~~approximately~~the 21Board.~~4%,~~ ~~19.5%,~~Upon ~~15.9%,~~effectiveness ~~14.4%~~of ~~and~~such ~~12.0%,~~reverse ~~respectively~~stock split, the number of ~~the~~authorized ~~Company’s~~shares ~~total~~of ~~revenue.~~the ~~For~~common stock of the ~~three-month~~Company ~~periods~~will ~~ended~~also ~~September~~be ~~30,~~decreased ~~2023,~~in ~~five~~the ~~customers~~same ratio. ~~accounted~~Pursuant ~~for~~to ~~approximately~~Section 2078.~~5%, 17.4%, 15.7%, 15.6%~~209 ~~and 12.3%%,~~of ~~respectively~~the Nevada Revised Statutes, ofthe reverse stock split does not have to be approved by the ~~Company’s~~stockholders ~~revenue~~of the Company.

~~For~~On ~~the~~July ~~nine~~16, ~~months~~2023, ~~ended~~the ~~September~~Company’s ~~30,~~board ~~2024,~~of ~~five~~directors ~~customers~~approved ~~accounted~~the ~~for~~reverse ~~approximately~~stock ~~21.7%,~~split ~~19.9%,~~of ~~15.4%,~~the ~~14.0%~~Company’s ~~and~~common 11stock at a ratio of 1-for-20.7% On July 16, ~~respectively~~2023, of the Company’s ~~total~~filed a ~~revenue.~~certificate ~~For the~~of ~~nine~~change ~~months~~(with ~~ended~~an ~~September~~effective 30date of July 16, 2023,) ~~five~~with ~~customers~~the ~~accounted~~Nevada ~~for approximately~~Secretary 22of State pursuant to Section 78.~~0%, 16.~~209 of the Nevada Revised Statutes to effectuate a 1~~%, 15~~-for-20 reverse stock split of its common stock.9% On September 11, ~~14.4%~~ 2023, the reverse stock split was approved by the Financial Industry Regulatory Authority and ~~11.6%~~ took effect on September 12, 2023. All share information included in this ~~respectively,~~report has been adjusted as if the reverse stock split occurred as of the ~~Company’s~~earliest ~~revenue~~period presented.

The Company’s top ten customers aggregately accounted for 99.95% and 99.8% of the total revenue for the three months ended September 30, 2024 and 2023, and approximately 99.4% and 99.6% for the nine months ended September 30, 2024 and 2023. As of September 30, 2024, seven customers accounted for approximately 19.7%, 17.3%, 16.6%, 11.9%, 11.4%, 11.0% and 10.4% of the total accounts receivable balance, respectively. F-18

~~The Company purchases its raw materials through various suppliers.~~3) ~~Raw~~Closing ~~material purchases from these suppliers which individually exceeded 10%~~ of the ~~Company’s total raw material purchases, accounted for an aggregate of approximately 23.8% (two suppliers) and 23.0% (two suppliers) for the three months ended September 30,~~ 2024 ~~and~~Public ~~2023, respectively, and approximately 39.55% (three suppliers) and 11.9% (one supplier) for the nine months ended September 30, 2024 and 2023, respectively.~~Offering

~~F-17~~On February 23, 2024, the Company closed its offering of 2,160,000 shares of common stock at a public offering price of $5.00 per share, for aggregate gross proceeds of $10.8 million before deducting underwriting discounts, and other offering expenses.

~~NOTE~~The Company 13complies —with ~~COMMITMENTS~~the ~~AND~~requirements ~~CONTINGENCIES~~of FASB ASC Topic 340-10-S99-1, “Other Assets and Deferred Costs – SEC Materials” (“ASC 340-10-S99”) and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering”, and charged issuance costs of $1,810,246 to additional paid-in capital during the year ended December 31, 2024.

~~Contingencies~~4) Statutory Reserve and Restricted Net Assets

~~The~~Under PRC ~~Company’s~~rules ~~common~~and ~~stock~~regulations, ~~began~~all ~~trading on~~companies in the ~~Nasdaq~~PRC ~~Capital~~are ~~Market~~required ~~under~~to appropriate 10% of their net income to a statutory surplus reserve until the ~~ticker~~reserve ~~symbol~~balance ~~“WETH”~~reaches on50% ~~February~~of ~~21,~~their ~~2024~~registered capital. The ~~Company~~appropriation ~~failed~~ to ~~timely~~this ~~complete~~statutory ~~the~~surplus reserve must be made before ~~filing~~distribution ~~procedures~~of ~~with~~dividends ~~China~~can ~~Securities~~be ~~Regulatory~~made. ~~Commission~~The ~~(“CSRC”)~~statutory onreserve ~~overseas~~is ~~offering~~non-distributable, other than during liquidation, and ~~transfer~~can ofbe ~~listing~~used ~~pursuant~~to fund previous years losses, if any, and may be converted into share capital by issuing new shares to existing shareholders in proportion to their shareholders or by increasing the ~~regulations~~par ~~below:~~value of the shares currently outstanding, provided that the remaining balance of the statutory reserve after such issue is not less than 25% of the registered capital.

~~1) Pursuant~~ Appropriations to ~~Article~~the 13discretionary ~~and~~surplus ~~Article~~reserve 8are ~~and~~made ~~Article~~at ~~25 of CSRC Announcement (2023) No. 43 -Trial Measures for~~ the ~~Administration~~discretion of ~~Overseas~~the ~~Issuance~~board ~~and Listing~~ of ~~Securities~~directors. ~~for~~The ~~Domestic~~statutory ~~Enterprises”~~reserve ~~(the~~may ~~“Trial~~be ~~Measures”),~~applied ~~which~~against prior ~~was~~year ~~effective on March 31~~losses, ~~2023~~if ~~( http://www.csrc.gov.cn/csrc/c101954/c7124478/content.shtml)~~any, ~~when an issuer conducts an overseas offering or listing, it shall submit overseas issuance~~ and ~~listing~~may ~~application~~be ~~documents~~used ~~to CSRC within three working days of submitting its application documents~~ for ~~transfer~~general ~~and~~business ~~listing~~expansion ~~overseas; when a domestic enterprise transfers its listing overseas, it shall comply with the requirements of the overseas first public listing requirements for issuance~~ and ~~listing,~~production ~~and~~or ~~shall~~increase ~~file~~in ~~with~~registered ~~the CSRC within 3 working days~~capital, ~~after~~but ~~its~~are ~~submitting~~not distributable ~~application~~as ~~documents~~cash ~~for transfer and listing overseas~~dividends.

2)As ~~Article 27~~ of ~~Trial~~March ~~Measures~~31, ~~stipulates that if a domestic enterprise violates the provisions of Article 13 of these Measures~~ 2025 and ~~fails~~December to31, ~~perform the filing procedures~~2024, ~~or violates~~ the ~~provisions~~Company ofhad ~~Articles~~reserve 8fund ~~and 25~~ of ~~these Measures for overseas issuance and listing~~US$8,073,968 ~~CSRC shall order it to make corrections~~ and ~~give a warning~~US$8,073,968, ~~and impose a fine of not less than RMB 1 million but not more than RMB 10 million~~respectively.

~~As of the date of this Quarterly Report, the Company has not received any notice of penalty from the CSRC. Management will closely monitor any notice or action from the CSRC.~~ F-19

~~Legal~~NOTE 12 — ~~Proceedings~~SHARE BASED COMPENSATION

~~From~~The Company ~~time~~applied toASC ~~time,~~718 ~~the Company~~ and ~~its~~related ~~subsidiaries are~~interpretations ~~parties~~in toaccounting ~~various~~for ~~legal~~measuring ~~actions arising in~~ the ~~ordinary~~cost ~~course~~ of ~~business.~~share-based ~~Although~~compensation ~~Hong~~over ~~Kong Wetouch, Sichuan Wetouch,~~ the ~~deconsolidated~~period ~~subsidiary~~during ofwhich the ~~Company~~consultants ~~(see~~are ~~Note~~required ~~2-(a)~~to -provide ~~Deconsolidation~~services ofin ~~Sichuan~~exchange ~~Wetouch),~~for ~~Sichuan~~the ~~Vtouch~~issued ~~and Mr~~shares. ~~Guangde~~The ~~Cai,~~fair ~~the former~~value ~~Chairman and director~~ of ~~the~~above ~~Company,~~award ~~were~~was ~~named~~estimated at asthe ~~defendants~~grant indate ~~several~~using ~~litigation matters, as of~~ the ~~date~~Black-Scholes ofmodel ~~this~~for ~~Quarterly Report,~~pricing ~~some~~the ofshare ~~which~~compensation ~~have been settled and Sichuan Wetouch, Hong Kong Wetouch and Mr~~expenses. ~~Guangde Cai were unconditionally and fully discharged and released therefrom. Below is a summary of the above-mentioned litigation.~~

i)On December A22, ~~share~~2020, ~~transfer~~the ~~dispute~~board ~~case~~of ~~with~~directors ~~Yunqing~~of Suthe ~~for~~Company aauthorized ~~disputed~~the ~~amount~~issuance of ~~RMB1~~an aggregate of 5,~~318~~181 shares and warrants to purchase an aggregate of 10,~~604~~518 ~~(equivalent~~shares of common stock to ~~$185~~The Crone Law Group,~~721)~~ P.C. or its designees for legal services that had been rendered. The five-year warrants are exercisable at one cent per share.

~~On June 22~~5, ~~2017, Yunqing Su, a former shareholder~~181 shares of ~~Sichuan~~common ~~Wetouch,~~stock ~~entered~~underlying ~~into~~such anwarrants ~~Equity~~were ~~Investment~~vested ~~Agreement~~on ~~with~~December ~~Sichuan~~22, ~~Wetouch~~2020 and ~~Guangde Cai~~6,211 ~~pursuant~~shares towere ~~which~~issued ~~Yunqing~~upon Suexercise ~~would invest RMB1 million (equivalent to $140,847) to purchase 370,370.37 original proposed listed shares~~ of ~~the~~these warrants ~~proposed listed company~~ on ~~Australian~~ ~~capital~~September ~~market~~21, ~~Sichuan~~2022 ~~Wetouch,~~ and ~~provided~~warrant ~~for~~to ~~the~~purchase ~~exit mechanism in the agreement. However~~4,307 ~~the~~shares ~~target~~remained ~~company~~outstanding ~~failed~~for ~~to be~~The ~~listed~~Crone onlaw ~~Australian capital market prior to December 31~~Group, ~~2017 as agreed~~P.C. Onor ~~June~~its ~~22, 2017, Guangde Cai and Yunqing Su entered into~~designees afor ~~supplementary~~legal ~~agreement,~~services. ~~pursuant~~The tofair ~~which~~value ~~Guangde Cai shall repurchase all~~ of ~~Yunqing~~above ~~Su’s~~award ~~equity~~was ~~interests~~estimated ~~and~~at ~~pay~~ the ~~interest. Sichuan~~grant ~~Wetouch~~date ~~repaid~~using ~~Yunqing~~Black-Scholes Sumodel ~~the~~for ~~interest~~pricing ~~of RMB220,000 (equivalent to $30,986) and~~ the ~~principal~~share ~~of RMB128,000 (equivalent to $18,028)~~compensation ~~in November 2018~~expenses. ~~However,~~The ~~upon~~fair ~~the~~value ~~expiration~~ of the ~~supplementary~~Black-Scholes ~~agreement,~~model ~~Sichuan~~includes ~~Wetouch and Guangde Cai failed to repay~~ the ~~remaining principal~~following ~~balance~~assumptions: ~~plus~~expected ~~interest~~life ~~owed~~of ~~to Yunqing Su~~2.5 ~~Yunqing~~years, Suexpected ~~subsequently sued Sichuan Wetouch and Guangde Cai in the Renshou County~~dividend ~~People’s~~rate ~~Court~~ of ~~Sichuan Province~~0%, ~~and~~volatility ~~the~~of ~~case~~43.5% ~~was~~and ~~filed~~an onaverage ~~February~~interest 9,rate ~~2022~~of 0.11%.

On January ~~May 9~~1, ~~2022~~2021, ~~pursuant~~the toboard aof ~~civil~~directors ~~mediation statement~~of ~~issued~~the byCompany authorized the ~~Renshou~~issuance ~~County~~of ~~People’s~~an ~~Court~~aggregate of ~~Sichuan Province~~15,541 ~~Sichuan~~shares ~~Wetouch~~ and ~~Guangde~~warrants ~~Cai agreed~~ to ~~repay Yunqing~~purchase Su31,554 ~~the~~shares ~~remaining~~of ~~principal~~common ~~balance~~stock ~~plus~~to ~~interest~~a inthird ~~the~~party ~~total~~service ~~amount~~provider offor ~~RMB~~consulting ~~1,318,604~~services ~~(equivalent~~that tohad ~~$185,721)~~been rendered. ~~Sichuan~~These ~~Wetouch~~warrants ~~fully~~have a ~~repaid~~five-year ~~the~~term ~~aforesaid~~and ~~amount~~are onexercisable ~~March~~at ~~15,~~one ~~2023~~cent per share.

~~ii)~~The 15,541 ~~Legal~~shares ~~case~~of ~~with~~common ~~Chengdu~~stock ~~SME~~and ~~Credit~~warrants ~~Guarantee~~to ~~Co.~~purchase 31,554 ~~Ltd.~~shares onof acommons ~~court~~stock ~~acceptance~~vested ~~fee~~on ofJanuary ~~RMB338~~1,~~418~~ ~~(equivalent to $47,665)~~2021.

~~On July 5, 2013, Sichuan Wetouch obtained a one-year~~The ~~loan~~fair value of ~~RMB60.0~~the ~~million~~above ~~(equivalent~~warrants towas ~~$8.5~~estimated ~~million)~~at ~~from~~the ~~Bank~~grant ofdate ~~Chengdu,~~using atBlack-Scholes anmodel ~~annual~~for ~~interest~~pricing ~~rate~~the ofshare ~~8.61%.~~compensation ~~Chengdu SME Credit Guarantee Co~~expenses., The ~~Ltd~~fair ~~(“Chengdu~~value ~~SME”),~~of athe ~~third~~Black-Scholes ~~party,~~model ~~provided~~includes athe ~~70%~~following ~~guarantee~~assumptions: ~~and~~expected ~~Bank~~life of ~~Chengdu retained 30% of the risk~~2.5 ~~Chengdu Wetouch~~years, a ~~related~~expected ~~party~~dividend ~~company~~rate ~~with~~of 980% ~~equity interests owned by Mr. Guangde Cai~~, volatility ~~the founder~~ of ~~the Company, and Mr~~51.3% ~~Guangde Cai provided joint~~ and ~~several~~an ~~liability~~average ~~guarantee~~interest ~~for~~rate ~~100%~~ of ~~the loan~~0.12%.

~~On July 31, 2014, Sichuan Wetouch repaid RMB5.0~~During ~~million~~the ~~(equivalent~~year toended ~~$0.7~~December ~~million). The remaining loan of RMB55.0 million (equivalent to $7.7 million) was extended twice due on August 22~~31, ~~2018. Upon the loan becoming due~~2024, ~~but~~warrants ~~unpaid~~for ~~by the Company~~35,861 ~~Chengdu~~shares ~~SME repaid the outstanding balance~~ of ~~RMB55~~common ~~million~~stock ~~(equivalent to~~related ~~$7.7 million)~~ to ~~Bank~~above ofmentioned ~~Chengdu.~~services ~~The~~were ~~Company subsequently repaid RMB55 million (equivalent to $7~~exercised.7 ~~million) to Chengdu SME; however,~~There ~~Chengdu SME filed two separate lawsuits against the Company to recover loan default penalties from the Company. The loan default penalties~~ were ~~(a)~~no ~~RMB5.8~~warrants ~~million (equivalent to $0.8 million)~~ related to ~~the~~services ~~30% of the~~ remaining ~~loan~~as ~~balance repaid by Chengdu SME and (b) RMB6.0 million (equivalent to $0.8 million) related to the 70%~~ of ~~the remaining loan balance repaid by Chengdu SME. During the year ended~~ December 31, ~~2017, the Company recorded loan default penalties, and related liabilities, of $1~~2024.~~7 million.~~

FAs of March 31, 2025 and December 31, 2024, the Company recognized relevant share-18based compensation expense of nil and nil for the vested shares, and nil and nil for the warrants, respectively.

~~Chengdu SME applied to the Chengdu High~~F-tech Court for enforcement of the above-mentioned loan default penalties of RMB5.8 million (equivalent to $0.8 million) and RMB6.0 million (equivalent to $0.8 million) on December 30, 2018. On March 12, 2020, the Enforcement Settlement Agreement issued by the Chengdu High-tech Court confirmed that Sichuan Wetouch still owed RMB5.8 million (equivalent to $0.8 million) and RMB6.0 million (equivalent to $0.8 million), respectively, of the loan default penalties. The agreement did not specify which party shall pay the court fee.20

~~On September 16, 2020, Sichuan Wetouch made a~~NOTE ~~full~~13 ~~repayment~~— ofWEIGHTED ~~RMB11.8~~AVERAGE ~~million~~NUMBER ~~(equivalent~~OF ~~to $1.7 million) of the above loan default penalties to Chengdu SME.~~SHARES

OnIn October ~~March 16~~2020, ~~2023,~~the ~~pursuant~~Company toentered aninto ~~Enforcement Settlement~~a ~~Agreement~~reverse ~~entered~~merger ~~among~~transaction. ~~Chengdu~~The ~~SME,~~Company ~~Sichuan~~computes ~~Wetouch~~the ~~and~~weighted-average ~~Chengdu~~number ~~Wetouch,~~of ~~Chengdu~~shares ~~Wetouch~~of ~~agreed~~common stock tooutstanding ~~pay~~in accordance with ASC 260 states that in calculating the ~~court~~weighted ~~acceptance~~average shares when a reverse merger takes place ~~fee~~in the middle of ~~RMB338~~the year,~~418~~ ~~(equivalent~~the number of common shares outstanding from the beginning of that period to ~~$47,665~~the acquisition date shall be computed on the basis of the weighted-average number of shares of common stock of the legal acquiree (accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement. OnThe ~~March~~number ~~17,~~of ~~2023,~~shares ~~Chengdu~~of ~~Wetouch~~common ~~made~~stock aoutstanding from ~~full~~the ~~payment~~acquisition date to the end of that period shall be the ~~above~~actual ~~court~~number ~~fee~~of toshares ~~Chengdu~~of ~~SME~~common stock of the legal acquirer (the accounting acquiree) outstanding during that period.

~~iii)~~NOTE 14 ~~Legal~~— ~~case~~RISKS ~~with~~AND Lifan Financial Leasing (Shanghai) Co., Ltd. and Sichuan Wetouch, Chengdu Wetouch, Meishan Wetouch and Xinjiang Wetouch Electronic Technology Co., Ltd. on a court acceptance fee of RMB250,470 (equivalent to $35,278)UNCERTAINTIES

~~On November 20, 2014, Lifan Financial Lease (Shanghai)~~Credit ~~Co.,~~Risk ~~Ltd.~~– ~~(“Lifan~~The ~~Financial”)~~carrying ~~and~~amount ~~Chengdu~~of ~~Wetouch~~accounts ~~entered~~receivable ~~into~~included ain ~~Financial Lease Contract (Sale and Leaseback), which stipulated that Lifan Financial shall lease~~ the ~~equipment~~balance tosheet ~~Chengdu~~represents ~~Wetouch after~~ the ~~purchase~~Company’s ~~of the production equipment owned by Chengdu Wetouch~~exposure atto acredit ~~purchase~~risk ~~price~~in ~~lease~~relation ~~principal~~to ofits ~~RMB20~~financial ~~million,~~assets. ~~with~~No ~~the~~other ~~rental~~financial ~~interest~~asset ~~rate~~carries ~~of the leased equipment at 8% per year, for~~ a ~~lease term~~significant ofexposure ~~24 months. Upon the expiration of the lease term, Lifan Financial shall transfer the leased property~~ to ~~Chengdu~~credit ~~Wetouch~~risk. orThe ~~a third~~Company ~~party~~performs ~~designated~~ongoing bycredit ~~Chengdu~~evaluations ~~Wetouch at the price~~ of ~~RMB0~~each ~~after~~customer’s ~~Chengdu~~financial ~~Wetouch~~condition. ~~has~~The ~~fully~~Company ~~fulfilled~~maintains ~~its~~allowances ~~obligations,~~for ~~including,~~doubtful ~~without~~accounts ~~limitation,~~and ~~the~~such ~~payment~~allowances ofin the ~~rent,~~aggregate ~~liquidated~~have ~~damages~~not ~~(if~~exceeded ~~any)~~management’s ~~and other contractual obligations~~estimates. Guangde Cai, Sichuan Wetouch, Meishan Wetouch, an affiliated company of Mr. Guangde Cai and Xinjiang Wetouch Electronic Technology Co., Ltd. (“Xinjiang Wetouch”) provided Lifan Financial with joint and several liability guarantee.

OnThe Company ~~August~~has 9,its ~~2021,~~cash ~~Lifan~~in ~~Financial~~bank ~~filed~~deposits aprimarily ~~lawsuit against~~at ~~Chengdu~~state ~~Wetouch,~~owned ~~Guangde~~banks ~~Cai,~~located ~~Sichuan~~in ~~Wetouch,~~the ~~Meishan~~PRC. ~~Wetouch~~Historically, ~~and~~deposits ~~Xinjiang Wetouch~~ in ~~the~~PRC ~~Chengdu~~banks ~~Intermediate~~have ~~People’s~~been ~~Court.~~secured ~~The~~due ~~court~~to ~~ruled that: 1)~~ the ~~Financial~~state ~~Lease~~policy ~~Contract~~of ~~(Sale~~protecting ~~and~~depositors’ ~~Leaseback)~~interests. ~~was~~The ~~terminated;~~PRC 2)promulgated ~~the~~a ~~leased~~Bankruptcy ~~property~~Law ~~was~~in ~~owned~~August by2006, effective ~~Lifan~~June ~~Financial;~~1, 3)2007, ~~Chengdu~~which ~~Wetouch~~contains ~~shall~~provisions ~~pay~~for ~~Lifan~~the ~~Financial~~implementation ~~all~~of ~~outstanding~~measures ~~rent~~for ~~and interest thereon in~~ the ~~total~~bankruptcy ~~amount~~ of ~~RMB~~PRC ~~22,905,807 (equivalent to $3~~banks.2 ~~million)~~The asbank ~~well~~deposits aswith ~~the~~financial institutions ~~difference~~in ~~between~~ the ~~liquidated~~PRC ~~damages~~are ~~and~~insured by the ~~value~~government ofauthority ~~the~~for ~~leased~~up ~~property~~to ~~recovered~~RMB500, ~~etc~~000.

~~The~~Interest Rate ~~parties~~Risk ~~executed~~– aThe ~~settlement~~Company ~~agreement~~is ~~on March~~exposed ~~7, 2023, pursuant~~ to ~~which~~ the ~~parties~~risk ~~confirmed~~arising ~~that~~from ~~the~~changing ~~outstanding~~interest ~~balance of RMB 22~~rates,~~905,807~~ ~~(equivalent~~which tomay ~~$3.2~~affect ~~million) has been fully paid on December 23, 2021 and~~ the ~~above~~ability ~~cases~~of ~~have been settled. As for the court acceptance fees that were not previously~~repayment ~~agreed~~of ~~upon~~existing bydebts ~~the~~and ~~parties,~~viability ~~Chengdu Wetouch agreed to pay the court acceptance fee~~ of ~~RMB~~securing ~~250,470~~future ~~(equivalent~~debt toinstruments ~~$35,278).~~within ~~Chengdu Wetouch paid~~ the ~~aforesaid fees to Lifan Financial on March 10, 2023~~PRC.

~~iv)~~Currency Risk ~~Legal~~- ~~case~~A ~~with~~majority ~~Sichuan~~of ~~Renshou~~the ~~Shigao~~Company’s ~~Tianfu~~revenue ~~Investment~~and ~~Co.,~~expense ~~Ltd~~transactions are denominated in RMB and ~~Renshou~~a ~~Tengyi~~significant ~~Landscaping~~portion Coof the Company’s assets and liabilities are denominated in RMB., ~~Ltd~~RMB is not freely convertible into foreign currencies. onIn athe ~~court~~PRC, certain ~~acceptance~~foreign ~~fee~~exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of ~~RMB103,232~~China (~~equivalent~~“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to ~~$14,540)~~affect the remittance.

OnConcentrations - ~~March~~The ~~19,~~Company ~~2014,~~sells ~~Chengdu~~its ~~Wetouch,~~products aprimarily ~~related party,~~to ~~obtained~~customers ain ~~two-~~the PRC and ~~half-year~~to ~~loan~~some ofextent, ~~RMB15.0~~the ~~million~~overseas ~~(equivalent~~customers toin ~~$2.1~~European ~~million)~~countries and ~~from~~East ~~Chengdu~~Asia ~~Bank~~such ~~Co.,~~as ~~Ltd.~~South ~~Gaoxin~~Korea ~~Branch~~and ~~(“Chengdu Bank~~Taiwan. ~~Gaoxin~~For ~~Branch”),~~the ~~with Chengdu Hi~~three-~~tech~~month ~~Investment~~period ~~Group~~ended ~~Co.~~March 31, ~~Ltd.~~2025 ~~(“CDHT~~and ~~Investment”)~~2024, ~~acting~~five ascustomers ~~guarantor~~accounted ~~to pay~~for ~~off~~22.1%, ~~the~~16.9%, ~~loan~~15.8%, ~~principal~~15.1% and ~~related interests~~12.4%, and ~~Sichuan~~five ~~Wetouch~~customers ~~and~~accounted ~~Hong~~for ~~Kong~~22.4%, ~~Wetouch~~20.4%, ~~as guarantors~~14.6%, ~~all~~13.4% ofand ~~which~~11.1%, ~~were~~respectively, ~~jointly~~of ~~and~~the ~~severally~~Company’s ~~liable for such debts~~revenue.

~~Upon~~The Company’s ~~the~~top ~~loan~~ten ~~due~~customers inaggregately ~~January~~accounted ~~2017,~~for ~~Chengdu~~an ~~Wetouch defaulted~~aggregate ~~the~~of ~~loan,~~99.7% ~~thus,~~and ~~CDHT~~98.8% ~~Investment~~of ~~filed~~the atotal ~~lawsuit~~revenue ~~against~~for ~~Chengdu~~the ~~Wetouch,~~three-month period ~~Sichuan~~ended ~~Wetouch~~March 31, 2025 and ~~Hong~~2024, ~~Kong Wetouch demanding a full repayment of such debts~~respectively.

~~To support the local economic development as well~~As asof ~~Chengdu~~March ~~Wetouch~~31, ~~two government-backed companies~~2025, ~~Sichuan~~six ~~Renshou~~customers ~~Shigao~~accounted ~~Tianfu~~for ~~Investment Co~~23.5%, ~~Ltd~~17.6%, ~~(“Sichuan Renshou”) and Renshou Tengyi Landscaping Co~~14.4%, ~~Ltd~~14.2%, ~~(“Renshou Tengyi”) provided their bank deposits of RMB~~ 12.~~0 million (equivalent to $~~1.7% ~~million)~~and ~~as collateral, while Mr~~11.2% ~~Guangde~~of ~~Cai~~the ~~and~~total ~~Sichuan~~accounts ~~Wetouch~~receivable ~~also provided counter-guarantee~~balance, respectively.

~~Upon~~The Company ~~the~~purchases ~~expiration~~its ofraw ~~the~~materials ~~guarantee,~~through ~~Chengdu Wetouch~~various ~~still defaulted on repayment~~suppliers. AsRaw amaterial ~~result,~~purchases ~~CDHT~~from ~~Investment~~these ~~levied~~suppliers ~~this~~which ~~collateral~~individually exceeded 10% of ~~RMB12.0~~the ~~million.~~Company’s Ontotal ~~November~~raw ~~21,~~material ~~2019~~purchases, ~~Sichuan Renshou~~accounted ~~and~~for ~~Renshou~~an ~~Tengyi~~aggregate ~~filed~~of aapproximately ~~lawsuit~~48.2% ~~with~~(four ~~Chengdu~~suppliers) ~~Intermediate~~and ~~People’s Court demanding an asset recovery of RMB12~~42.~~0 million~~4% (~~equivalent~~five tosuppliers) ~~$1.7~~for ~~million)~~the ~~pursuant~~three-month toperiod ~~the~~ended ~~counter~~March ~~guarantee~~31, ~~agreement~~2025 and 2024, respectively.

~~F-19~~NOTE 15 — COMMITMENTS AND CONTINGENCIES

~~On December 2, 2019, pursuant to the reconciling agreement issued by~~i) ~~Chengdu~~Legal Intermediate People’s Court, the parties agreed to cancel the demand to seize property of Sichuan Wetouch rather than the property of Chengdu Wetouch, and to waive freezing Guangde Cai’s 60% shareholding equity in Xinjiang Wetouch Electronic Technology Co., Ltd.Proceedings

OnWe may ~~October~~from 9,time ~~2020, pursuant~~ to atime ~~settlement~~be ~~and release~~subject ~~agreement,~~to ~~Sichuan~~various ~~Wetouch,~~legal ~~Hong~~or ~~Kong~~administrative ~~Wetouch~~claims and ~~Guangde~~proceedings ~~Cai~~arising ~~are~~in ~~fully~~the ~~discharged~~ordinary ~~and~~course ~~released~~of ~~from~~business. Litigation or any ~~and~~other ~~all~~legal ~~obligations~~or ~~under the~~administrative ~~outstanding debts~~proceeding, ~~and~~regardless ~~from~~of ~~all~~the ~~liabilities~~outcome, ~~under~~can ~~guarantee~~result ~~with~~in ~~Chengdu~~substantial ~~Wetouch~~cost ~~being~~and ~~responsible~~the ~~for~~diversion of ~~the~~our ~~outstanding~~resources, ~~debts~~including byour ~~December 31,~~management’s ~~2020~~time and attention.

OnAs of ~~October~~the 27date of this Report, ~~2020~~we are not aware of any material, ~~Chengdu~~active, ~~Wetouch~~pending ~~made~~or athreatened ~~full~~to which the Company or any of its subsidiaries ~~payment~~is a party, or to which any of ~~the~~their ~~above~~property ~~debts~~is subject.

~~The settlement and release agreement did not specify~~ii) ~~which~~Capital ~~party~~Expenditure shall pay the court acceptance fee. On March 10, 2023, pursuant to an enforcement settlement agreement entered among Sichuan Renshou, Renshou Tengyi, Sichuan Wetouch, Chengdu Wetouch, and other relevant parties, Sichuan Wetouch agreed to pay the court acceptance fee of RMB103,232 (equivalent to $14,540). On March 17, 2023, Chengdu Wetouch made a full payment of the above court fee to Sichuan Renshou.Commitment

v)As of ~~Legal~~March ~~case~~31, ~~with~~2025, ~~Chengdu~~the ~~High~~Company had ~~Investment~~commitment ~~Financing~~of ~~Guarantee Co~~RMB5.0 ~~on a court acceptance fee of RMB250,000~~ million (equivalent to $~~35,211~~0.7 million) for construction in progress.

On March 22, 2019, Chengdu High Investment Financing Guarantee Co., Ltd, (“Chengdu High Investment”) filed a lawsuit against Hong Kong Wetouch in the Chengdu Intermediate People’s Court, claiming that Hong Kong Wetouch was jointly liable as a guarantor for the debt payable by Chengdu Wetouch. On May F-21, 2020, the court rendered a judgment ordering Hong Kong Wetouch to pay compensation of RMB17,467,042 (equivalent to $2,460,181), interest, liquidated damages, liquidated damages for late performance, etc.

~~On March~~ NOTE 16, ~~2023,~~— ~~Chengdu~~SEGMENT Wetouch, Sichuan Wetouch and Chengdu High Investment entered into a settlement enforcement agreement, confirming that Chengdu High Investment had received RMB17,547,197 (equivalent to $2,471,471) on October 27, 2020 paid by Chengdu Wetouch, and the above case has been settled. As for the court acceptance fees that were not previously agreed upon by the parties, Chengdu Wetouch agreed to pay the court acceptance fee of RMB 250,000 (equivalent to $35,211). Chengdu Wetouch paid the aforesaid fees to Chengdu High Investment on March 20, 2023.REPORTING

~~vi)~~The Company’s ~~Legal~~chief ~~case~~operating ~~with~~decision ~~Hubei~~maker ~~Lai’en~~has ~~Optoelectronics~~been ~~Technology~~identified ~~Co.~~as the Chief Executive Officer (“CEO”), ~~Ltd.~~who reviews financial information of operating segments based on aU.S. ~~product~~GAAP ~~payment~~amounts ofwhen ~~RMB157,714~~making ~~(equivalent~~decisions toabout ~~$22,213)~~allocating resources and assessing performance of the Company.

~~Sichuan Wetouch purchased products from Hubei~~The ~~Lai’en~~Company ~~Optoelectronics~~determined ~~Technology~~that ~~Co.,~~it ~~Ltd.~~operated (“Hubei Lai’en) multiple times from March to June 2019, but failed to pay the corresponding amount of RMB137,142.7 for the purchased products. On April 6, 2022, Hubei Lai’en filed a lawsuit against Sichuan Wetouch in ~~the~~one ~~Renshou~~operating ~~County~~segment ~~People’s Court~~ of ~~Sichuan~~touch ~~Province,~~screen ~~requesting payment of overdue payment for the products and liquidated damages~~business. On May 31, 2022, the Renshou County People’s Court rendered a judgment that Sichuan Wetouch shall pay Hubei Lai’en the price of goods of RMB137,143 and liquidated damages of RMB 20,571. Sichuan Wetouch paid the above amount to Hubei Lai’en on March 15, 2023.

~~vii)~~The Company ~~Legal~~primarily ~~case~~operates ~~with~~in ~~Chengdu~~People’s ~~Hongxin~~Republic ~~Shunda~~of ~~Trading~~China Co(“PRC”)., ~~Ltd.~~and onsubstantially ~~settlement~~all of ~~accounts~~the ~~payable~~Company’s ~~and~~long-lived assets ~~related~~are ~~fund~~located ~~interests~~in ~~totaling~~the ~~RMB3,021,294 ($425,540)~~PRC.

~~In March 2022, Sichuan Vtouch purchase steel products from Chengdu Hongxin Shunda Trading Co., Ltd. (“Chengdu Hongxin”~~1) for facility construction, but failed to settle the accounts payable on time. In July 2023, Chengdu Hongxin filed a lawsuit with Chengdu Wuhou District People’s Court against the Company and its new facility constructors (the “three defendants”), of which Sichuan Chunqiu Development & Construction Group Co. Ltd. (“Chunqiu Co.”) as the primary contractor, requesting the settlement of the remaining accounts payable and the corresponding fund interests, penalties and legal fees, totaling of RMB3,021,294 ($425,540). The court made a judgment against the defendants for the repayment and ordered the freezing of bank accounts of these three defendants. On September 25, 2023, Sichuan Vtouch appealed to Chengdu Municipal Intermediate PeopleCompany’s ~~Court,~~geographical ~~arguing~~revenue ~~the~~information ~~calculation~~is ofset ~~fund~~forth interests and penalties ordered by the lower court was unfair and not in line with the law regulations. On March 26, 2024, the appellate court upheld the original judgment. In April 2024, Chengdu Hongxin sought enforcement of the judgment in the amount of RMB2,556,537 ($351,791). As of the date of this Quarterly Report, the primary facility constructor Chunqiu Co. paid the above enforcement amount in full.below:

viii) Legal case with Mr. Guangchang Liu on a refund of equity transfer price and related interests totaling RMB324,501 ($45,705)

	Three-Month Period Ended March 31
	2025		2024
	(Unaudited)
Sales in PRC	$	10,301,069	$	9,374,473
Sales in Overseas
-Republic of China (ROC, or Taiwan)		2,667,917		3,195,161
-South Korea		2,320,592		2,172,475
-Others		-		135,150
Sub-total		4,988,509		5,502,786
Total revenues	$	15,289,578	$	14,877,259

~~In July 2022, Mr. Liu entered into an equity transfer agreement with Mr. Guangde Cai and Sichuan Vtouch with the intention to subscribe the Company’s shares of 20,000 for RMB315,245 ($44,104~~2). InSegment ~~April~~information ~~2023,~~is ~~Mr.~~set ~~Liu~~forth filed a lawsuit with Shenzhen Nanshan District People’s Court against Mr. Guangde Cai and Sichuan Vtouch requesting the refund of this equity transfer price and related interests totaling RMB324,501 ($45,705). On December 13, 2023, the dispute was resolved through court-mediated settlement, with the defendants ordered to pay the required funds and associated legal fees by the end of 2023, along with any applicable default interest in the event of late payment. Mr. Cai made the repayment of the subscription fund and legal fees in full (totaling RMB 303,083.76) in January 2024 and the related default interests of approximately RMB29,300 (equivalent to $4,127). The above repayments totaling RMB332,383.76 (equivalent to $46,815). On November 5, 2024, Mr. Guangde Cai signed a liability waver agreement with Sichuan Vtouch, discharging any joint liability of Sichuan Vouch accordingly.below:

F-20

	Three-Month Period Ended March 31
	2025			2024
	(Unaudited)
Revenues	$	15,289,578		$	14,877,259
Less:
Cost of revenues		9,647,947			11,539,301
Allowance for credit losses		45,739			-
Reversal of provision of obsolete inventory		(25,276	)		-
Staff cost		351,637			327,959
(Gain) on changes in fair value of common stock purchase warrants liability.		-			(7,821	)
Amortization of discounts and issue cost of the notes		-			5,715
Depreciation expense		2,471			2,316
Lease expense		151,375			147,729
Interest expense		-			1,169,974
Income tax expense		1,471,106			661,848
Other segment items*		1,081,857			471,368

Segment net income		2,562,722			558,870

Consolidated net income	$	2,562,722		$	558,870

Consolidated total assets	$	133,677,892		$	123,147,198

~~ix)~~* ~~Legal~~Other ~~case~~segment ~~with~~items ~~Sichuan~~include ~~Yali~~remaining ~~Cement~~selling ~~Manufacturing Co.~~expense, ~~Ltd.~~general and ~~Sichuan~~administration ~~Chunqiu~~expenses, ~~Development~~research & ~~Construction Group Co. Ltd. on a debt payable of RMB RMB1~~development,~~656,480~~ ~~(equivalent to $233,310)~~ and ~~related~~ interest, ~~legal fees and penalties~~income.

~~On August 10, 2021, Sichuan Yali Cement Manufacturing~~NOTE ~~Co.,~~17 ~~Ltd.~~— ~~(“Yali~~SUBSEQUENT Co.”) and Chunqiu Co. entered into construction materials purchase contract for Sichuan Vtouch’s new facility. Under this contract, Sichuan Vtouch was jointly liable for the payment settlement between Yali Co. and Chunqiu Co.EVENTS

On ~~February~~April 1511, ~~2023~~2025, ~~Yali~~Sichuan ~~Co.~~Vtouch ~~filed~~entered into a ~~lawsuit against~~supplemental ~~Chunqiu~~construction ~~Co.~~contract with ~~the~~Sichuan ~~Chengdu~~Chunqiu ~~Wenjiang~~Development ~~District~~& ~~People’s~~Construction ~~Court,~~Group ~~claiming that Chunqiu~~ Co. ~~should~~Ltd. ~~pay~~for ~~the~~a ~~remaining~~total ~~debt~~consideration of RMB ~~RMB1~~ 4,~~656~~633,~~480~~118 (equivalent to $~~233,310~~0.6 million) ~~and~~for ~~related~~completion ~~interest,~~of ~~legal~~the ~~fees~~Company’s ~~and~~facility ~~penalties,~~construction ~~and~~project ~~that~~on ~~Sichuan~~the ~~Vtouch~~capacitive touch ~~should~~screen beand ~~jointly~~touch ~~liable for~~machine R&D. Pursuant to the ~~debt~~contract, ~~payable~~the byCompany ~~Chunqiu~~is ~~Co.~~required Onto ~~August~~prepay 2,50% ~~2023,~~of the ~~court~~contract ~~rendered~~within athree months ~~judgment~~and ~~ordering~~the ~~Chunqiu~~remaining ~~Co.~~amount topayable ~~pay~~upon tothe ~~Yali~~completion Coof the project settlement. ~~for~~As ~~above~~of the ~~mentioned~~date ~~amount.~~of ~~Sichuan~~this ~~Vtouch~~Quarterly ~~was~~Report, ~~ordered~~the ~~joint~~Company ~~liability~~has prepaid the 50% of ~~such~~the ~~aforesaid~~contract ~~repayment~~value.

~~On August~~ F-22, 2023, Chunqiu Co. appealed to Chengdu Municipal Intermediate People’s Court against Yali Co. and Sichuan Vtouch, requesting Sichuan Vtouch to be responsible for this debt payable. On October 30, 2023, the court ordered Chunqiu Co. to repay all the debts, and Sichuan Vtouch to bear the joint and several liability for the above debts of Chunqiu Co. including a court fee of RMB10,627 ($1,497) with Chunqiu Co. As of September 30, 2024, Chunqiu Co. made full payment of remaining debt of RMB RMB1,656,480 (equivalent to $233,310) and the payment of related court fee of RMB10,627 ($1,497) in full.

~~Capital~~Item 2. ~~Expenditure~~Management’s ~~Commitment~~Discussion and Analysis of Financial Condition and Results of Operations

AsThe ofdiscussion ~~September~~should ~~30,~~be ~~2024,~~read in conjunction with the Company’s ~~had~~consolidated ~~commitment~~financial statements and the notes presented herein. In addition to historical information, the following Management’s Discussion and Analysis of ~~RMB5~~Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties.0 ~~million~~Actual ~~(equivalent~~results could differ significantly from those expressed, implied or anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to $0be filed with the Securities and Exchange Commission.7 For ~~million)~~more ~~for~~information ~~construction~~regarding inthe ~~progress~~risks and uncertainties of our business, See “Risk Factors”, “Cautionary Note Regarding Forward Looking Statement.”

~~NOTE 14 — REVENUES~~Overview

The Company’s ~~geographical~~is ~~revenue~~a ~~information~~Nevada holding company with no material operations of its own. We conduct substantially all of our operations through our ~~was~~subsidiary ~~set~~in ~~forth~~mainland ~~below:~~China, which we control through BVI Wetouch. See “Item 1. Business – Corporate History and Structure” for more details.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Sales in PRC	$	7,429,211	$	7,423,695	$	24,671,308	$	25,819,405
Sales in Overseas
-Republic of China (ROC, or Taiwan)		2,253,523		1,943,123		7,859,989		5,962,410
-South Korea		1,830,671		1,742,589		5,959,287		5,387,021
-Others		24,584		14,199		159,239		162,662
Sub-total		4,108,778		3,699,910		13,978,515		11,512,093
Total Revenue	$	11,537,989	$	11,123,605	$	38,649,823	$	37,331,498

Because our operations are primarily in China, we are subject to complex and evolving PRC laws and regulations. These include restrictions on capital flows, dividend payments, currency conversion, cybersecurity and data privacy, and governmental discretion over overseas securities offerings. These risks could materially affect our ability to transfer funds, conduct offerings, or continue operations in their current form. See “Item 1A. Risk Factors—Risks Related to Doing Business in China.”

FAs of March 31, 2025, the Company has contributed RMB 348.0 million (US$47.7 million) to its PRC subsidiary through intermediate holding companies, which were accounted for as long-21term investments. These funds have been used by our PRC subsidiary in its operations. To date, no dividends or other distributions have been made by our PRC subsidiary to the Company. We may rely on future distributions from our PRC subsidiary to fund our holding company obligations, subject to PRC law and restrictions. For more details, see “Item 1A. Risk Factors—Risks Related to Doing Business in China—As a holding company, we conduct our operations primarily through our PRC subsidiary and face risks and uncertainties associated with this structure.”

~~Item~~Under current 2.PRC ~~Management’s~~law, ~~Discussion~~dividend payments by our PRC subsidiary are limited to accumulated profits determined in accordance with PRC accounting standards and ~~Analysis~~are subject to statutory reserve requirements. Dividends to the Company are also subject to withholding tax, generally 10%, but reduced to 5% if treaty conditions are met. There is no assurance that the reduced rate will apply. For more details, see “Item 1A. Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the PRC legal system, including the enforcement of ~~Financial~~laws ~~Condition~~and changes in laws and ~~Results~~regulations, ofcould ~~Operations~~adversely affect us and limit the legal protections available.”

The discussion should be read in conjunction with the Company’s consolidated financial statements and the notes presented herein. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Actual results could differ significantly from those expressed, implied or anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the Securities and Exchange Commission. See “Cautionary Note Regarding Forward Looking Statement.”2

~~Overview~~We currently do not have cash management policies dictating how funds are transferred between the Company and its subsidiaries. Most of our cash is maintained in Renminbi in mainland China and may be subject to PRC restrictions on outbound transfers. For details, see “Item 1A. Risk Factors - Risks Related to Doing Business in China - Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.”

~~We were originally incorporated under the laws~~Through ofour ~~the~~wholly ~~state~~owned ofsubsidiaries, ~~Nevada~~BVI inWetouch, ~~August~~HK ~~1992.~~Wetouch, Onand ~~October~~Sichuan 9Vtouch, ~~2020,~~ we ~~entered~~are ~~into~~engaged ain ~~share exchange agreement (~~the ~~“Share~~research, ~~Exchange~~development, ~~Agreement”)~~manufacturing, ~~with~~sales ~~BVI Wetouch~~ and ~~all~~servicing ~~the shareholders~~ of ~~BVI~~medium- ~~Wetouch,~~ to ~~acquire~~large-sized ~~all~~projected ~~the~~capacitive ~~issued~~touchscreens. ~~and~~We ~~outstanding~~are ~~capital~~specialized ~~stock~~in oflarge-format ~~BVI~~touchscreens, ~~Wetouch in exchange~~which ~~for~~are ~~the~~developed ~~issuance~~and todesigned ~~such~~for ~~shareholders~~a anwide ~~aggregate~~variety of 28markets ~~million~~and ~~shares~~used ofin ~~our~~the ~~common~~financial ~~stock~~terminals, ~~(the~~automotive, ~~“Reverse~~POS, ~~Merger”).~~gaming, ~~The~~lottery, ~~Reverse~~medical, ~~Merger~~HMI, ~~closed~~and onother ~~October~~specialized ~~9, 2020~~industries. AsOur aproduct ~~result~~portfolio ofcomprises ~~the~~medium- ~~Reverse~~to ~~Merger,~~large-sized ~~BVI~~projected ~~Wetouch~~capacitive istouchscreens ~~now~~ranging from ~~our~~7.0 ~~wholly-owned~~inch ~~subsidiary~~to 42 inch screens.

~~Through~~We ~~our~~generate ~~wholly-owned~~revenues ~~subsidiaries, BVI Wetouch,~~through ~~HK Wetouch, Sichuan Wetouch, and Sichuan Vtouch, we are engaged in the research, development, manufacturing,~~ sales ~~and servicing~~ of ~~medium to large sized projected capacitive touchscreens, which constitutes~~ our ~~source~~various oftouchscreen ~~revenues~~products. We are specialized in large-format touchscreens, which are developed and designed for a wide variety of markets and used in by the financial terminals, automotive, POS, gaming, lottery, medical, HMI, and other specialized industries. Our product portfolio comprises medium to large sized projected capacitive touchscreens ranging from 7.0 inch to 42 inch screens. In terms of the structures of touch panels, we offer (i) Glass-Glass (“GG”), primarily used in GPS/car entertainment panels in mid-size and luxury cars, industrial HMI, financial and banking terminals, POS and lottery machines; (ii) Glass-Film-Film (“GFF”), mostly used in high-end GPS and entertainment panels, industrial HMI, financial and banking terminals, lottery and gaming industry; (iii) Plastic-Glass (“PG”), typically adopted by touchscreens in GPS/entertainment panels motor vehicle GPS, smart home, robots and charging stations; and (iv) Glass-Film (“GF”), mostly used in industrial HMI.

~~On July 16, 2023, the Company’s board of~~We ~~directors~~sell ~~approved~~our atouchscreen ~~reverse~~products ~~stock~~both ~~split~~domestically ofin ~~the~~China ~~Company’s~~and ~~common~~internationally, ~~stock~~covering atmajor aareas ~~ratio~~in ofMainland ~~1-for-20. On July 16~~China, ~~2023,~~including ~~the~~but ~~Company~~not ~~filed~~limited ato ~~certificate~~the ofeastern, ~~change~~southern, ~~(with~~northern anand ~~effective~~southwest ~~date~~regions of ~~July~~Mainland 16China, ~~2023)~~Taiwan, ~~with~~South ~~the~~Korea, ~~Nevada~~and ~~Secretary~~Germany. ofWe ~~State~~believe ~~pursuant to Nevada Revised~~that ~~Statutes~~we ~~78.209~~have toestablished ~~effectuate~~ a ~~1-for-20~~strong ~~reverse~~and ~~stock~~diversified ~~split~~client ~~of its outstanding common stock~~base. On ~~September~~For ~~11, 2023,~~ the ~~Company received~~three amonths ~~notice~~ended ~~from~~March ~~FINRA/OTC~~31, ~~Corporate~~2025 ~~Actions~~and ~~the~~2024, ~~reverse~~our ~~split~~domestic ~~would~~sales ~~take~~accounted for ~~effect~~approximately at67.3% ~~the~~and ~~open~~63.1%, respectively, of ~~business~~our ~~on September 12~~revenues, ~~2023,~~ and ~~the~~our ~~reverse~~international ~~stock~~sales ~~that~~accounted ~~split~~for ~~took~~approximately ~~effect on that date~~32.7% ~~All~~and ~~share information included in this Quarterly Report has been reflected~~36.9%, asrespectively, ~~if the reverse stock splits occurred as~~ of ~~the~~our ~~earliest period presented~~revenues.

~~Construction~~Since our incorporation, we have effected two reverse stock splits of our ~~new~~common ~~facility~~stock, including a 1-for-70 reverse split in 2020 and a 1-for-20 reverse split in 2023, and all share and per share information in this Quarterly Report has been retroactively adjusted to reflect these actions. For more details, see “Item 1. Business - Corporate History and Structure - Reverse Stock Splits” of the 2024 Form 10-K.

~~We have been actively engaged in the construction~~Construction of our new ~~production facilities and office buildings in Chengdu Medicine City (Technology Park), Wenjiang District, Chengdu, Sichuan Province, Peoples’s Republic of China since the summer of 2023.~~facility

AsWe have ofbeen actively engaged in the ~~date~~construction of ~~this~~our ~~Quarterly~~new ~~Report,~~production wefacilities ~~anticipate~~and office buildings in Chengdu Medicine City (Technology ~~completing~~Park), ~~the~~Wenjiang ~~building~~District, ~~construction~~Chengdu, ~~including~~Sichuan Province, Peoples’s Republic of China since the ~~newly~~summer ~~planned~~of ~~touch~~2023. ~~machine~~The ~~construction~~Company ~~area~~has byplanned to increase the ~~end~~scope of ~~the~~facility ~~first~~construction ~~quarter~~by ofadding ~~2025 and commence~~a ~~production~~touch inmachine ~~the~~construction ~~third~~area, ~~quarter~~to be completed by the end of 2025.

2As of the date of this Quarterly Report, we estimate to finish the building construction by the end of 2025 and commence production in the second quarter of 2026. In consideration of the capital requirements for the new facility construction, we plan to fund the project primarily with our existing cash on hand, which totaled approximately $106.4 million as of March 31, 2025, and cash flows generated from operations, and we may seek additional financing if needed to support the timely completion of the project.

Highlights for the three-month ~~months~~period ended ~~September 30~~March 31, ~~2024~~2025 include:

● Revenues were $1115.53 million, an increase of 32.67% ~~from~~compared $to 11$14.19 million in the ~~third~~first quarter of ~~2023~~2024

● Gross profit was $45.46 million, aan ~~decrease~~increase of 869.37% ~~from~~compared $to 4$3.83 million in the ~~third~~first quarter of ~~2023~~2024

● Gross profit margin was 3836.49%, as compared to 4222.94% in the ~~third~~first quarter of ~~2023~~2024

● Net income was $2.75 million, aan ~~decrease~~increase of 6316.97% ~~from~~compared $to 2$0.96 million in the ~~third~~first quarter of ~~2023~~2024

● Total volume shipped was ~~548~~762,~~335~~545 units, aan ~~decrease~~increase of 111.69% ~~from~~compared ~~557~~to 681,~~503~~370 units in the ~~third~~first quarter of ~~2023~~2024

~~Results of Operations~~3

~~The following table sets forth, for the periods~~Results ~~indicated, statements~~ of ~~income data:~~Operations

(in US Dollar millions, except percentage)	For the Three Months Ended September 30,						Change			For the Nine Months Ended September 30,						Change
	2024			2023			%			2024			2023			%
Revenues	$	11.5		$	11.1			3.6	%	$	38.6		$	37.3			3.5	%
Cost of revenues		(7.1	)		(6.3	)		12.7	%		(26.0	)		(20.2	)		28.7	%
Gross profit		4.4			4.8			(8.3	)%		12.6			17.1			(26.3	)%
Total operating expenses		(0.9	)		(0.5	)		80.0	%		(3.1	)		(2.4	)		29.2	%
Operating income		3.5			4.3			(18.6	)%		9.5			14.7			(35.4	)%
Total other income (expenses)		0.1			(0.3	)		(133.3	)%		(0.9	)		(0.3	)		200.0	%
Interest expense		0.0			0.1			(100.0	)%		(1.2	)		(0.2	)		500.0	%
Income before income taxes		3.6			4.0			(10.0	)%		8.6			14.4			(40.3	)%
Income tax expense		(0.9	)		(1.1	)		(18.2	)%		(2.7	)		(4.1	)		(34.1	)%
Net income	$	2.7		$	2.9			(6.9	)%	$	5.9		$	10.3			(42.7	)%

The following table sets forth, for the periods indicated, statements of income data:

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

(in US Dollar millions, except percentage)	Three-Month Period Ended March 31,						Change
	2025			2024			%
Revenues	$	15.3		$	14.9			2.7	%
Cost of revenues		(9.7	)		(11.6	)		(16.4	)%
Gross profit		5.6			3.3			69.7	%
Total operating expenses		(1.6	)		(1.0	)		(60.0	)%
Operating income		4.0			2.3			73.9	%
Total other income (expenses)		0.0			(1.1	)		(100.0	)%
Interest expense		0.0			(1.2	)		(100.0	)%
Income before income taxes		4.0			1.2			233.3	%
Income tax expense		(1.5	)		(0.6	)		150.0	%
Net income	$	2.5		$	0.6			316.7	%

~~Revenues~~Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

We generated revenue of $11.5 million for the three months ended September 30, an increase of $0.4 million, or 3.6%, compared to $11.1 million in the same period of last year. This was due to an increase of 3.6% in the average selling price of our products, and 1.7% positive impact from exchange rate due to appreciation of RMB against US dollars, partially offset by a decrease of 1.6% in sales volume compared with that of the same period of last year.Revenues

	For the Three Months Ended September 30,
	2024					2023					Change		Change
	Amount		%			Amount		%			Amount		%
	(in US Dollar millions except percentage)
Revenue from sales to customers in Mainland China	$	7.4		64.3	%	$	7.4		66.7	%	$	0.0		0.0	%
Revenue from sales to customers overseas		4.1		35.7	%		3.7		33.3	%		0.4		10.8	%
Total Revenues	$	11.5		100	%	$	11.1		100	%	$	0.4		3.6	%

We generated revenue of $15.3 million for the three months ended March 31, 2025, an increase of $0.4 million, or 2.7%, compared to $14.9 million in the same period of last year. This was due to an increase of 11.9% in sales volume, and partially offset by a decrease of 6.9% in the average selling price of our products , and 1.2% negative impact from exchange rate due to depreciation of RMB against US dollars, compared with that of the same period of last year.

	For the Three-Month Ended March 31,
	2025					2024					Change			Change
	Amount		%			Amount		%			Amount			%
	(in US Dollar millions except percentage)
Revenue from sales to customers in Mainland China	$	10.3		67.3	%	$	9.4		63.1	%	$	0.9			9.6	%
Revenue from sales to customers overseas		5.0		32.7	%		5.5		36.9	%		(0.5	)		(9.1	)%
Total Revenue	$	15.3		100	%	$	14.9		100	%	$	0.4			2.7	%

	For the Three Months Ended September 30,
	For the Three-Month Ended March 31,
	2024					2023					Change			Change
	2025					2024					Change			Change
	Unit		%			Unit		%			Unit			%
	~~(in UNIT, except percentage)~~	(in UNIT, except percentage)
Units sold to customers in Mainland China		~~349~~508,~~960~~650		6366.87	%		~~365~~432,~~623~~050		6563.64	%		~~(15~~76,~~663~~600	)		(417.37	)%
Units sold to customers overseas		~~198~~253,~~375~~895		3633.23	%		~~191~~249,~~880~~320		3436.46	%		64,~~495~~575			31.48	%
Total Units Sold		~~548~~762,~~335~~545		100	%		~~557~~681,~~503~~370		100	%		(981,~~168~~175	)		(111.69	)%

(i) PRC ~~market~~Domestic Market

For the three months ended ~~September~~March 3031, ~~2024~~2025, werevenue ~~recorded~~from the ~~same~~PRC ~~revenue~~domestic ofmarket increased by $70.49 million, inor ~~the~~9.6%, ~~domestic~~as ~~market~~a ~~compared~~combined toresult of: ~~the~~(i) ~~same~~an ~~period~~increase of ~~last year~~17. ~~During~~7% ~~the~~in ~~third~~sales ~~quarter of 2024~~volume, ~~the~~partially ~~Company~~offset ~~had~~by an(ii) ~~increase~~a decrease of $35.03% in the average RMB selling price of our products, and partially offset by 1.72% ~~positive~~ negative impact from exchange rate due to ~~appreciation~~depreciation of RMB against US dollars, ~~partially offset by a decrease of 4.3% in sales volume, primarily due to lower sales volume of industrial control computer touchscreens, POS touchscreens, and gaming touchscreens,~~ compared with ~~those of~~that of the same period of last year.

As for the RMB selling price, the increase of 3.0% was mainly due to the higher selling price of new models of higher-end products such as medical touchscreen and automotive touchscreens in the domestic market during the three months ended September 30, 2023.4

~~The macroeconomic conditions~~As infor ~~China~~the inRMB ~~2024~~selling ~~continued~~price, ~~to be exacerbated from~~ the ~~impact~~decrease of ~~three~~5.3% ~~years~~was ofmainly ~~zero-COVID~~due ~~lockdowns~~to ~~since~~the ~~2020,~~lower ~~resulted~~demand inof ~~overall~~higher ~~weaker market~~selling ~~demand~~priced ~~and~~products ~~reduced~~of ~~sales~~touchscreen ~~orders~~ machines in the ~~touchscreen~~PRC ~~business.~~domestic ~~Despite~~market, ofincluding ~~sales~~the decreased byaverage ~~4.7%~~RMB inselling ~~South~~price ~~China~~of ~~and 5~~25.65% in ~~Eastern China,~~medical wetouchscreens ~~achieved~~and 61.42% ~~sales increase~~ in ~~Southwest~~industrial control ~~China~~computer touchscreens during the three-month ~~months~~period ended ~~September~~March 3031, ~~2024 as compared to that of last year~~2025.

~~(ii)~~Due to ~~Overseas~~our proactive efforts to market new models and efforts to obtain new customers and penetrate into new regions, our sales increased by 19.7% in South China, and 18.4% in East China, partially offset by a decrease of 1.5% in Southwest China during the three months ended March 31, 2025.

For the three months ended September 30, 2024, revenues from the overseas market were $4.1 million as compared to $3.7 million of the same period of 2023, representing an increase by $0.4 million, or 10.8%, mainly due to (~~i) an increase of 3.4% sales volume, particularly in gaming touchscreens and automotive touchscreens, (~~ii) ~~an increase of 4.9% in average RMB selling price mainly in industrial control computer~~ ~~touchscreens~~Overseas ~~and automotive touchscreens products, and (iii) 1.7% positive impact from exchange rate due to appreciation of RMB against US dollars, as compared with those of the same period of last year.~~Market

4For the three-month period ended March 31, 2025, revenues from the overseas market were $5.0 million as compared to $5.5 million of the same period of 2024, representing a decrease by $0.6 million, or 10.9%, mainly due to an decrease of 9.9% in average selling price in RMB due to the lower demand on touchscreen machines in medical touchscreens, industrial control computer touchscreens, and automotive touchscreens, and 1.2% negative impact from exchange rate due to depreciation of RMB against US dollars, partially offset by the increase of 1.8% in sales volume due to increased sales in industrial control computer touch screens and gaming touchscreens,

The following table summarizes the breakdown of revenues by categories in US dollars:

	Revenues For the Three Months Ended September 30,
	Revenues For the Three-Month Ended March 31,
	2024					2023					Change			Change
	2025					2024					Change			Change
	Amount		%			Amount		%			Amount			Margin%
	~~(in US Dollars, except percentage)~~	(in US Dollars, except percentage)
Product categories by end applications
Automotive Touchscreens	$	3,~~193~~960,~~024~~497		2725.79	%	$	24,~~945~~185,~~460~~270		2628.51	%	$	~~247~~(224,~~564~~773	)		8(5.4	)%
Industrial Constrol Computer Touchscreens		2,243,509		19.4	%		2,297,924		20.7	%		(54,415	)		(2.4	)%
Industrial Control Computer Touchscreens		3,235,073		21.2	%		2,847,660		19.2	%		387,413			13.6	%
Gaming Touchscreens		1,830,671		15.9	%		1,742,589		15.7	%		88,082			5.1	%
POS Touchscreens		2,411,031		15.8	%		2,114,099		14.2	%		296,932			14.0	%
POS Touchscreens		1,661,568		14.4	%		1,738,935		15.6	%		(77,367	)		(4.4	)%
Gaming Touchscreens		2,320,592		15.1	%		2,172,475		14.6	%		148,117			6.8	%
Medical Touchscreens		1,~~647~~949,~~650~~656		1412.38	%		12,~~398~~414,~~203~~961		1216.62	%		~~249~~(465,~~447~~305	)		17(19.83	)%
Multi-Functional Printer Touchscreens		~~961~~1,~~567~~412,727		89.32	%		1,~~000~~142,~~494~~794		97.07	%		~~(38~~269,~~927~~933	)		(323.96	)%
Total Revenues	$	11,537,989		100.0	%	$	11,123,605		100.0	%	$	414,384			3.6	%
Total Revenue	$	15,289,578		100.0	%	$	14,877,259		100.0	%	$	412,319			2.7	%

~~The~~* ~~Company~~Others ~~continued~~include toapplications ~~shift~~in ~~production mix from traditional lower~~self-~~end~~service ~~products to high-end products such as medical touchscreens and automotive touchscreens~~kiosks, ~~primarily~~ticket ~~due~~vending tomachines ~~(i) greater growth potential of computer screen models in China~~ and ~~overseas~~financial ~~market, and (ii) the stronger demand on higher-end touch screens made with better materials and better quality~~terminals.

~~Gross~~The Company ~~Profit~~continued to shift production mix from traditional lower-end products to high-end products such as industrial control computer touchscreens POS touchscreens, gaming touchscreens, and ~~Gross~~multi-functional ~~Profit~~printer ~~Margin~~touchscreens, primarily due to (i) greater growth potential of computer screen models in China and overseas market, and (ii) the stronger demand on higher-end touch screens made with better materials and better quality.

	For the Three Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount			%
Gross Profit	$	4.4		$	4.8		$	(0.4	)		(8.3	)%
Gross Profit Margin		38.4	%		42.9	%					(4.5	)%

Gross Profit and Gross Profit Margin

Gross profit was $4.4 million in the third quarter ended September 30, 2024, compared to $4.8 million in the same period of 2023. Our gross profit margin decreased to 38.4% for the third quarter ended September 30, 2024, as compared to 42.9% for the same period of 2023, primarily due to the increase of cost of goods sold by 11.9%, including the increase of 11.9% in cost of materials, 12.2% in utility cost, and 25.5% in labor costs due to new hiring of technicians since the first quarter of 2024. The rising chip cost has stabilized in the third quarter ended September 30, 2024 compared to the first quarter of 2024.

	Three-Month Period Ended March 31,						Change
(in millions, except percentage)	2025			2024			Amount		%
Gross Profit	$	5.6		$	3.3		$	2.3		69.7	%
Gross Profit Margin		36.9	%		22.4	%				14.5	%

~~Selling Expenses~~5

	For the Three Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount			%
Selling Expenses	$	0.2		$	0.3		$	(0.1	)		(33.3	)%
as a percentage of revenues		1.7	%		2.7	%					(1.0	)%

Gross profit was $5.6 million in the first quarter ended March 31, 2025, compared to $3.3 million in the same period of 2024. Our gross profit margin increased to 36.9% for the first quarter ended March 31, 2025, as compared to 22.4% for the same period of 2024, primarily due to the increase of revenues by 2.7% and the decrease of cost of goods sold by 22.1% resulting from the decrease of costs of raw materials of the touch screens machine production, partially offset by the increase of labor costs market during the first three months ended March 31, 2025.

Selling ~~expenses were $0.2 million for the three~~ months ended September 30, 2024, compared to $0.3 million in the same period in 2023, representing a decrease of $0.1 million, or 33.3%. The decrease was primarily due to a decrease in traveling expenses, as the sales department increasingly utilized online communications for sales forecasting and marketing evaluations during the three months ended September 30, 2024.Expenses

General and Administrative Expenses

	Three-Month Period Ended March 31,						Change
(in millions, except percentage)	2025			2024			Amount			%
Selling Expenses	$	0.1		$	0.5		$	(0.4	)		(80.0	)%
as a percentage of revenues		0.6	%		3.4	%					(2.8	)%

	For the Three Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount		%
General and Administrative Expenses	$	0.7		$	0.2		$	0.5		250.0	%
as a percentage of revenues		6.1	%		1.8	%				4.3	%

Selling expenses were $0.1 million for the three-month period ended March 31, 2025, compared to $0.5 million in the same period in 2024, representing a decrease of $0.4 million, or 80.0%. The decrease was primarily due to the less traveling expenses as the selling team using online communications to market the products during the three months ended March 31, 2025.

General ~~and~~ administrative expenses were $0.7 million for the three months ended September 30, 2024, compared to $0.2 million in the same period in 2023, representing an increase of $0.7 million, or 250.0%. The increase was primarily due to amortized $0.6 million consulting service fees (see Note 4 (iii) of the accompanying financial statements) and ~~the~~Administrative ~~increase of $0.1 million professional fees during the three months ended September 30, 2024.~~Expenses

	Three-Month Period Ended March 31,						Change
(in millions, except percentage)	2025			2024			Amount		%
General and Administrative Expenses	$	1.6		$	0.5		$	1.1		220.0	%
as a percentage of revenues		10.5	%		3.4	%				7.1	%

~~Research~~General and administrative expenses were $1.6 million for the three-month period ended March 31, 2025, compared to $0.5 million in the same period in 2024, representing an increase of $1.1 million, or 220.0%. The increase was primarily due to the increase of $0.5 million professional fees and ~~Development~~$0.5 ~~Expenses~~million of amortization of prepaid marketing research fees (see Note 3 of the accompanying financial statements) and $0.1 million of miscellaneous expenses including $45,739 allowance for credit losses of advance to vendors during the three months ended March 31, 2025.

	For the Three Months Ended September 30,						Change
(in US dollars, except percentage)	2024			2023			Amount		%
Research and Development Expenses	$	43,859		$	20,580		$	23,279		113.1	%
as a percentage of revenues		0.4	%		0.2	%				0.2	%

Research and Development Expenses

Research and development expenses were $43,859 for the three months ended September 30, 2024 compared to $20,580 in the same period in 2023, representing an increase of $23,279, or 113.1%, due to the increased R&D material consumption.

	Three-Month Period Ended March 31,						Change
(in US dollars, except percentage)	2025			2024			Amount			%
Research and Development Expenses	$	-		$	42,738		$	(42,738	)		(100.0	)%
as a percentage of revenues		0.0	%		0.0	%					0.0	%

~~Operating~~Research ~~Income~~and development expenses were nil and $42,738 for three-month period ended March 31, 2025, and 2024, respectively.

Total operating income was $3.5 million for the three months ended September 30, 2024 as compared to $4.3 million of the same period of last year, primarily due to lower gross margin and higher general and administrative expenses and research & development expenses, partially offset by lower selling expenses for the three months ended September 30, 2024.6

~~Gain (loss) on Changes in Fair Value of~~Operating ~~Common Stock Purchase Warrants~~Income

	For the Three Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount		%
Gain (loss) on changes in fair value of common stock purchase warrants	$	0.1		$	(0.2	)	$	0.3		(150.0	)%
as a percentage of revenues		0.9	%		1.8	%				(0.9	)%

Total operating income was $4.0 million for the three-month period ended March 31, 2025 as compared to $2.3 million of the same period of last year, primarily due to higher gross margin and lower selling expenses, partially offset by higher general and administrative expenses for the three-month period ended March 31, 2025.

~~Gain on changes in fair value of common stock~~Interest purchase warrants for the three months ended September 30, 2024 was $0.1 million as compared to loss of $0.2 million on changes in fair value of common stock purchase warrants in the same period of 2023, respectively.Expenses

Income Taxes

	Three-Month Period Ended March 31,						Change
(in millions, except percentage)	2025			2024			Amount			%
Interest Expenses	$	0.0		$	1.2		$	(1.2	)		(100.0	)%
as a percentage of revenues		0.0	%		8.1	%					(8.1	)%

	For the Three Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount			%
Income before Income Taxes	$	3.6		$	4.0		$	(0.4	)		(10.0	)%
Income Tax (Expense)		(0.9	)		(1.1	)		0.2			(18.2	)%
Effective income tax rate		26.9	%		28.7	%					3.9	%

For the three-month period ended March 31, 2025 and 2024, interest expenses were nil and $1.2 million respectively. The Company recognized interest expenses of convertible promissory notes in the amount of $1,169,974 (mainly the default interest charges of $1,145,995 upon the repayment of the notes payable) and $33,399, respectively. (See Note 10 (a) of the accompanying financial statements).

~~The effective income tax rates for the three months~~Income ~~ended September 30, 2024 and 2023 were 26.9% and 28.7%, respectively.~~Taxes

Net Income

	Three-Month Period Ended March 31,						Change
(in millions, except percentage)	2025			2024			Amount			%
Income before Income Taxes	$	4.0		$	1.2		$	2.8			233.3	%
Income Tax (Expense)		(1.5	)		(0.6	)		(0.9	)		150.0	%
Effective income tax rate		36.5	%		54.2	%					(17.7	)%

~~As a result of the above factors, we had a net~~The effective income oftax ~~$2.7~~rates ~~million~~for in the ~~third~~three-month ~~quarter~~period ofended ~~2024~~March ~~compared~~31, to2025 aand ~~net~~2024 ~~income~~were ~~of $2~~36.95% ~~million~~and in54.2%, ~~the same quarter of 2023~~respectively.

6Net Income

~~Results~~As a result of ~~Operations~~the -above ~~Nine~~factors, ~~Months~~we ~~Ended September 30,~~had ~~2024~~a ~~Compared~~net income of $2.5 million in the first quarter of 2025 compared to ~~Nine~~a ~~Months~~net ~~Ended~~income ~~September~~of ~~30,~~$0.6 ~~2023~~million in the same quarter of 2024.

~~Revenues~~Liquidity and Capital Resources

WeHistorically, ~~generated~~our ~~revenue~~primary uses of ~~$38.6~~cash ~~million~~have ~~for~~been ~~the nine~~to ~~months~~finance ~~ended~~working ~~September~~capital ~~30, 2024, an increase of $1~~needs.3 ~~million,~~We orexpect ~~3.5%, compared~~ to ~~$37.3~~be ~~million~~able into ~~the~~meet ~~same~~our ~~period~~needs ~~of last year. This was mainly due~~ to anfund ~~increase~~operations, ofcapital ~~1.8% in sales volume~~expenditures, and another ~~increase~~commitments ofover ~~4.0% in~~ the ~~average~~next ~~RMB~~12 ~~selling~~months ~~price~~primarily ofwith our ~~products,~~cash ~~partially offset~~and bycash ~~2.3% negative impact from exchange rate due to depreciation of RMB against US dollars~~equivalents, ~~compared~~operating ~~with~~cash ~~those~~flows ofand ~~the~~bank ~~same period of last year~~borrowings.

	For the Nine Months Ended September 30,
	2024					2023					Change			Change
	Amount		%			Amount		%			Amount			%
	(in US Dollar millions except percentage)
Revenue from sales to customers in PRC	$	24.7		64.0	%	$	25.8		69.2	%	$	(1.1	)		(4.3	)%
Revenue from sales to customers overseas		13.9		36.0	%		11.5		30.8	%		2.4			20.9	%
Total Revenues	$	38.6		100	%	$	37.3		100	%	$	1.3			3.5	%

However, we may require additional cash resources due to changes in business conditions or other future developments. If these sources prove insufficient to meet our cash requirements, we may seek to raise additional funds through the sale of equity or debt securities or by obtaining a credit facility. Any issuance of additional equity or equity-linked securities could dilute the ownership interests of existing shareholders, while the incurrence of additional indebtedness would increase our debt service obligations and could subject us to operating and financial covenants that may restrict our business activities. There can be no assurance that financing will be available in the necessary amounts, on terms acceptable to us, or at all.

	For the Nine Months Ended September 30,
	2024					2023					Change			Change
	Unit		%			Unit		%			Unit			%
	(in UNIT, except percentage)
Units sold to customers in PRC		1,153,140		63.5	%		1,207,931		66.5	%		(54,791	)		(4.5	)%
Units sold to customers overseas		662,270		36.5	%		574,988		33.5	%		87,282			15.2	%
Total Units Sold		1,815,410		100	%		1,782,919		100	%		32,491			1.8	%

As of March 31, 2025, we had current assets of $119.8 million, consisting of $106.4 million in cash, $11.1 million in accounts receivable, $0.1 million in inventories, and $2.2 million in prepaid expenses and other current assets Our current liabilities as of March 31, 2025 were $5.4 million, which is comprised of $1.6 million in accounts payable, $0.4 million in amounts due to a related party, $1.3 million in income tax payable, $1.6 million in accrued expenses and other current liabilities. and $0.6 million in operating lease liabilities, current portion. We also had $0.4 million in operating lease liabilities, non- current as of March 31, 2025.

~~(i) PRC market~~7

~~For the nine months ended~~The ~~September~~following ~~30,~~is ~~2024, revenue from PRC market decreased by $1.1 million or 4.3% as~~ a ~~combined~~summary ~~result~~ of ~~(i)~~our acash ~~decrease~~flows ofprovided ~~4.5%~~by in(used ~~sales volume, particularly~~ in) ~~multi-functional printer touchscreens~~operating, ~~medical touchscreens and automotive touchscreens~~investing, ~~(ii) 2.3% negative impact from exchange rate due to depreciation of RMB against US dollars,~~ and ~~partially~~financing ~~offset~~activities byfor ~~(iii) an increase of 2.6% in~~ the ~~average~~three-month ~~RMB~~periods ~~selling~~ended ~~price~~March ~~of our products~~31, ~~compared~~2025 ~~with~~and ~~those of the same period of last year.~~2024:

As for the RMB selling price, the increase of 2.6% was mainly due to the increased sales of new models of higher-end products such as medical touchscreens and automotive touchscreens with higher selling prices in the domestic market during the nine months ended September 30, 2024

	Three-Month Period Ended March 31,
(in US Dollar millions)	2025			2024
Net cash provided by (used in) provided by operating activities	$	2.0		$	(9.2	)
Net cash used in investing activities		(0.0	)		(0.1	)
Net cash provided by financing activities		0.0			7.5
Effect of foreign currency exchange rate changes on cash and cash equivalents		0.6			(1.4	)
Net increase (decrease) in cash and cash equivalents		2.7			(3.2	)
Cash and cash equivalents at the beginning of period		103.7			98.0
Cash and cash equivalents at the end of period	$	106.4		$	94.8

~~The macroeconomic conditions in China in 2024 continued to be exacerbated from the impact of three years of zero-COVID lockdowns since~~Operating 2020, resulted in overall weaker market demand and reduced sales orders in the touchscreen business. Despite of sales decreased by 6.0% in South China and 5.2% in East China, we achieved sales increase by 4.4% in Southwest China during the nine months ended September 30, 2024 as compared to that of last year.Activities

7Net cash provided by operating activities was $2.0 million for the three months ended March 31, 2025 as compared to net cash used in operating activities of $9.2 million for the same period of the last year.

(The positive cash flow for the three months ended March 31, 2025 was primarily due to i) $2.5 million net income, ii) ~~Overseas~~the ~~market~~decrease of $0.5 million in prepaid expenses and current assets, iii) the increase of in $0.3 million accounts payable, $0.3 million due to a related party, $1.3 million in tax payable and $0.6 million in accrued expenses and current liabilities, partially offset by iv) the increase of $3.5 million in accounts receivable.

~~For~~The negative cash flow for the ~~nine~~three months ended ~~September~~March 3031, 2024, ~~revenues from overseas market~~ was ~~$13.9~~primarily ~~million~~due asto ~~compared~~i) toincrease of $113.56 million ofin ~~the~~accounts ~~same period of 2023~~receivable, ~~representing~~ ~~an increase by~~ $23.4 million orin ~~20.9%~~prepaid ~~mainly~~expenses ~~due~~and tocurrent iassets, ii) anthe ~~increase~~decrease of 15$3.2%4 inmillion ~~sales volume, particularly~~ in ~~industrial~~accrued ~~control~~expenses ~~touchscreens, gaming touchscreens~~ and ~~automotive~~current ~~touchscreens (ii) 7.5% increase in average RMB selling price during the nine months ended September 30~~liabilities, ~~2024,~~ partially offset by (iii) ~~the~~net ~~2.3%~~income ~~negative impact from exchange rate due to depreciation~~ of ~~RMB~~$0.6 ~~against~~million USand ~~dollars~~iv) ~~,compared with~~the ~~those~~increase of ~~the~~$0.6 ~~same~~million ~~period~~in ofincome ~~last~~tax ~~year~~payable.

~~The following table~~Investing ~~summarizes the breakdown of revenues by categories in US dollars:~~Activities

	Revenues For the Nine Months Ended September 30,
	2024					2023					Change			Change
	Amount		%			Amount		%			Amount			Margin%
	(in US Dollars, except percentage)
Product categories by end applications
Automotive Touchscreens	$	10,769,342		27.9	%	$	9,390,350		25.2	%	$	1,378,992			14.7	%
Industrial Control Computer Touchscreens		7,458,806		19.3	%		7,392,780		19.8	%		66,026			0.9	%
Gaming Touchscreens		5,959,287		15.4	%		5,387,021		14.4	%		572,266			10.6	%
Medical Touchscreens		5,791,538		15.0	%		5,380,498		14.4	%		411,040			7.6	%
POS Touchscreens		5,544,124		14.3	%		6,084,523		16.3	%		(540,399	)		(8.9	)%
Multi-Functional Printer Touchscreens		3,126,726		8.1	%		3,696,326		9.9	%		(569,600	)		(15.4	)%
Total Revenues	$	38,649,823		100.0	%	$	37,331,498		100.0	%	$	1,318,325			3.5	%

There was no cash flow in investing activities for the three-month period ended March 31, 2025.

~~The Company continued to shift production mix~~Net ~~from~~cash ~~traditional lower-end products such as touchscreens~~ used in ~~industrial~~investing ~~control~~activities ~~computer~~for ~~industries~~the ~~to high~~three-~~end~~month ~~products~~period ~~such~~ended asMarch ~~automotive touchscreens~~31, ~~gaming~~2024 ~~touchscreen,~~was ~~and~~$0.1 ~~medical~~million ~~touchscreens,~~for ~~primarily~~the ~~due~~purchase ~~to (i) greater growth potential~~ of ~~computer screen models in China~~property, plant and ~~(ii) the stronger demand on higher-end touch screens made with better materials and better quality~~equipment.

~~Gross Profit and Gross Profit Margin~~Financing Activities

	For the Nine Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount			%
Gross Profit	$	12.6		$	17.1		$	(4.5	)		(26.3	)%
Gross Profit Margin		32.7	%		45.7	%					(13.0	)%

There was no cash flow in investing activities for the three-month period ended March 31, 2025.

~~Gross~~Net cash ~~profit~~provided ~~was~~by ~~$12.6 million~~financing ~~during~~activities for the ~~nine~~three months ended ~~September~~March 3021, ~~2023,~~2024 ~~compared~~was to $177.15 million, inincluding ~~the same period of 2023~~$9.0 ~~Our~~million ~~gross~~in ~~profit~~net ~~margin~~proceeds ~~increased~~from ~~to 32.7% for~~ the ~~nine months ended September 30,~~ 2024, asPublic ~~compared to 45.7% for the same period of 2023~~Offering, ~~primarily~~partially ~~due~~offset ~~to the increase of cost of goods sold~~ by 33$1.4%, ~~resulting~~million ~~from~~repayment ~~the increase~~ of ~~35.2%~~convertible inpromissory ~~costs of raw materials~~notes, ~~including the increase of chip cost by 3.1%,~~ and ~~the increase of 24.4% of labor costs due to additional hiring of technicians~~$82,864 ~~and~~repayment ~~the increase~~ of ~~25.4% of utility cost~~interest-free ~~during~~advances ~~the~~to ~~nine~~a ~~months ended September 30, 2024. The rising chip cost has stabilized in the~~ third ~~quarter ended September 30, 2024 compared to the first quarter of 2024~~party.

8As of March 31, 2025, our cash and cash equivalents were $106.4 million, as compared to $103.7 million at December 31, 2024.

~~Selling~~Days Sales ~~Expenses~~Outstanding (“DSO”) has decreased to 55 days for the three-month period ended March 31, 2025 from 64 days for the year ended December 31, 2024.

	For the Nine Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount		%
Selling Expenses	$	0.9		$	0.4		$	0.5		125.0	%
as a percentage of revenues		2.3	%		1.1	%				1.2	%

The majority of the Company’s revenues and expenses were denominated in Renminbi (“RMB”), the currency of the People’s Republic of China. There is no assurance that exchange rates between the RMB and the U.S. Dollar will remain stable. Inflation has not had a material impact on the Company’s business.

Selling expenses were $0.9 million for the nine months ended September 30, 2024, compared to $0.4 million in the same period in 2023, representing an increase of $0.5 million, or 125.0%, primarily due to an increase in traveling expenses and logistics costs during the nine months ended September 30, 2024.8

~~General~~Based on past performance and ~~Administrative~~current expectations, we believe our cash and cash equivalents provided by operating activities and financing ~~Expenses~~activities will satisfy our working capital needs, capital expenditures and other liquidity requirements associated with our operations for at least the next 12 months.

	For the Nine Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount		%
General and Administrative Expenses	$	2.1		$	1.9		$	0.2		10.5	%
as a percentage of revenues		5.4	%		5.1	%				0.3	%

Holding Company Structure

~~General~~There have ~~and~~been ~~administrative (G&A)~~no ~~expenses~~changes ~~were~~to ~~$2.1~~the ~~million~~Company’s ~~for~~holding company structure during the ~~nine~~three months ended ~~September~~March 3031, ~~2024, compared to $1~~2025.9 ~~million~~For inmore ~~the same period in 2023~~details, ~~representing~~refer ~~an increase of $0.2 million or 10.5%. The increase was primarily due~~ to i) the ~~amortized~~Company’s ~~$1.3~~holding ~~million~~company ~~consulting~~structure ~~service fees (see~~disclosures ~~Note~~set 4forth ~~(iii)~~in ofPart ~~the~~II, ~~accompanying~~Item ~~financial statements)~~7, ~~ii)~~“Management’s ~~the increase of $0.1 million professional fees during the~~Discussion ~~nine~~and ~~months~~Analysis ~~ended September 30, 2024, partially offset by iii) the accrued private placement agent fees~~ of ~~$1.2~~Financial ~~million~~Condition ~~related~~and toResults ~~the private placement consent agreement with representatives~~ of anOperations- ~~investment~~Holding ~~bank~~Company ~~firm~~Structure” ~~during the nine months ended September 30, 2023 (see Note 8 (ii)~~ of the ~~accompanying~~2024 ~~financial~~Form ~~statements)~~10-K.

~~Research~~Cash and Other Assets Transfers between the Holding Company and ~~Development~~Its ~~Expenses~~Subsidiaries

	For the Nine Months Ended September 30,						Change
(in US dollars, except percentage)	2024			2023			Amount		%
Research and Development Expenses	$	129,808		$	61,849		$	67,559		109.9	%
as a percentage of revenues		0.3	%		0.2	%				0.1	%

Please see “ITEM 7- Management’s Discussion and Analysis of Financial Condition and Results of Operations- Cash and Other Assets Transfers between the Holding Company and Its Subsidiaries” of the 2024 Form 10-K for more details.

~~Research and development (R&D) expenses were~~Capital ~~$129,808~~Expenditure ~~for the nine months ended September 30, 2024 compared to $61,849 in the same period in 2023, due to the increased R&D material consumption.~~ Commitment

~~Operating~~As of ~~Income~~March 31, 2025, the Company had commitment of RMB5.0 million (equivalent to $0.7 million) for construction in progress.

~~Total operating income was $9.5 million for the~~Off-Balance ~~nine~~Sheet months ended September 30, 2024 as compared to $14.7 million of the same period of last year, primarily due to lower gross profit, higher selling expenses, general & administration expenses and research and development expenses.Arrangements

~~Gain~~We had ~~(loss)~~no onoff-balance ~~changes~~sheet inarrangements ~~fair~~as ~~value~~ of ~~Common~~ ~~Stock~~March ~~Purchase~~31, ~~Warrants~~ 2025.

	For the Nine Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount		%
Gain (loss) on changes in fair value of Common Stock Purchase Warrants	$	0.2		$	(0.1	)	$	0.3		300.0	%
as a percentage of revenues		1.7	%		0.9	%				0.8	%

Critical Accounting Policies

~~Gain~~The preparation onof ~~changes~~financial statements and related disclosures in ~~fair~~conformity ~~value~~with GAAP and the Company’s discussion and analysis of its ~~common~~financial ~~stock~~condition and operating results require the Company’s management to make judgments, assumptions and estimates that ~~purchase~~affect ~~warrants~~the ~~was~~amounts $0reported. Note 2, ~~million~~“SUMMARY ~~and~~OF ~~loss~~SIGNIFICANT onACCOUNTING ~~changes~~POLICIES” of ~~$0.~~the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 ~~for~~of this Form 10-Q and in the ~~nine~~Notes ~~months~~to ~~ended~~Consolidated ~~September~~Financial 30Statements in Part II, Item 8 of the 2024 Form 10-K describe the significant accounting policies and ~~2023,~~methods ~~respectively~~used ~~(See~~in the preparation of the Company’s condensed ~~Note~~consolidated 9financial ~~(b))~~statements. There have been no material changes to the Company’s critical accounting estimates since the 2024 Form 10-K.

9Item 3. Quantitative and Qualitative Disclosures About Market Risk.

~~Interest~~Not applicable ~~Expenses~~for smaller reporting companies.

	For the Nine Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount		%
Interest Expenses	$	1.2		$	0.2		$	1.0		500.0
as a percentage of revenues		3.1	%		0.6	%				2.5	%

Item 4. Controls and Procedures.

~~For the nine months ended~~Evaluation ~~September 30, 2024 and 2023, the Company recognized interest expenses from cetain convertible promissory notes in the amount~~ of ~~$1,169,974 (mainly~~Disclosure ~~contributable~~Controls ~~to the default interest charges of $1,145,995 upon the repayment of the notes payable)~~ and ~~$211,383, respectively. (See Note 9 (a) of the accompanying financial statements).~~Procedures

~~Income~~Under supervision ~~Taxes~~and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”), we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2025, as a result of the material weakness identified below.

	For the Nine Months Ended September 30,						Change
(in millions, except percentage)	2024			2023			Amount			%
Income before Income Taxes	$	8.6		$	14.4		$	(5.8	)		(40.3	)%
Income Tax (Expense)		(2.7	)		(4.1	)		(1.4	)		(34.1	)%
Effective income tax rate		25.4	%		28.5	%					(3.1	)%

~~The~~In light ~~effective~~of ~~income~~this ~~tax~~material ~~rates~~weakness, ~~for~~we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. GAAP. Based on such analysis and notwithstanding the ~~nine~~identified ~~months~~material ~~ended~~weakness, ~~September~~management, including our 30Chief Executive Officer and Chief Financial Officer, ~~2024~~believe the unaudited condensed consolidated financial statements included in this Quarterly Report fairly represent in all material respects our financial condition, results of operations and ~~2023~~cash ~~were~~flows ~~25.4%~~at and 28for the periods presented in accordance with U.~~4%,~~S. ~~respectively~~GAAP.

~~Our~~Because of ~~PRC~~its ~~subsidiary~~inherent ~~Sichuan~~limitations, ~~Vtouch~~internal ~~had~~control ~~$106~~over financial reporting may not prevent or detect misstatements.7 ~~million~~ Projections of ~~cash~~any as evaluation of ~~September~~effectiveness ~~30,~~to ~~2024,~~future ~~which~~periods are ~~planned~~subject to bethe ~~indefinitely~~risk ~~reinvested~~that incontrols ~~PRC.~~may ~~The~~become ~~distributions~~inadequate ~~from~~because ~~our~~of ~~PRC~~changes ~~subsidiary~~in ~~are~~conditions, or that ~~subject~~the todegree of compliance with the ~~U.S.~~policies ~~federal~~or ~~income~~procedures ~~tax~~may atdeteriorate. ~~21%~~All internal control systems, ~~less~~no ~~any~~matter ~~applicable~~how ~~foreign~~well ~~tax~~designed, have ~~credits~~inherent limitations. ~~Due~~Therefore, even those systems determined to ~~our~~be ~~policy~~effective ofcan ~~indefinitely~~provide ~~reinvesting~~only reasonable assurance with respect ~~our~~to ~~earnings~~financial instatement ~~our~~preparation ~~PRC~~and ~~business~~presentation. Because of the inherent limitations of internal control, wethere ~~have~~is a risk that material misstatements may not ~~provided~~be ~~for~~prevented ~~deferred~~or ~~income~~detected ~~tax~~on ~~liabilities~~a ~~related~~timely tobasis ~~PRC~~by ~~withholding~~internal ~~income~~control ~~tax~~over onfinancial ~~undistributed~~reporting. However, these inherent ~~earnings~~limitations are known features of ~~our~~the ~~PRC~~financial ~~subsidiaries~~reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

~~Net Income~~Material Weakness

AsIn connection awith ~~result~~the audit of the ~~above~~financial ~~factors~~year ended December 31, 2024, we ~~had~~identified acertain ~~net~~control deficiencies in the design and ~~income~~operation of $5our internal controls over our financial reporting that constituted a material weakness in aggregation.9 ~~million~~A ~~for~~“material weakness” ~~the~~is ~~nine~~a ~~months~~deficiency, ~~ended~~or ~~September~~a 30combination of deficiencies, ~~2024~~in ~~compared~~internal tocontrol over financial reporting, such that there is a reasonable ~~net~~possibility ~~income~~that a material misstatement of ~~$10.3~~our ~~million~~company’s inannual ~~the~~or ~~same~~interim ~~period~~financial ofstatements ~~2023~~will not be prevented or detected on a timely basis.

~~Liquidity~~The material weaknesses related to internal control over financial reporting that was identified during the annual report of 2024 and ~~Capital~~still applied ~~Resources~~as of March 31, 2025 were:

~~Historically,~~● ~~our~~Lack ~~primary uses~~ of ~~cash~~competent ~~have~~financial ~~been to~~reporting ~~finance~~and ~~working~~accounting ~~capital~~personnel ~~needs.~~with Weappropriate ~~expect~~understanding ~~that~~of weU.S. ~~will~~GAAP beand ~~able~~financial toreporting ~~meet~~requirements ~~our needs~~ to ~~fund~~design ~~operations, capital expenditures~~ and ~~other commitments~~implement inkey ~~the~~controls ~~next~~over 12financial ~~months~~reporting ~~primarily with our cash and cash equivalents, operating cash flows and bank borrowings.~~process;

We● ~~may,~~Lack however, require additional cash resources due to changes in business conditions or other future developments. If these sources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of ~~additional~~risk ~~equity~~assessment orprocedures ~~equity-linked~~on ~~securities could~~internal ~~result~~controls ~~in additional dilution~~ to ~~stockholders.~~detect ~~The incurrence of indebtedness would result in increased debt service obligations and could result in operating and~~ financial ~~covenants~~reporting ~~that~~risks ~~would restrict operations. Financing may not be available~~ in ~~amounts~~a ortimely ~~on terms acceptable to us, or at all~~manner.

AsManagement believes ofthat ~~September~~the ~~30,~~material ~~2024,~~weaknesses wethat ~~had~~were ~~current~~identified ~~assets of~~did ~~$120.0~~not ~~million,~~have ~~consisting~~an ofeffect ~~$106.7~~on ~~million~~our infinancial ~~cash, $9~~results.7 ~~million in accounts receivable~~However, ~~$0.2~~management ~~million in inventories, and $3.4 million~~believes inthat ~~prepaid~~these ~~expenses and other current assets Our current liabilities as of September 30~~weaknesses, ~~2024~~if ~~were~~not ~~$3.4~~properly ~~million~~remediated, ~~which~~could isresult ~~comprised of $1.2 million~~ in ~~accounts~~a ~~payable,~~material ~~$0.4~~misstatement ~~million due to related parties, $1.0 million~~ in ~~income~~our ~~tax~~financial ~~payable,~~statements ~~and $0.8 million~~ in ~~accrued expenses~~future ~~and other current liabilities~~periods.

10Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

~~The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities for the nine months ended September 30, 2024 and 2023:~~10

	For the Nine Months Ended September 30,
(in US Dollar millions)	2024			2023
Net cash (used in) provided by operating activities	$	(0.7	)	$	9.0
Net cash used in investing activity		(0.1	)		-
Net cash provided by financing activities		8.0			39.9
Effect of foreign currency exchange rate changes on cash and cash equivalents		1.5			(6.2	)
Net increase in cash and cash equivalents		8.7			42.7
Cash and cash equivalents at the beginning of period		98.0			51.2
Cash and cash equivalents at the end of period	$	106.7		$	93.9

Management’s Plan to Remediate the Material Weakness

~~Operating~~Management has ~~Activities~~been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:

~~Net~~● ~~cash~~Identify ~~used~~gaps in ~~operating activities was $0.7 million for~~ the ~~nine~~Company’s ~~months~~skills ~~ended~~base ~~September 30, 2024 as compared to $9.0 million provided by operating activities for the same period of the last year, primarily due to (i) the decrease of $4.4 million net income~~ and the ~~increase~~expertise of ~~$0.3~~its ~~million~~staff ofrequired ~~gain on changes in fair value of common stock purchase warrants liability for the nine months ended September 30, 2024 as compared~~ to ~~the~~meet ~~same period of 2023, (ii)~~ the ~~decrease~~financial ofreporting ~~$0.2~~requirements ~~million in inventories, and $2.6 million in prepaid and other current assets, (iii) the decrease~~ of ~~$0.2 million~~a inpublic ~~income~~company; ~~tax payable~~ and $5.8 million in accrued expenses and other current liabilities, partially offset by (v) the decrease of $3.4 million in accounts receivable and the increase of $0.4 million in accounts payable for the nine months ended September 30, 2024.

~~Investing~~● ~~Activity~~Continue to cooperate with operation teams to ensure a control environment in place, and monitor the effectiveness of operations on existing controls and procedures.

~~Net~~● ~~cash~~Establish ~~used~~procedures into ~~investing~~assess ~~activity~~compliance ~~for~~requirements under the ~~nine months~~Sarbanes-Oxley ~~ended~~Act ~~September~~of ~~30,~~2002 ~~2024 was $0.1 million for~~ (the ~~purchase~~“Sarbanes-Oxley ofAct”) ~~property,~~and ~~plant~~improve ~~and~~overall ~~equipment~~internal control.

~~There~~During the ~~was~~first noquarter ~~cash~~of ~~flow~~2025, inthe ~~investing~~management ~~activities for~~has not addressed the ~~nine~~material ~~months~~weaknesses ~~ended~~on ~~September~~internal ~~30,~~control ~~2023~~and will continue to implement the above improvement plans to ensure our financial reporting in compliance with US GAAP and SEC filing requirements.

~~Financing~~The Company ~~Activities~~recognizes that the material weaknesses in its internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively. Because the Company’s remediation efforts are ongoing, it cannot provide any assurance that these remediation efforts will be successful or that its internal control over financial reporting will be effective as a result of these efforts.

~~Net~~The Company ~~cash~~will ~~provided~~continue byto ~~financing~~evaluate ~~activities~~and ~~for the~~work ~~nine~~to ~~months~~improve ~~ended~~its ~~September~~internal ~~30,~~control ~~2024~~over ~~was~~financial ~~$8.0~~reporting ~~million~~related to the identified material weaknesses, ~~including~~and ~~$9.0~~management ~~million~~may indetermine ~~net~~to ~~proceeds~~take ~~from~~additional ~~the~~measures ~~2024~~to ~~Public~~address ~~Offering~~control ~~and~~deficiencies ~~$0.4 million~~or indetermine ~~proceeds~~to ofmodify ~~interest-free~~the ~~advances~~remediation plan ~~from~~described aabove. ~~related~~The ~~party,~~Company ~~partially~~will ~~offset~~report bythe ~~$1.4~~progress ~~million~~and ~~repayment~~status of ~~convertible~~the ~~promissory~~above remediation efforts to the Audit Committee on a periodic ~~notes~~basis.

~~Net cash provided by~~Changes ~~financing activities for the nine months ended September 30, 2023 was $40.0 million, including $40.0 million~~ in ~~proceeds~~Internal ~~from~~Control ~~stock~~over ~~issuance in~~Financial ~~a private placement, partially offset by the repayment of $55,000 convertible promissory note payable.~~Reporting

As described ofabove, ~~September~~the ~~30,~~Company ~~2024,~~is ~~our~~taking ~~cash~~steps ~~and~~to ~~cash~~remediate ~~equivalents were~~the ~~$106~~material weakness noted above.7 ~~million~~Other than in connection with these remediation steps, asthere ~~compared~~have tobeen ~~$98.0~~no ~~million~~changes atin ~~December~~our internal control over financial reporting during the quarter ended March 31, ~~2023~~2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Days Sales Outstanding (“DSO”) has decreased to 60 days for the nine months ended September 30, 2024 from 77 days for the year ended December 31, 2023.~~11

~~The following table provides an analysis of the~~PART ~~aging~~II of- ~~accounts~~Other ~~receivable as of September 30, 2024 and December 31, 2023:~~Information

	September 30, 2024		December 31, 2023
–Current	$	3,877,220	$	3,740,488
–1-3 months past due		3,903,309		2,635,045
–4-6 months past due		1.952.229		1,079,719
Total accounts receivable	$	9,732,758	$	7,455,252

Item 1. Legal Proceedings.

11We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, can result in substantial cost and the diversion of our resources, including our management’s time and attention.

~~The majority~~ As of the ~~Company’s revenues~~date ~~and~~of ~~expenses~~this ~~were~~Quarterly ~~denominated in Renminbi (“RMB”)~~Report, ~~the~~we ~~currency~~are ofnot ~~the~~aware ~~People’s Republic~~ of ~~China.~~any ~~There~~material, ~~is no~~active, ~~assurance~~pending ~~that~~or ~~exchange~~threatened ~~rates~~to ~~between~~which the ~~RMB~~Company ~~and~~or ~~the~~any ~~U.S.~~of its ~~Dollar~~subsidiaries ~~will~~is ~~remain~~a ~~stable.~~party, ~~Inflation~~or ~~has~~to ~~not~~which ~~had~~any aof ~~material~~their ~~impact~~property onis ~~the Company’s business.~~subject

~~Based on past performance and current expectations,~~Item we2. ~~believe~~Unregistered ~~our~~Sales ~~cash~~of ~~and~~Equity ~~cash~~Securities ~~equivalents provided by operating activities~~ and ~~financing~~Use ~~activities~~of ~~will satisfy our working capital needs, capital expenditures and other liquidity requirements associated with our operations for at least the next 12 months.~~Proceeds

~~Holding~~Except as ~~Company~~previously ~~Structure~~reported in our Current Reports on Form 8-K, we did not undertake any unregistered sales of our equity securities during the quarter ended March 31, 2025.

~~There have been no changes~~During to the ~~Company’s~~quarter ~~holding company structure during the nine months~~ ended ~~September~~March 3031, ~~2024. For more details~~2025, ~~refer~~we todid ~~the~~not ~~Company’s holding~~repurchase ~~company~~any ~~structure~~shares ~~disclosures set forth in Part II, Item 7, “Management’s Discussion and Analysis~~ of ~~Financial~~our ~~Condition and~~common ~~Results of Operations- Holding Company Structure” of the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Form 10-K”)~~stock.

~~Cash and Other Assets~~Item ~~Transfers~~3. ~~between~~Defaults ~~the~~Upon ~~Holding~~Senior ~~Company and Its Subsidiaries~~Securities.

~~Commitments~~Item 4. ~~and~~Mine ~~Contingencies~~Safety Disclosures.

~~Contingencies~~Not applicable.

~~The Company’s common stock began trading~~Item ~~on the Nasdaq Capital Market under the ticker symbol “WETH” on February 21, 2024~~5. ~~The~~Other ~~Company failed to timely complete the filing procedures with China Securities Regulatory Commission (“CSRC”) on overseas initial public offering and transfer of listing as regulated below:~~Information.

~~1) Per Article 13 and Article 8 and Article 25 of CSRC Announcement (2023) No~~Not applicable. 43 -Trial Measures for the Administration of Overseas Issuance and Listing of Securities for Domestic Enterprises” (“Trial Measures” Announcement No. 43), which was implemented on March 31, 2023 (http://www.csrc.gov.cn/csrc/c101954/c7124478/content.shtml), when an issuer conducts an overseas initial public offering or listing, it shall submit overseas issuance and listing application documents to CSRC within three working days; When a domestic enterprise transfers its listing overseas, it shall comply with the requirements of the overseas first public listing requirements for issuance and listing, and shall file with the CSRC within 3 working days, after its submitting application documents for transfer and listing overseas.

2) Article 27 of Trial Measures Announcement No. 43 stipulates that if a domestic enterprise violates the provisions of Article 13 of these Measures and fails to perform the filing procedures, or violates the provisions of Articles 8 and 25 of these Measures for overseas issuance and listing, CSRC shall order it to make corrections and give a warning, and impose a fine of not less than RMB 1 million but not more than RMB 10 million.12

~~As of the date of this Quarterly Report, the Company~~Item ~~has not received any notice of penalty from the CSRC~~6. ~~Management will closely monitor any notice or action from CSRC.~~Exhibits

Capital Expenditure Commitment

Exhibit Number		Description of Document
3.1⁽¹⁾		Amended and Restated Articles of Incorporation of the Company, dated September 30, 2020.

3.2⁽¹⁾		Bylaws of the Company.

4.1⁽¹⁾		Specimen Common Stock Certificate.

4.2		Form of Underwriter’s Warrants.

4.3		Common Stock Purchase Warrant dated October 27, 2021 issued by Wetouch Technology Inc

4.4		Common Stock Purchase Warrant dated November 5, 2021 issued by Wetouch Technology Inc.

4.5		Common Stock Purchase Warrant dated November 16, 2021 issued by Wetouch Technology Inc.

4.6		Common Stock Purchase Warrant dated November 24, 2021 issued by Wetouch Technology Inc.

4.7		Common Stock Purchase Warrant dated November 29, 2021 issued by Wetouch Technology Inc.

4.8		Common Stock Purchase Warrant dated December 2, 2021 issued by Wetouch Technology Inc.

4.9		Common Stock Purchase Warrant dated December 2, 2021 issued by Wetouch Technology Inc.

31.1*		Certification of The Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of The Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**		Certification of The Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**		Certification of The Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.*

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.*

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.*

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.*

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.*

104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).*

As* ofFiled ~~September 30, 2024, the Company had commitment of RMB5.0 million (equivalent to $0.7 million) for construction in progress.~~herewith

Off Balance Sheet Arrangements

**	Furnished herewith

(1)	Filed as an exhibit to the Company’s registration statement on Form S-1, File No. 333-270726 and incorporated herein by reference.

~~We have no off balance sheet arrangements.~~ 13

12SIGNATURES

~~Critical~~In accordance ~~Accounting~~with ~~Policies~~ the requirements of Securities Exchange Act of 1934, the registrant has caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

The preparation of financial statements and related disclosures in conformity with GAAP and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2, “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2023 Form 10-K describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the 2023 Form 10-K.

	By:	/s/ Zongyi Lian
Date: October 8, 2025		Zongyi Lian
		Chief Executive Officer and President
		(Principal Executive Officer)

	By:	/s/ Xing Tang
Date: October 8, 2025		Xing Tang
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

~~Item 3. Quantitative and Qualitative Disclosures About Market Risk.~~14

Not applicable for smaller reporting companies.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Under supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (our “Certifying Officers”), we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2024. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of September 30, 2024, as a result of the material weaknesses identified below.

In light of the material weaknesses, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. GAAP. Based on such analysis and notwithstanding the identified material weaknesses, our management, including our Chief Executive Officer and Chief Financial Officer, believe the unaudited condensed consolidated financial statements included in this Quarterly Report fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

Material Weaknesses

In connection with the audit of the financial year ended December 31, 2023, we identified certain control deficiencies in the design and operation of our internal controls over our financial reporting that constituted a material weakness in aggregation. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses related to internal control over financial reporting that were identified in the 2023 Form 10-K and still applied as of September 30, 2024 were:

● Inadequate segregation of duties consistent with control objectives;

● Lack of formal policies and procedures; and

● Lack of risk assessment procedures on internal controls to detect financial reporting risks on a timely manner.

As a result, we were not able to achieve adequate segregation of duties and were not able to provide for adequate review of the financial statements.

Management’s Plan to Remediate the Material Weaknesses

Management has been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:

● Identify gaps in our skillset and the expertise of our staff required to meet the financial reporting requirements of a public company; and

● Continue to develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures;

During the nine months ended September 30, 2024, the management has not addressed the material weaknesses on internal control and will continue to implement the above improvement plans to ensure our financial reporting in compliance with US GAAP and SEC filing requirements.

The Company recognizes that the material weaknesses in its internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively. Because the Company’s remediation efforts are ongoing, it cannot provide any assurance that these remediation efforts will be successful or that its internal control over financial reporting will be effective as a result of these efforts.

The Company will continue to evaluate and work to improve its internal control over financial reporting related to the identified material weaknesses, and management may determine to take additional measures to address control deficiencies or determine to modify the remediation plan described above. The Company will report the progress and status of the above remediation efforts to the Audit Committee on a periodic basis.

Changes in Internal Control over Financial Reporting

As described above, the Company is taking steps to remediate the material weaknesses noted above. Other than in connection with these remediation steps, there have been no changes in our internal control over financial reporting during the nine months ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - Other Information

Item 1. Legal Proceedings.

From time to time, we may be subject to other legal proceedings arising in the ordinary course of business. Regardless of the outcome of any existing or future litigation, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

The information required with respect to this item can be found under “Commitments and Contingencies” in Note 13 to our condensed consolidated financial statements included elsewhere in this Form 10-Q and is incorporated by reference into this Item 1.

Item 1A. Risk Factors.

Except for the additional risk factors set forth below, there have been no material changes to our Risk Factors as disclosed in our 2023 Form 10-K and our quarterly reports on Form 10-Q, as filed with the SEC on April 17, 2024, June 14, 2024 and August 19, 2024, respectively.

We may incur material expenses or delays in financings or SEC filings due to the dismissal of BF Borgers and our stock price and access to the capital markets may be affected.

As a public company, we are required to file with the SEC financial statements that are audited or reviewed, as applicable, by an independent registered public accountant. Our access to the capital markets and our ability to make timely filings with the SEC will depend on having financial statements audited or reviewed again by a new independent registered public accounting firm. In addition, because the SEC found that BF Borgers CPA PC deliberately failed to conduct audits and quarterly reviews in accordance with applicable PCAOB standards and fraudulently issued audit reports, we will not be able to rely on BF Borgers (as defined herein) to provide other information or documents that would customarily be received by us or underwriters in connection with financings or other transactions, including consents and “comfort” letters. As a result, we may encounter delays, additional expense and other difficulties in future financings. Any resulting delay in accessing or inability to access the public capital markets could be disruptive to our operations and could affect the price and liquidity of our securities. Any negative news about the proceedings against BF Borgers may also adversely affect investor confidence in companies that were previous clients of BF Borgers. All of these factors could materially and adversely affect the market price of our common stock and our ability to access the capital markets.

You are unlikely to be able to exercise effective remedies or collect judgments against BF Borgers relating to their work as our independent registered public accounting firm.

BF Borgers served as our independent registered public accounting firm from 2020 to 2023. On May 3, 2024, the SEC entered an order instituting settled administrative and cease-and-desist proceedings against BF Borgers CPA PC (“Borgers”) and its sole audit partner, Benjamin F. Borgers CPA, permanently, barring Mr. Borgers and Borgers (collectively, “BF Borgers”) from appearing or practicing before the Commission as an accountant (the “Order”). As a result of the Order, BF Borgers may no longer serve as the Company’s independent registered public accounting firm, nor can BF Borgers issue any audit reports included in Commission filings or provide consents with respect to audit reports. In light of the Order, the Audit Committee of the board of directors of the Company (the “Audit Committee”) on May 9, 2024, unanimously approved to dismiss and dismissed BF Borgers as the Company’s independent registered public accounting firm and approved the engagement of Enrome LLP to serve as the Company’s new independent registered public accounting firm. The management has also decided to redo the annual audit for the year of 2023 by the end of 2024. We have no ability to ascertain whether BF Borgers will survive or that adequate assets will be available to satisfy any claims against it. As a result, you may not be able to exercise effective remedies or collection judgements against BF Borgers.

We may be subject to fines and penalties imposed by the Chinese government for having failed to complete the filing obligations required by the Trial Administrative Measures.

On February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Administrative Measures”), which took effect on March 31, 2023. Compared to the Draft Rules, the Trial Administrative Measures further clarified and emphasized several aspects, including: (i) comprehensive determination of the “indirect overseas offering and listing by Mainland China domestic companies” in compliance with the principle of “substance over form” and particularly, an issuer will be required to go through the filing procedures under the Trial Administrative Measures if the following criteria are met at the same time: a) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by Mainland China domestic companies, and b) the main parts of the issuer’s business activities are conducted in Mainland China, or its main places of business are located in Mainland China, or the senior managers in charge of its business operation and management are mostly Chinese citizens or domiciled in Mainland China; (ii) exemptions from immediate filing requirements for issuers that a) have already been listed or registered but not yet listed in foreign securities markets, including U.S. markets, prior to the effective date of the Trial Administrative Measures, and b) are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or the overseas stock exchange, c) whose such overseas securities offering or listing shall be completed before September 30, 2023. However, such issuers shall carry out filing procedures as required if they conduct refinancing or are involved in other circumstances that require filing with the CSRC; (iii) a negative list of types of issuers banned from listing overseas, such as issuers under investigation for bribery and corruption; (iv) regulation of issuers in specific industries; (v) issuers’ compliance with national security measures and the personal data protection laws; and (vi) certain other matters such as: an issuer must file with the CSRC within three business days after it submits an application for initial public offering to competent overseas regulators; and subsequent reports shall be filed with the CSRC on material events, including change of control or voluntary or forced delisting of the issuer(s) who have completed overseas offerings and listings. Our PRC counsel advised that because our common stock currently trades in the U.S., we were not required to submit filings to the CSRC before the Offering was completed and the Offering was not conditioned on CSRC approval. Rather, within three days of the closing of the Offering, we are required to submit filings to the CSRC in accordance with the Trial Administrative Measures. According to the relevant provisions of the Trial Administrative Measures and its supporting guidelines, the Company was advised that it was required to fulfill the filing procedures with the CSRC within three days of the closing of the Offering. According to the Trial Administrative Measures, the Company has submitted the filing materials to the CSRC, but the materials were not complete due to lack of a commitment letter from the lead underwriter for the Offering, and the Company withdrew the filing from the CSRC.

On May 7, 2024, the CSRC issued the “Regulatory Rules Application Guidelines, Category 7 for Overseas Issuance and Listing: Regulatory Requirements for Domestic Enterprises Transferring from Overseas OTC Markets to Overseas Stock Exchanges for Overseas Issuance and Listing.” The CSRC stated that, according to Articles 1 and 2 of the Trial Administrative Measures, overseas issuance and listing refer to activities related to issuing and listing on overseas stock exchanges, and the listing of domestic enterprises on overseas OTC markets does not fall within the scope of filing requirements. Article 16 of the Trial Administrative Measures stipulates that “an issuer’s initial public offering or listing overseas shall be filed with the CSRC within three working days after the submission of the application documents for issuance and listing overseas”; domestic enterprises transferring to overseas stock exchanges for listing should file with the CSRC within three working days after submitting the application documents for transfer listing overseas, in accordance with the relevant requirements for the initial public offering and listing overseas. Additionally, according to the “Notice on Filing Management Arrangements for Domestic Enterprises’ Overseas Issuance and Listing,” Mainland China domestic enterprises that submitted transfer listing application documents overseas but have not been approved by overseas regulatory authorities or overseas stock exchanges by March 31, 2023, the effective date of the Trial Administrative Measures, should complete the filing procedures before the overseas listing transfer is completed.

The CSRC has determined that we have failed to comply with the filing obligations imposed by the Trial Administrative Measures. As of the date of this Quarterly Report, the Company has not received any notice of penalty from the CSRC. Management will closely monitor any notice or action from CSRC. We have engaged a PRC counsel, K&H LAW FIRM, LLP (Chengdu), to complete the required filings with the CSRC and will submit the filing materials when ready. However, given that the Trial Administrative Measures were recently promulgated, there remain substantial uncertainties as to their interpretation, application, and enforcement and there is no guarantee that we can complete our filing obligations under the Trial Administrative Measures within a reasonable time. Furthermore, if the CSRC determines that there are misrepresentation, misleading statement or material omission in the materials we submit to the CSRC, the CSRC would have the right to order rectification, issue a warning and impose a fine on us of between RMB 1 million and RMB 10 million and issuing a warning to the parties responsible for such failure, misrepresentation or material omission and impose a fine on each of such individuals ranging from RMB 500,000 to RMB 5 million. Our operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

We cannot guarantee that our Repurchase Program will be fully consummated or that it will enhance long-term stockholder value. Repurchases of shares of our common stock could also increase the volatility of the trading price of our common stock and could diminish our cash reserves.

On July 2, 2024, the Board of the Company approved and authorized a stock repurchase program (the “Repurchase Program”), pursuant to which the Company intends to repurchase up to $15 million of its common stock, from time to time, for a purchase price of not less than $1.50 per share and not more than $4 per share, in the open market or privately negotiated transactions, with Westpark Capital, Inc. (“Westpark”) as the exclusive agent for the Repurchase Program. The Repurchase Program commenced on July 1, 2024, and will terminate on the date to be determined by the Board. The Repurchase Program does not have a fixed expiration date and may be suspended or discontinued at any time. The Repurchase Program will be terminated automatically upon the date that the aggregate purchases under the Repurchase Program reach $15 million. Pursuant to the Repurchase Program, the Company is not obligated to repurchase any specific number of shares of its common stock and shall not repurchase more than 25% of the average daily volume of its stock over the previous 20 trading days. The timing, manner, price, and amount of any repurchases will be determined by us at our discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. We cannot guarantee that the Repurchase Program will be fully consummated or that it will enhance long-term stockholder value. The Repurchase Program could also affect the trading price of our common stock and increase volatility, and any announcement of a reduction, suspension or termination of the Repurchase Program may result in a decrease in the trading price of our common stock. In addition, repurchasing our common stock could diminish our cash and cash equivalents and marketable securities available to fund working capital, repayment of debt, capital expenditures, strategic acquisitions, investments, or business opportunities, and other general corporate purposes, which may adversely affect our result of operations and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

Exhibit Number		Description of Document
10.1		Form of Director Offer Letter (1)
10.2		Form of the Executive Officer Agreement (2)
31.1*		Certification of The Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of The Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of The Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of The Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document.*
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.*
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).*

* Filed herewith

** Furnished herewith

(1) Incorporated herein by reference to Exhibit 10.31 to the Registrant’s Current Report on Form 8-K filed July 1, 2024.

(2) Incorporated herein by reference to Exhibit 10.31 to the Registrant’s Current Report on Form 8-K filed July 12, 2024.

SIGNATURES

In accordance with the requirements of Securities Exchange Act of 1934, the registrant has caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	By:	/s/ Zongyi Lian
Date: November 14, 2024		Zongyi Lian
		Chief Executive Officer and President
		(Principal Executive Officer)
	By:	/s/ Xing Tang
Date: November 14, 2024		Xing Tang
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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