Meiwu Technology H1 2026 loss widens to $15.8M
Share issuance generated $58,833,231 in financing cash flow, while cash and cash equivalents stood at $54,009,557 on June 30, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Meiwu Technology (WNW) reported unaudited six-month revenue of $4,867,853 for the period ended June 30, 2026, compared with $2,477,852 in 2025. Gross profit was $628,911 versus $317,723, while net loss was $15,847,413 versus $1,361,018. Operating expenses totaled $16,486,520, including $11,737,249 in sales and marketing and $3,509,400 in research and development, compared with total operating expenses of $1,693,065 in 2025.
Operating activities used $17,192,328 in cash, compared with $6,727,940 provided a year earlier; financing activities provided $58,833,231 from share issuance. Cash and cash equivalents were $54,009,557 at June 30, 2026, versus $17,884,684 at December 31, 2025, and working capital was $59.75 million versus $19.49 million. The company had 26,330,471 ordinary shares issued and outstanding at June 30, 2026. Shareholders approved a dual-class structure on September 15, 2026: Class B shares are entitled to 150 votes per share and Class A shares to one vote, with identical economic rights. The amended and restated memorandum and articles became effective October 1, 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointRevenue was $4,867,853, compared with $2,477,852 in 2025.
Negative
- Major pointNet loss was $15,847,413, versus $1,361,018 in 2025.
- Moderate pointOperating cash use was $17,192,328, versus $6,727,940 provided in 2025.
Filing Explained
The final charter filing identifies the voting split: as of
Key Figures
Key Terms
Variable Interest Entity technical
working capital financial
right-of-use assets financial
accumulated other comprehensive loss financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did WNW report for the first half of 2026?
What was WNW's net loss in the first half of 2026?
What was WNW's working capital at June 30, 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2026
Commission File Number: 001-39803
Meiwu Technology Company Limited
(Translation of registrant’s name into English)
Unit 304-3, No. 19, Wanghai Road, Siming District
Xiamen, Fujian, People’s Republic of China, 361000
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Explanatory Note
Meiwu Technology Company Limited (the “Company”) hereby furnishes the following documents as exhibits to this report: “Unaudited Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2026 and 2025” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
As previously disclosed on September 15, 2026, the shareholders of the Company approved and adopted an amended and restated memorandum and articles of association (the “M&A”), substantially in the form attached as Annex A to the notice of extraordinary general meeting of shareholders, which was furnished as Exhibit 99.1 to the Company’s Report on Form 6-K filed on August 11, 2026. The Company hereby furnishes the final copy of the M&A as exhibit to this report.
This Form 6-K is hereby incorporated by reference into the registration statement on Form F-3 (File No. 333-292111) of the Company to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
EXHIBIT INDEX
| Exhibit No. | Description | |
| 1.1 | Amended and restated memorandum and articles of association, effective on October 1, 2026 | |
| 99.1 | Unaudited Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2026 and 2025 | |
| 99.2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| 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 Label Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 104 | Cover Page Interactive Data File formatted as Inline XBRL and contained in Exhibit 101) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Meiwu Technology Company Limited | ||
| By: | /s/ Changbin Xia | |
| Changbin Xia | ||
| Chairman of the Board | ||
Date: November 4, 2026
Exhibit 99.1
MEIWU TECHNOLOGY COMPANY LIMITED AND SUBSIDIARIES
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
| Page | |
| Unaudited Condensed Consolidated Financial Statements | |
| Unaudited Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 | F-2 |
| Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Six Months Ended June 30, 2026 and 2025 | F-3 |
| Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2026 and 2025 | F-4 |
| Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 | F-5 |
| Notes to Unaudited Condensed Consolidated Financial Statements | F-6 - F-24 |
| F-1 |
MEIWU TECHNOLOGY COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In U.S. dollars, except for share and per share data, or otherwise noted)
| June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Advances to suppliers, net | ||||||||
| Inventories, net | ||||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets: | ||||||||
| Property and Equipment, net | - | |||||||
| Right-of-use assets | ||||||||
| Intangible Assets,net | ||||||||
| Total Non-Current Assets | ||||||||
| TOTAL ASSETS | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | ||||||||
| Contract liabilities | ||||||||
| Lease liabilities | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities: | ||||||||
| Lease liabilities | ||||||||
| Total Non-Current Liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitment and Contingencies | - | - | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Ordinary Shares, | - | - | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Equity attributable to owners of the Company | ||||||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
| * |
See accompanying notes to unaudited condensed consolidated financial statements.
| F-2 |
MEIWU TECHNOLOGY COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
COMPREHENSIVE
LOSS
(In U.S. dollars, except for share and per share data, or otherwise noted)
| 2026 | 2025 | |||||||
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| NET REVENUE | $ | $ | ||||||
| COST OF REVENUE | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Sales and Marketing Expenses | ||||||||
| General and Administrative Expenses | ||||||||
| Research and Development Expenses | - | |||||||
| Total operating expenses | ||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ||||
| Bad debt written off | - | ( | ) | |||||
| Loss on disposal of subsidiary | - | ( | ) | |||||
| Other Incomes, net | ||||||||
| LOSS BEFORE INCOME TAX | ( | ) | ( | ) | ||||
| Income tax benefits | - | |||||||
| NET LOSS | ( | ) | ( | ) | ||||
| OTHER COMPREHENSIVE LOSS | ||||||||
| Foreign Currency Translation Adjustment | ( | ) | ||||||
| TOTAL COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | ||
| LOSS PER SHARE – BASIC AND DILUTED | ( | ) | ( | ) | ||||
| WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC AND DILUTED* | ||||||||
| * |
See accompanying notes to unaudited condensed consolidated financial statements.
| F-3 |
MEIWU TECHNOLOGY COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(In U.S. dollars, except for share and per share data, or otherwise noted)
| Number of Shares* | Amount | Paid-in Capital | Accumulated Deficit | Comprehensive Loss | controlling interests | Stockholders’ Equity | ||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||
| Ordinary Shares | Additional | Other | Non- | Total | ||||||||||||||||||||||||
| Number of Shares* | Amount | Paid-in Capital | Accumulated Deficit | Comprehensive Loss | controlling interests | Stockholders’ Equity | ||||||||||||||||||||||
| Balance as of December 31, 2025 | - | ( | ) | ( | ) | - | ||||||||||||||||||||||
| Issuance of shares due to roundup of fractional shares in share consolidation | - | - | - | - | - | - | ||||||||||||||||||||||
| Issuance of shares of common stock | - | - | - | - | ||||||||||||||||||||||||
| Net Loss | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Foreign Currency Translation Adjustment | - | - | - | - | ( | ) | - | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2026 | - | ( | ) | ( | ) | - | ||||||||||||||||||||||
| Ordinary Shares | Accumulated | |||||||||||||||||||||||||||
| Number of Shares* | Amount | Additional Paid-in Capital | Accumulated Deficit | Other Comprehensive Loss | Non- controlling interests | Total
Stockholders’ Equity | ||||||||||||||||||||||
| Balance as of December 31, 2024 | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Disposal of subsidiaries | - | - | - | - | - | |||||||||||||||||||||||
| Net Loss | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Foreign Currency Translation Adjustment | - | - | - | - | - | |||||||||||||||||||||||
| Balance as of June 30, 2025 | - | ( | ) | ( | ) | - | ||||||||||||||||||||||
| * |
See accompanying notes to unaudited condensed consolidated financial statements.
| F-4 |
MEIWU TECHNOLOGY COMPANY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollars, except for share and per share data, or otherwise noted)
| For the six months ended | ||||||||
| June 30, | ||||||||
2026 (Unaudited) | 2025 (Unaudited) | |||||||
| Cash flows from operating activities: | ||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash from operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of right-of-use assets | ||||||||
| Provision for credit losses | ||||||||
| Loss on disposal of subsidiaries | - | |||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ( | ) | ( | ) | ||||
| Inventories, net | ( | ) | ( | ) | ||||
| Other current assets | ( | ) | ||||||
| Advances to suppliers, net | ||||||||
| Accounts payable | ( | ) | ||||||
| Contract liabilities | ||||||||
| Tax payable | - | |||||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Accrued expenses and other current liabilities | ||||||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| Cash flows from investing activities: | ||||||||
| Purchase of intangible assets | ( | ) | ( | ) | ||||
| Purchase of property and equipment | ( | ) | - | |||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayment of related party loans | - | ( | ) | |||||
| Issuance of shares of common stock | - | |||||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Effect of changes of foreign exchange rate on cash | ( | ) | ||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash and cash equivalents at the Beginning of the period | ||||||||
| Cash and cash equivalents at the end of the period | $ | $ | ||||||
| Supplemental disclosures of non-cash flows information: | ||||||||
| Lease liabilities arising from obtaining right-of-use assets | ||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
| F-5 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS BACKGROUND
Meiwu Technology Company Limited (“Meiwu” or the “Company”), formerly known as Wunong Net Technology Co., Ltd is a holding company incorporated under the laws of British Virgin Islands on December 4, 2018. The Company, its subsidiaries and the former consolidated variable interest entity (the “former VIE”) are principally engaged in the provision of skin care products selling, skin care training services to customers in the People’s Republic of China (the “PRC”).
On February 15, 2019, the Company acquired all shares of Shenzhen Vande Technology Co., Limited (“Vande”) pursuant to the Instrument of Transfer, Sold Note and Bought Note recorded with Registrar of Companies in Hong Kong Special Administration Region (SAR).
Vande,
incorporated on April 6, 2017 in Hong Kong, incorporated Guogangtong Trading (Shenzhen) Co., Ltd. (“WFOE”) in the People’s Republic of China with
a registered capital of RMB
On
March 2, 2019, WFOE entered into a series of contractual agreements with Meiwu Zhishi Technology (Shenzhen) Co., Ltd. (“Meiwu
Zhishi”, “Meiwu Shenzhen” or “former VIE”), a company incorporated in the People’s Republic of
China on June 16, 2015 with a registered capital of RMB
| ● | exercise effective control over Meiwu Shenzhen; | |
| ● | receive substantially all of the economic benefits of Meiwu Shenzhen; and | |
| ● | have an exclusive option to purchase all or part of the equity interests in Meiwu Shenzhen when and to the extent permitted by PRC law. |
As a result of these contractual arrangements, we had become the primary beneficiary of Meiwu Shenzhen, and we treated Meiwu Shenzhen as a Variable Interest Entity (“VIE”) in accordance with the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 “Consolidation”, because the equity investments in Meiwu Shenzhen no longer have the characteristics of a controlling financial interest, and the Company, through WFOE, is the primary beneficiary of Meiwu Shenzhen. Accordingly, Meiwu Shenzhen has been consolidated.
Since Meiwu Technology Company Limited and its subsidiaries are effectively controlled by the same controlling shareholders before and after the Reorganization, they are considered to be under common control. The above-mentioned transactions were accounted for as a recapitalization. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.
| F-6 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS BACKGROUND (CONTINUED)
On
September 29, 2020, Meiwu Shenzhen, together with two individuals, Guoming Huang (“Huang”) and Yafang Liu
(“Liu”), established a new Shanghai subsidiary, Wude Agricultural Technology (Shanghai) Co., Ltd (“Wude
Shanghai”). Wude Shanghai’s registered capital is RMB
On
October 20, 2020, Meiwu Shenzhen entered into an Equity Transfer Agreement to acquire
On
November 4, 2020, Meiwu Shenzhen incorporated a wholly-owned subsidiary, Wunong Technology (Liaoning) Co., Ltd (“Wunong Liaoning”).
Wunong Liaoning’s registered capital is RMB
On
December 10, 2020, Meiwu Shenzhen incorporated a wholly-owned subsidiary, Wunong Technology (Shaanxi) Co., Ltd (“Wunong Shaanxi”).
Wunong Shaanxi’s registered capital is RMB
On
December 17, 2020, the Company completed the initial public offering (“IPO”) of
On November 23, 2021, the Company entered into a Stock Purchase Agreement (“SPA”) with Boxinrui International Holdings Limited (the “Anxin BVI”) to acquire Beijing Anxin Jieda Logistics Co., Ltd. (“Anxin”). As of March 11, 2022, Anxin BVI failed to deliver the audited financial statements of Anxin for the year ended December 31, 2020 and 2019. The parties entered into a termination agreement, (the “Termination Agreement”) pursuant to terminate the transaction.
| F-7 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS BACKGROUND (CONTINUED)
On
December 28, 2021, Meiwu Shenzhen sold the
On
March 31, 2022, the Company entered into a Stock Purchase Agreement (“SPA”) with Magnum International Holdings Limited (the
“Yundian BVI”) to acquire Dalian Yundian Zhiteng Technology Company Limited (“Yundian”). Upon the closing, the
Company shall deliver to the Yundian BVI total consideration of US$
On
May 12, 2022, Meiwu Shenzhen, together with Shenzhen Heme Enterprise Consulting Partnership (limited partnership) (“Heme Consulting”),
established a new Shenzhen subsidiary, Heme Brand Chain Management (Shenzhen) Co., Ltd. (“Heme Shenzhen”). Heme Shenzhen’s
registered capital is RMB
On
June 23, 2022, we entered into a Share Purchase Agreement (“SPA”) with Mahaotiaodong Information Technology Company
Limited, a British Virgin Islands business company (the “Mahao BVI”), and all the shareholders of Mahao BVI, who
collectively hold
On
July 22, 2022, Heme Shenzhen established a new Shenzhen subsidiary, Heme Catering Management (Shenzhen) Co., Ltd (“Heme Catering”).
Heme Catering’s registered capital is RMB
On October 31, 2022, the Company changed the name from “Wunong Technology (Shenzhen) Co,. Ltd” to Meiwu Zhishi Technology (Shenzhen) Co,. Ltd.
On
December 12, 2022, the Company entered into a Stock Purchase Agreement (“SPA”) with Xinfuxin International Holdings Limited
(the “Yuanxing BVI”) to acquire Hunan Yuanxing Chanrong Technology Co., Ltd (“Yuanxing”). Upon the closing, the
Company shall deliver to the Yuanxing BVI total consideration of US$
On
May 4, 2023, the VIE, Meiwu Shenzhen, together with an individual, Kun Xu (“Kun”) and an entity, Xi ‘an Senli Huinong
Agricultural Technology Co. LTD (“Senli Huinong”), established a new subsidiary in Shenzhen, China, Shenzhen Jiayuan Liquor
Sales Co., Ltd (“Jiayuan Liquor”). Jiayuan Liquor’s registered capital is RMB
On
February 21, 2024 under the incentive plan registered of the Company issuance of
On September 3, 2024, Shenzhen Vande Technology Co., Limited (“Vande”) a limited company organized under the laws of Hong Kong and a wholly owned subsidiary of Meiwu Technology Company Limited, a British Virgin Islands company (the “Company”), incorporated a limited liability company under the laws of People’s Republic of China with the name of Xiamen Chunshang Health Technology Co., Ltd. (the “Xiamen Chunshang”). As previously disclosed, the Company was planning to implement a strategic transition in its business to expand into the sales of functional skincare products.
On December 10, 2024, Guogangtong Trading (Shenzhen) Co., Ltd. (“WFOE”), the wholly owned subsidiary of Vande entered into an agreement (the “Termination Agreement”) with Meiwu Zhishi Technology (Shenzhen) Co., Ltd. (“Meiwu Zhishi”, “Meiwu Shenzhen” or “former VIE”), former VIE’s shareholders to terminate of a series of contractual arrangements (“former VIE Agreements”) by and among the former VIE, the WFOE, and shareholders of the former VIE (“Termination”).
On
December 24, 2024, the Company, Magnum International Holdings Limited, a British Virgin Islands company with limited liabilities and
a wholly owned subsidiary of the Company (“Magnum”) and an individual that is not affiliated with the Company or any of its
directors or officers (the “Purchaser”) entered into a certain share transfer agreement (“Magnum Disposition Agreement”).
Pursuant to the Magnum Disposition Agreement, the Purchaser agreed to purchase all the equity interests of Magnum for $
On
December 24, 2024, the Company, Xinfuxin International Holdings Limited, a British Virgin Islands company with limited liabilities and
a wholly owned subsidiary of the Company (“Xinfuxin”) and the same Purchaser entered into a certain share transfer agreement
(“Xinfuxin Disposition Agreement”, collectively with the Termination Agreement and Magnum Disposition Agreement, the “Agreements”).
Pursuant to the Xinfuxin Disposition Agreement, the Purchaser agreed to purchase all the equity interests of Xinfuxin for $
On March 6, 2025, Xiamen Chunshang incorporated a limited liability company under the laws of People’s Republic of China with the name of Guangzhou Tianhe District Chunran Health Consulting Co., Ltd. (the “Chunran Guangzhou”).
| F-8 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS BACKGROUND (CONTINUED)
As of June 30, 2026, details of the subsidiaries of the Company are set out below:
SCHEDULE OF SUBSIDIARIES AND ASSOCIATES
| Name of Entity | Date of Incorporation | Place of Incorporation | % of Ownership | Principal Activities | ||||
| Meiwu Technology Company Limited (“Meiwu” or the “Company”, formerly known as Wunong Net Technology Company Limited) | ||||||||
| Shenzhen Vande Technology Co., Limited (“Vande”) | ||||||||
| Mahaotiaodong Information Technology Company Limited (“Mahao BVI”) | ||||||||
| Xiamen Chunshang Health Technology Co., Ltd (“Xiamen Chunshang”) | ||||||||
| Guangzhou Tianhe District Chunran Health Consulting Co., Ltd (“Chunran Guangzhou”) | ||||||||
| Guo Gang Tong Trade (Shenzhen) Co., Ltd (“WFOE”) | ||||||||
| DELIMOND Limited (“DELIMOND”) | ||||||||
| Code Beating (Xiamen) Technology Company Limited (“Code Beating”) |
| F-9 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. LIQUIDITY
The
Company had cash of $
In assessing liquidity, management monitors and analyses cash on hand, ability to generate sufficient revenue sources in the future, and operating and capital expenditure commitments.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
● Basis of presentation and principles of consolidation
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below.
The consolidated financial statements include the financial statements of the Company its subsidiaries and the former VIE. All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meetings of the board of directors or to govern the financial and operating activities. The consolidation of all entities have been accounted for in accordance with ASC 810.
● Consolidation of former Variable Interest Entity
A VIE is an entity that either has a total equity investment that is insufficient to finance its activities without additional subordinated financial support, or whose equity investments lack the characteristics of a controlling financial interest, such as through voting rights, and the right to receive the expected residual returns of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary of, and must consolidate, the VIE.
Guo Gang Tong Trade (Shenzhen) Co., Ltd was deemed to have a controlling financial interest in and be the primary beneficiary of Meiwu Shenzhen, the former VIE, because it had both of the following characteristics prior to the Termination:
| (1) | The power to direct activities at Meiwu Shenzhen that most significantly impact such entity’s economic performance, and | |
| (2) | The right to receive benefits from Meiwu Shenzhen that could potentially be significant to such entity. |
Prior to the Termination, pursuant to the contractual arrangements with Meiwu Shenzhen, Meiwu Shenzhen paid service fees equal to all of its net profit after tax payments to WFOE. Such contractual arrangements were designed so that Meiwu Shenzhen operated for the benefit of Guo Gang Tong Trade (Shenzhen) Co. Ltd and ultimately, the Company.
| F-10 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
● Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used to account for contingencies, allowance for credit loss of account receivable, impairment of long-lived assets and useful lives of property and equipment and intangible assets. Actual results could differ from those estimates.
● Business combinations
The Company accounted for its business combination using the acquisition method of accounting in accordance with ASC 805 “Business Combinations”. The cost of an acquisition is measured as the aggregate of the acquisition date fair values of the assets transferred and liabilities incurred by the Company to the sellers and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total costs of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the acquisition date amounts of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated income statements. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Subsequent to the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any further adjustments are recorded in the consolidated statements of operating and comprehensive income/(loss).
In a business combination achieved in stages, the Company re-measures the previously held equity interest in the acquiree immediately before obtaining control at its acquisition date fair value and the re-measurement gain or loss, if any, is recognized in the consolidated income statements.
When there is a change in ownership interests or a change in contractual arrangements that results in a loss of control of a subsidiary, the Company deconsolidates the subsidiary from the date control is lost. Any retained non-controlling investment in the former subsidiary is measured at fair value and is included in the calculation of the gain or loss upon deconsolidation of the subsidiary.
● Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, cash in bank with no restrictions, as well as highly liquid investments which are unrestricted as to withdrawal or use, and which have remaining maturities of three months or less when initially purchased.
● Accounts receivable, net
Accounts receivable, net mainly represent amounts due from clients and are recorded net of allowance for doubtful accounts.
Since January 1, 2024, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets.
The Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “General and administrative expenses” in the unaudited condensed consolidated statements of operations. The Company assesses collectability by reviewing accounts receivable on aging schedules because the accounts receivable was primarily consisted of receivables arising from provision of Sales of functional skincare products and health products or Training services. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Delinquent account balances are written off against the allowance for expected credit loss.
The
Company mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful
accounts is established and recorded based on management’s assessment of historical bad debts, creditworthiness and financial conditions
of the clients, current economic trends and changes in client payment patterns. Past due accounts are generally written off against the
allowance for bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The
allowance was $
| F-11 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
● Inventories, net
The Company values its inventories at the lower of cost or net realizable value. The cost of inventories is calculated using the first in first out basis.
Where there is evidence that the utility of inventories, in their disposal in the ordinary course of business, will be less than cost, whether due to physical deterioration, obsolescence, changes in price levels, or other causes, the inventories are written down to net realizable value. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. Any idle facility costs or excessive spoilage are recorded as current period charges. There was no inventory impairment for the six months ended June 30, 2026 and 2025.
● Advances to suppliers
Advances
to suppliers represent prepayments made to the parties who transfer trademarks and patents, the certain suppliers of quality food products
and the suppliers of SMS service. The Company reviews its advances to suppliers on a periodic basis and makes general and specific allowances
when there is doubt as to the ability of a supplier to provide supplies to the Company or refund the advance. As of June 30, 2026 and
December 31, 2025, the allowances charged to consolidated statements of operations and comprehensive income/(loss) was nil and $
● Property and equipment
Property and equipment, net are stated at cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use. Depreciation expenses are included in general and administrative expenses. The estimated useful lives are as follows:
SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT
| Estimated Useful Life | ||
| Electronic equipment |
● Intangible Assets, net
Finite-lived intangible assets are carried at cost less accumulated amortization and impairment, if any. Finite-lived intangible assets are amortized using the straight-line method over the estimated useful lives as below:
SCHEDULE OF FINITE LIVED INTANGIBLE ASSETS AMORTIZED
| Estimated Useful Life | ||
| Trademarks | ||
| Patents | ||
| Online platform | ||
| Customer Relationships |
The
Company estimates the useful life of the trademarks and patents based on the contract terms, expected technical obsolescence and innovations
and industry experience of such intangible assets. The accumulated impairment of intangible
assets as of June 30, 2026 and 2025 was $
● Accounts payable
Accounts payable represent liabilities for goods or services provided to the Company prior to the end of the financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.
● Accrued expenses and other current liabilities
Accruals and other payables primarily include accrued expenses for the operation of the ordinary course of business.
● Leases
From January 1, 2022, the Group adopted Accounting Standards Update (“ASU”) 2016-02, Lease (FASB ASC Topic 842). The adoption of Topic 842 resulted in the presentation of operating lease right-of-use (“ROU”) assets and operating lease liabilities on the consolidated balance sheet. The Group has elected the package of practical expedients, which allows the Group not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption date. Lastly, the Group elected the short-term lease exemption for all contracts with lease terms of 12 months or less.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Group assess whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from the use of the asset and whether it has the right to control the use of the asset.
The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease term.
Right-of-use of assets
The Company recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. All right-of-use assets are reviewed for impairment annually. There was no impairment for right-of-use lease assets for the six months ended June 30, 2026 and 2025.
| F-12 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Lease liabilities
Lease liability is initially measured at the present value of the outstanding lease payments at the commencement date, discounted using the Group’s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase option that the Group is reasonably certain to exercise. Lease liability is measured at amortized cost using the effective interest rate method. It is re-measured when there is a change in future lease payments, if there is a change in the estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Group assessment of option purchases, contract extensions or termination options.
● Impairment of long-lived assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition below are the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There were no indicators of impairments of these assets as of June 30,2026 and December 31, 2025.
● Revenue recognition
ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. This new guidance provides a five-step analysis in determining when and how revenue is recognized. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the new guidance requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.
The Company currently generates its revenue from the following main sources:
Sales offline
In the second half of 2024 and the year ended December 31,2025, the Company started offline sales which mainly focused on the non-retail customers. For the offline sales, the customers’ order goods from the Company according to their own needs, then the Company will order the corresponding products from the suppliers. The Company’s offline sales have the following categories: functional skincare products and health products. The Company was a principal because it controlled the promised good or service before transferring it to a customer. Once purchase orders are received from customers, the Company purchases desired products from suppliers, takes control of purchased products in its warehouses, and then organizes the shipping and delivery of products to customers. New customers are typically required to make certain prepayment to the Company before the Company purchases products from suppliers.
The Company accounts for revenue from sales of functional skincare products and health products on a gross basis. It is responsible for fulfilling the promise to provide the desired functional skincare products and health products to customers, is subject to inventory risk prior to transfer control, and has the discretion in establishing prices.
Revenues are recorded net of return allowances and sales incentives. For sales through offline channels, the Company’s sales terms do not provide a right of return beyond a standard quality policy. The Company bases its estimates of sales return on historical results. For the six months ended June 30, 2026, the amount of sales return was insignificant. The Company may provide sales incentives in the form of discounts to customers, which can be determined before the customer placed the order. Revenue, recognized on a net basis after such sales incentives, are allocated based on the relative standalone selling prices for respective products.
Payment terms for distributing customers are generally set 30 days after the consideration becomes due and payable.
Advance payments from customers are recorded as contract liabilities and are recognized as revenue when the products are delivered and the performance obligation is satisfied. The Company does not routinely allow product returns, and historically, returns have been immaterial. There are no separate rebates, discounts, or volume incentives offered.
| F-13 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Service revenue
The Company generates revenue from providing training services under separate contracts to customers as a principal. The terms of pricing stipulated in the contracts are fixed. One performance obligation is identified in the contracts with customers. Revenue is recognized upon the transfer of control of promised services provided to the Company’s customers, in the amount of consideration the Company expect to receive for those services (excluding sales taxes collected on behalf of government authorities). Accordingly, revenue is recognized at the point in time when the service is successfully provided, which is evidenced by the customer’s acknowledgement of completion of such service. The Company’s revenue contracts generally do not include a right of return in relation to the delivered products or services.
● Cost of revenues
The shipping and handling costs as well as the cost of purchased Functional skincare products and Clean Food products listed for sale on the Company’s platform are included as part of cost of goods sold. The Company expenses shipping and handling costs in conjunction with sale of its products as incurred.
● Sales and marketing expense
Advertising, sales and marketing costs consist primarily of costs for the promotion of business brand and product marketing. The Company expensed all marketing and advertising costs as incurred.
● Research and development expense
Research and development expenditures include salaries, wages and other costs of personnel engaged in research and development. Costs of services performed by others for research and development on the Company’s behalf are expensed when incurred. The Company’s research and development expense primarily includes software development and the development of new products.
● Income taxes
The Company is subject to the income tax laws of the PRC. The Company accounts for income taxes in accordance with ASC740, “Income Taxes”. The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, the provision for income taxes represents income taxes paid or payable (or received or receivable) for the current year plus the change in deferred taxes during the year. Deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid, and result from differences between the financial and tax bases of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when enacted.
Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. In evaluating the need for a valuation allowance, management considers all potential sources of taxable income, including income available in carryback periods, future reversals of taxable temporary differences, projections of taxable income, and income from tax planning strategies, as well as all available positive and negative evidence. Positive evidence includes factors such as a history of profitable operations, projections of future profitability within the carryforward period, including from tax planning strategies, and the Company’s experience with similar operations. Existing favorable contracts and the ability to sell products into established markets are additional positive evidence. Negative evidence includes items such as cumulative losses, projections of future losses, or carryforward periods that are not long enough to allow for the utilization of a deferred tax asset based on existing projections of income. Deferred tax assets for which no valuation allowance is recorded may not be realized upon changes in facts and circumstances, resulting in a future charge to establish a valuation allowance.
Tax benefits related to uncertain tax positions taken or expected to be taken on a tax return are recorded when such benefits meet a more likely than not threshold. Otherwise, these tax benefits are recorded when a tax position has been effectively settled, which means that the statute of limitation has expired or the appropriate taxing authority has completed their examination even though the statute of limitations remains open. Interest and penalties related to uncertain tax positions are recognized as part of the provision for income taxes and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law until such time that the related tax benefits are recognized. There were no material uncertain tax positions as of June 30, 2026 and 2025. All tax returns since the Company’s inception are subject to examination by tax authorities.
● Value added taxes (“VAT”)
Sales represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on inventory acquired. The Company recorded a VAT payable net of payments in the accompanying financial statements. All of the VAT returns of the Company have been and remain subject to examination by the tax authorities for five years from the date of filing.
As
of June 30, 2026, “Xiamen Chunshang” ‘s
As
of June 30, 2026, “Chunran Guangzhou” ‘s
| F-14 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
● Foreign currency transactions and translations
An entity’s functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. The functional currency of the Company is the Renminbi (“RMB’), and PRC is the primary economic environment in which the Company operates. The reporting currency of these combined financial statements is the United States dollar (“US Dollars” or “$”).
For financial reporting purposes, the financial statements of the Company, which are prepared using the RMB, are translated into the Company’s reporting currency, the United States Dollar. Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and shareholders’ equity is translated at historical exchange rates when capital transaction occurred. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange differences are included in the determination of net loss of the consolidated financial statements for the respective periods.
The exchange rates used for foreign currency translation were as follows (US Dollars $1 = RMB):
SCHEDULE OF FOREIGN CURRENCY TRANSLATION EXCHANGE RATES
| Period/Year End | Average | |||||||
| 06/30/2026 | ||||||||
| 12/31/2025 | ||||||||
| 06/30/2025 | ||||||||
No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation.
● Comprehensive loss
Comprehensive loss is defined as the change in equity of the Company during a period from transactions and other events and circumstances excluding those resulting from investments by and distributions to shareholders. Accumulated other comprehensive loss, as presented on the accompanying consolidated balance sheets, only consists of cumulative foreign currency translation adjustment.
| F-15 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
● Fair value of financial instruments
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| ● | Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; | |
| ● | Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g., Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
| ● | Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. |
Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash and cash equivalents , restricted cash, accounts receivable, inventories, and other current assets, accounts payable, due to related parties, accrued expenses, and other current liabilities approximate the fair value of the respective assets and liabilities as of June 30, 2026 and December 31, 2025 based upon the short-term nature of the assets and liabilities. For operating lease liabilities, fair value approximates their carrying value at the year-end as the fair value is estimated by used discounted cash flow, in which incremental borrowing rates used to discount the host contracts approximate market rates. For the six months ended June 30, 2026 and 2025, there were no transfers between different levels of inputs used to measure fair value.
● Concentration risk
A
majority of the Company’s transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’
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”). 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 affect the remittance. Under
PRC regulations, each bank account is insured by People’s bank of China with the maximum amount of RMB
For the six months ended June 30, 2026 and 2025, most of the Company’s assets were located in the PRC and all of the Company’s revenues were derived from the PRC.
For
the six months ended June 30, 2026, three major suppliers accounted for approximately
Recent accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued and has evaluated all other pronouncements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on the financial position, results of operations and cash flows.
In September 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The Board is issuing the amendments in this Update to enhance the transparency and decision usefulness of income tax disclosures. Investors currently rely on the rate reconciliation table and other disclosures, including total income taxes paid, to evaluate income tax risks and opportunities. While investors find these disclosures helpful, they suggested possible enhancements to better (1) understand an entity’s exposure to potential changes in jurisdictional tax legislation and the ensuing risks and opportunities, (2) assess income tax information that affects cash flow forecasts and capital allocation decisions, and (3) identify potential opportunities to increase future cash flows. The Board decided that the amendments should be effective for public business entities for annual periods beginning after December 15, 2024.
| F-16 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In November 2024, the FASB released ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. The purpose of this update is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, selling expenses, general and administrative expenses, and research and development expenses). ASU 2024-04 is effective for all public business entities, for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Any entity qualified as public business entity shall apply ASU 2024-04 prospectively to financial statements issued for current period and all comparative periods. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its financial statements.
In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This ASU amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of Update 2024-03 is permitted. The Company is currently evaluating the impact of this ASU on its financial statements.
In July 2025, the FASB issued ASU 2025-05 - Financial Instruments—Credit Losses (Topic 326). The amendments in this Update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. An entity that elects the practical expedient and the accounting policy election, if applicable, should apply the amendments in this Update prospectively. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the impact of the adoption of this guidance. The Company believes the future adoption of this ASU is not expected to have a material impact on its financial statements.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (“Topic 815”) and Revenue from Contracts with Customers (“Topic 606”): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (“ASU 2025-07”). ASU 2025-07, expands an existing scope exception under Topic 815 to exclude non-exchange-traded contracts where the underlying is based on the operations or activities specific to one of the contract parties. The Company is currently evaluating the impact of this ASU on its financial statements.
In November 2025, the FASB issued ASU 2025-08, Financial Instruments — Credit Losses (“Topic 326”): Purchased Loans (“ASU 2025-08”). The amendments expand the population of acquired loans subject to the gross-up approach, treating non-credit-deteriorated loans (excluding credit cards) as “seasoned” if purchased at least 90 days after origination or acquired in a business combination. ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this ASU will have on its interim financial statement disclosures.
In December 2025, the FASB issued ASU 2025-11, which clarifies the scope and disclosure requirements for interim financial reporting under ASC 270. The amendments introduce a principle requiring disclosure of events and transactions occurring after the end of the most recent annual reporting period that have a material impact on the entity and consolidate certain interim disclosure requirements. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that adoption of this ASU will have on its interim financial statement disclosures.
In December 2025, the FASB issued ASU 2025-12, which is to correct, clarify, and otherwise improve U.S. GAAP. ASU 2025-12 includes 33 improvements that span a wide range of topics, including Clarifying diluted earnings per share (EPS) calculation when a loss from continuing operations exists, Clarifying disclosure requirements for lease receivables from sales-type or direct financing leases, Revising the calculation of the reference amount for beneficial interests to prevent double counting credit losses, Clarifying the permissible methods to account for treasury stock retirements, and Clarifying the guidance for transfers of receivables from contracts with customers. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this Update in an interim period, it must adopt them as of the beginning of the annual reporting period that includes that interim reporting period. An entity may elect to early adopt the amendments on an issue-by-issue basis. For example, an entity may decide to early adopt certain amendments and adopt the remaining amendments at the effective date. An entity should apply the amendments in this Update (except for the amendments to Topic 260, Earnings Per Share, related to Issue 4) using one of the following transition methods: (i) Prospectively to all transactions recognized on or after the date that the entity first applies the amendments, or (ii) Retrospectively to the beginning of the earliest comparative period presented. An entity should adjust the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest comparative period presented. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.
In April 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock, which requires paid-in-kind dividends on equity-classified preferred stock to be initially measured on the basis of the PIK dividend rate stated in the preferred stock agreement. The amendments are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company does not currently have equity-classified preferred stock outstanding and does not expect the adoption of this ASU to have a material impact on its financial statements.
In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), which establishes recognition, measurement, presentation and disclosure requirements for environmental credits and environmental credit obligations based on the intended use of the credits and how they are obtained. The amendments are effective for public business entities for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted as of the beginning of an annual reporting period. The Company is currently evaluating the applicability of this ASU to its operations and does not expect its adoption to have a material impact on its financial statements.
Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss in these notes to its financial statements recent standards that are not anticipated to have an impact on, or are unrelated to, its consolidated financial condition, results of operations, or cash flows or disclosures.
| F-17 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4. ACCOUNTS RECEIVABLE, NET
SCHEDULE OF ACCOUNTS RECEIVABLE
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accounts receivable | $ | |||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | |||||||
The movement of the allowance for credit losses was as follows:
SCHEDULE OF ALLOWANCE FOR ACCOUNTS RECEIVABLE
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Balance as of the beginning of period/year | $ | |||||||
| Additions charged to bad debt expense | - | |||||||
| Translation adjustments | ||||||||
| Balance as of the end of period/year | $ | |||||||
As
of June 30, 2026 and December 31, 2025, the Company had accounts receivable, net of $
5. ADVANCE TO SUPPLIERS, NET
SCHEDULE OF ADVANCE TO SUPPLIERS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Advances to Suppliers | $ | |||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Advances to Suppliers, net | $ | |||||||
The movement of the allowance for credit losses was as follows:
SCHEDULE OF ALLOWANCE FOR CREDIT LOSSES
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Balance as of the beginning of period/year | $ | - | ||||||
| Additions charged to credit losses | - | |||||||
| Translation adjustments | ||||||||
| Balance as of the end of period/year | $ | |||||||
As
of June 30, 2026 and December 31, 2025, the Company had advances to suppliers, net of $
6. INVENTORIES
Inventories consist of the following:
SCHEDULE OF INVENTORIES
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Finished goods | $ | $ | ||||||
| Inventories | $ | $ | ||||||
The Company recorded inventory write-downs of nil and nil for the six months ended June 30, 2026 and 2025, respectively.
7. OTHER CURRENT ASSETS
The other current assets as of June 30, 2026 and December 31, 2025 consist of the following:
SCHEDULE OF OTHER CURRENT ASSETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Staff advance | $ | |||||||
| Deposit | ||||||||
| VAT recoverable | ||||||||
| Loan to the third party | ||||||||
| Advance for investment | - | |||||||
| Others | ||||||||
| Subtotal | ||||||||
| Less: allowance for credit losses | ( | ) | ( | ) | ||||
| Total of other current assets | $ | |||||||
SCHEDULE OF ALLOWANCE FOR OTHER CURRENT ASSETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Balance as of the beginning of period/year | $ | - | ||||||
| Additions charged to bad debt expense | - | |||||||
| Translation adjustments | ||||||||
| Balance as of the end of period/year | $ | |||||||
| F-18 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
8. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consist of the following:
SCHEDULE OF PROPERTY AND EQUIPMENT
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Electronic equipment | $ | $ | - | |||||
| Subtotal | $ | $ | - | |||||
| Less: accumulated depreciation | $ | ( | ) | $ | - | |||
| Property and equipment, net | $ | $ | - | |||||
For
the six months ended June 30, 2026 and 2025, the Company purchased new property and equipment of $
9. INTANGIBLE ASSETS, NET
Intangible assets consist of the following:
SCHEDULE OF INTANGIBLE ASSETS
| 2026 | 2025 | |||||||
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Trademarks | $ | $ | ||||||
| Patents | ||||||||
| Online platform | ||||||||
| Customer Relationships | - | |||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Less: accumulated impairment | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
Amortization
expense for the six months ended June 30, 2026 and 2025 was $
10. RIGHT-OF-USE ASSETS
The
Company leases office under non-cancelable operating lease agreements, with an option to renew the leases. Per
the new lease standard ASC 842-10-55, these leases are treated as operating leases. Management determined the loan interest rate of
Rights-of-use assets, net consisted of the following:
SCHEDULE OF RIGHTS-TO-USE LEASE ASSETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Leased properties under operating lease, cost | $ | |||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Right-of-use assets, net | $ | |||||||
The
Company does not have any variable lease costs. Cash payment made under the lease agreements is $
The following table presents maturity of lease liabilities as of June 30, 2026:
SCHEDULE OF MATURITY OF LEASE LIABILITIES
| 2026 | $ | |||
| 2027 | ||||
| 2028 and After | ||||
| Total Lease Payments | $ | |||
| Less: imputed interest | $ | ( | ) | |
| Present value of lease liabilities | $ | |||
| Lease liabilities - Current | $ | |||
| Lease liabilities – Non current |
Amortization
expense was recognized as lease expense in general and administrative expense. Non-cash portion of amortization expense was $
The following table presents maturity of lease liabilities as of December 31, 2025:
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total Lease Payments | $ | |||
| Less: imputed interest | $ | ( | ) | |
| Present value of lease liabilities | $ | |||
| Lease liabilities - Current | $ | |||
| Lease liabilities – Non current |
Amortization expense was recognized as lease expense in general and administrative
expense. Non-cash portion of amortization expenses was $
| F-19 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
10. RIGHT-OF-USE ASSETS (CONTINUED)
The estimated amortization expenses for each of the five succeeding years is as follows:
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSES
| Year ending | Amortization expense | |||
| 2026 | ||||
| 2027 | ||||
| 2028 and After | ||||
| Total | $ | |||
On
January 1, 2025, Xiamen Xinbaihui Digital Technology Co., LTD (“Xiamen Xinbaihui”) entered a lease with Xiamen Chunshang to lease our executive offices to us for a lease term from January 1, 2025 to December 31, 2027, at a monthly net rent of RMB
On
July 1, 2025, Xiamen Zhongda Information Technology Co., Ltd. (“Xiamen Zhongda”) entered a lease with Xiamen Chunshang to lease the warehouse to the Company for a lease term from July 1, 2025 to February 29, 2028, at a monthly net rent of RMB
On
May 1, 2026, Guangzhou Shengxilun Technology Co., Ltd (“Guangzhou Shengxilun”) entered a lease with Xiamen Chunshang to lease the office to the Company for a lease term from May 1, 2026 to April 30, 2029, at a monthly net rent of RMB
11. ACCOUNTS PAYABLE
The accounts payable as of June 30,2026 and December 31, 2025 consist of the following:
SCHEDULE OF ACCOUNTS PAYABLE
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Accounts payable to suppliers | $ | |||||||
| Total of Accounts payable | $ | |||||||
12. EQUITY
Ordinary shares
Meiwu
Technology Company Limited is established under the laws of British Virgin Islands on December 4, 2018 with
The
Company completed IPO of
On
November 23, 2021, the Company entered into a Share Purchase Agreement (“SPA”) with Boxinrui International Holdings Limited,
a British Virgin Islands business company (the “Anxin BVI”), and all the shareholders of Anxin BVI, who collectively hold
In
March 2022, the Company adopted a share incentive plan, which is referred to as the 2022 Equity Incentive Plan (“the 2022
Plan”). The purpose of the plan is to attract and retain the best available personnel for positions of substantial responsibility,
provide additional incentive to employees, directors and consultants and promote the success of the Company’s business. Under the
2022 Plan, the maximum aggregate number of Shares that may be issued under the Plan is
On
March 31, 2022, the Company entered into a Share Purchase Agreement (“SPA”) with Magnum International Holdings Limited, a
British Virgin Islands business company (the “Yundian BVI”), and all the shareholders of Yundian BVI, who collectively hold
| F-20 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12. EQUITY (CONTINUED)
On
June 23, 2022, the Company entered into a Share Purchase Agreement (“SPA”) with Mahaotiaodong Information Technology Company
Limited, a British Virgin Islands business company (the “Mahao BVI”), and all the shareholders of Mahao BVI, who collectively
hold
On
December 12, 2022, the Company entered into a Share Purchase Agreement (“SPA”) with Xinfuxin International Holdings Limited,
a British Virgin Islands business company (the “Yuanxing BVI”), and all the shareholders of Yuanxing BVI, who collectively
hold
On
February 21, 2024 under the incentive plan registered of the Company issuance of
On
October 23, 2024, the Company sold
On
December 2, 2024, the Company closed a best-efforts offering (the “Primary Offering”) of
On
August 11, 2025 under the incentive plan registered of the Company issuance of
On
September 5, 2025, the Company sold
On
January 26, 2026, the Company entered into a certain securities purchase agreement (the “2026 Primary Offering SPA”), with
certain investors for a best-efforts offering (the “2026 Primary Offering”) of
On
March 18, 2026, the Company entered into a certain securities purchase agreement with certain investors for the purchase and sale of
an aggregate of
On
May 5, 2026, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain
purchasers (the “Purchasers”), pursuant to which the Company agreed to sell and issue an aggregate of
As
of June 30, 2026 and December 31, 2025,
Share Consolidation
On
November 27, 2023, the shareholders of the Company held an extraordinary general meeting (the “Meeting”) and approved by
an ordinary resolution of a share consolidation (the “Share Consolidation”) that every thirty-five (
On March 5, 2025, the shareholders of the Company held an extraordinary general meeting (the “Meeting”) and approved by an ordinary resolution of a share consolidation (the “Share Consolidation”) that every twenty (20) issued and unissued ordinary shares of the Company be consolidated into one (1) ordinary shares issued. As a consequence of the Share Consolidation, the par value of each issued and authorized but unissued ordinary share of the Company will remain as no par value. The Company believes it is appropriate to reflect the Share Consolidation of its Ordinary Shares on a retroactive basis pursuant to ASC 260. All shares and per share data for all the periods presented have been retroactively restated.
On March 17, 2026, the Company effectuated the 2026 Reverse Split of its Ordinary Shares on an one-for-one hundred basis. In connection with the 2026 Reverse Split, the Company’s shareholders received one new Ordinary Share of the Company for every one hundred Ordinary Shares they hold. The Company’s Ordinary Shares began trading on a 2026 Reverse Split-adjusted basis when the market opened on April 6, 2026. The Company’s authorized share capital and par value remained unchanged following the 2026 Reverse Split, as unlimited Ordinary Shares with no par value.
Additional Paid-in Capital
The
additional paid-in capital at June 30, 2026 and December 31, 2025 was $
| F-21 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
12. EQUITY (CONTINUED)
Subsequent Event — Dual-Class Share Structure
As further described in Note 17 – Subsequent Events, on September 15, 2026, the Company’s shareholders approved to re-designate and re-classify its authorized share so that the Company is authorized to issue an unlimited number of Class A ordinary shares without par value and an unlimited number of Class B ordinary shares without par value (the “Reclassification”). In connection with the effectiveness of such Reclassification, the Company’s issued and outstanding ordinary shares were re-designated as follows:
SCHEDULE OF RE-DESIGNATED ORDINARY SHARES ISSUED AND OUTSTANDING
| Shareholder | Shares held immediately prior to the Reclassification | Reclassification | Shares held immediately after the Reclassification | |||
| Changbin Xia | Class B Ordinary Shares | |||||
| Union International Company Limited |
|
Class B Ordinary Shares | ||||
| All other shareholders |
|
Class A Ordinary Shares | ||||
| Total | - |
The following table sets forth the pro forma effect of the Reclassification on the Company’s share capital as of June 30, 2026, as if the Reorganization had been effected on such date (unaudited):
SCHEDULE OF PRO FORMA EFFECT OF RECLASSIFICATION OF SHARE CAPITAL
As of June 30, 2026 | Pro Forma (Unaudited) | |||||||
| Ordinary shares | - | |||||||
| Class A Ordinary Shares | - | |||||||
| Class B Ordinary Shares | - | | ||||||
| Total shareholders’ deficit | $ | ( | ) | $ | ( | ) | ||
The pro forma information is for illustrative purposes only and does not reflect the actual share capital structure as of June 30, 2026. The Reclassification will be reflected in the Company’s consolidated financial statements beginning in the second half of 2026.
As of September 15, 2026, all Class B Ordinary Shares were held by Mr. Changbin Xia and Union International Company Limited, an entity controlled by Mr. Changbin Xia, the Chairman of the Company’s Board of Directors. Class B Ordinary Shares are entitled to 150 votes per share, while Class A Shares are entitled to one vote per share. Both classes have identical economic rights.
13. RELATED PARTY BALANCES AND TRANSACTIONS
Related parties with transactions and related party relationships
SCHEDULE OF RELATED PARTY TRANSACTIONS
| Name of Related Party | Relationship to the Company | |
| Zhichao Yang | ||
| Changbin Xia | ||
| Hanwu Yang | ||
| Eternal Horizon International Company Limited | ||
| Sen Jin |
| F-22 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14. TAXATION
Income Tax
Meiwu Technology Company Limited was incorporated in the British Virgin Islands (“BVI”) as an offshore holding company. Under the current law of the BVI, Meiwu Technology Company Limited is not subject to tax on income or capital gains. Additionally, upon payments of dividends by Meiwu Technology Company Limited to its shareholders, no BVI withholding tax will be imposed.
Meiwu Technology Company Limited’s subsidiary Shenzhen Vande Technology Co., Limited was incorporated in Hong Kong and does not conduct any substantial operations on its own. No provision for Hong Kong profits tax has been made in the financial statements as Shenzhen Vande Technology Co., Limited has no assessable profits. Additionally, upon payments of dividends by Shenzhen Vande Technology Co., Limited to its shareholders, no Hong Kong withholding tax will be imposed.
Xiamen
Chunshang Health Technology Co., Ltd, the Company’s PRC operating subsidiaries, being incorporated in the PRC, are governed by
the income tax law of the PRC and is subject to PRC enterprise income tax (“EIT”). The EIT rate of PRC is
Guangzhou
Tianhe District Chunran Health Consulting Co., Ltd., the Company’s PRC operating subsidiaries, being incorporated in the PRC, are
governed by the income tax law of the PRC and is subject to PRC enterprise income tax (“EIT”). The EIT rate of PRC is
During
the six months ended June 30, 2026 and 2025, the Company and its subsidiaries incurred a net loss approximately of $
In accordance with PRC Tax Administration Law on the Levying and Collection of Taxes, the PRC tax authorities generally have up to five years to assess underpaid tax plus penalties and interest for PRC entities’ tax filings. In the case of tax evasion, which is not clearly defined in the law, there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax authorities based on the above.
For
the six months ended June 30, 2026 and 2025, the Company was subject to a
Reconciliation between the statutory rate and the effective tax rate is as follows for the six months ended June 30, 2026 and 2025.
SCHEDULE OF RECONCILIATION OF EFFECTIVE TAX RATE
| 2026 | 2025 | |||||||
| PRC statutory tax rate | % | % | ||||||
| Foreign loss not recognized in PRC | ( | )% | ( | )% | ||||
| Permanent difference and others | ( | )% | ( | )% | ||||
| Effect of accelerated deductions on research and development expenses | ( | )% | % | |||||
| Effective tax rate | % | % | ||||||
Deferred Tax
Realization
of the net deferred tax assets is dependent on factors including future reversals of existing taxable temporary differences and adequate
future taxable income, exclusive of reversing deductible temporary differences and tax loss or credit carry forwards. The Company evaluates
the potential realization of deferred tax assets on an entity-by-entity basis. As of June 30, 2026 and December 31, 2025, valuation allowance
was provided against deferred tax assets in entities where it was determined it was more likely than not that the benefits of the deferred
tax assets will not be realized. The Company had deferred tax assets as of June 30, 2026 and December 31, 2025, which can be carried
forward to offset future taxable income. The management determines it is more likely than not that deferred tax assets could not be recognized,
so full allowances were provided as of June 30, 2026 and December 31, 2025. The operating loss generated from tax year ending December
31, 2019 carry forward incurred by the Company and subsidiary
| F-23 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
14. TAXATION (CONTINUED)
The Company’s deferred tax assets were as follows:
SCHEDULE OF DEFERRED TAX ASSETS
June 30, 2026 | December 31, 2025 | |||||||
| Tax effect of net operating losses carried forward | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets, net | $ | - | $ | - | ||||
There
were
15. SEGMENT REPORTING
ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different products or services. Based on management’s assessment, the Company has determined that it has three operating segments as defined by ASC 280, including skincare products & service and technical service.
Adjustments and eliminations of inter-company transactions were not included in determining segment (loss) profit, as they are not used by the chief operating decision maker. The following table presents summary information by segment for the six months ended June 30, 2026 and 2025, respectively:
SCHEDULE OF SEGMENT REPORTING
| Skincare Products & Service | Technical Service |
Total | ||||||||||
For the six months ended June 30, 2026 | ||||||||||||
| Skincare Products & Service | Technical Service |
Total | ||||||||||
| Revenues | $ | $ | - | $ | ||||||||
| Cost of goods sold | - | |||||||||||
| Gross profit | - | |||||||||||
| Depreciation and amortization | - | |||||||||||
| Capital expenditures | - | |||||||||||
| Loss from operations | ( | ) | - | ( | ) | |||||||
| Income tax benefits | - | - | - | |||||||||
| Segment (loss) profit | ( | ) | - | ( | ) | |||||||
| Segment assets | $ | $ | $ | |||||||||
| Skincare Products & Service | Technical Service | Total | ||||||||||
For the six months ended June 30, 2025 | ||||||||||||
| Skincare Products & Service | Technical Service | Total | ||||||||||
| Revenues | $ | $ | - | $ | ||||||||
| Cost of goods sold | - | |||||||||||
| Gross profit | - | |||||||||||
| Depreciation and amortization | - | |||||||||||
| Capital expenditures | - | |||||||||||
| Loss from operations | ( | ) | - | ( | ) | |||||||
| Income tax benefits | - | |||||||||||
| Segment (loss) profit | ( | ) | - | ( | ) | |||||||
| Segment assets | $ | $ | $ | |||||||||
| F-24 |
MEIWU TECHNOLOGY COMPANY LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
16. COMMITMENTS AND CONTINGENCIES
As of June 30, 2026, there was no pending legal proceeding to which the Company is a party that will have a material effect on the Company’s business, results of operations or cash flows.
17. SUBSEQUENT EVENTS
On
July 1, 2026, the Company entered into an Equity Transfer Agreement by and among Mahao BVI, and Mr. Li Dong, an unrelated third party
(the “Buyer”) for the sale of shares of Mahao BVI held by the Company to the Buyer (the “Equity Transfer Agreement”,
and the transaction contemplated therein, the “Disposition”). Pursuant to the Equity Transfer Agreement, the Company agreed
to sell
On September 15, 2026, the Company’s shareholders approved the implementation
of a dual-class share structure, effective immediately upon approval. Each issued ordinary share of no par value was re-designated and
re-classified on a one-for-one basis into one Class A ordinary share of no par value; the authorized but unissued ordinary shares were
cancelled and replaced by authorized share capital consisting of an unlimited number of Class A ordinary shares and an unlimited number
of Class B ordinary shares, each of no par value. Immediately thereafter, the Company repurchased
On
September 22, 2026, Xiamen Chunshang Health Technology Co., Ltd (“Xiamen Chunshang”), a wholly and indirectly owned subsidiary
of Meiwu Technology Company Limited (the “Company”), completed its previously announced acquisition of
| F-25 |
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our results of operations and financial condition should be read together with our unaudited condensed consolidated financial statements and the notes thereto and other financial information, which are included elsewhere in this prospectus. Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In addition, our financial statements and the financial information included in this prospectus reflect our organizational transactions and have been prepared as if our current corporate structure had been in place throughout the relevant periods.
This section contains forward-looking statements. These forward-looking statements are subject to various factors, risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Further, as a result of these factors, risks and uncertainties, the forward-looking events may not occur. Relevant factors, risks and uncertainties include, but are not limited to, those discussed in the section entitled “Business,” “Risk Factors” and elsewhere in this prospectus. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s beliefs and opinions as of the date of this prospectus, as amended. We are not obligated to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. See “Cautionary Note Regarding Forward-Looking Statements.”
We are a British Virgin Islands company incorporated on December 4, 2018. We do not have material operation and we conduct our business in China through our subsidiaries. We currently have two business lines, one is the functional skincare, operated by Xiamen Chunshang Health Technology Co., Ltd (“Xiamen Chunshang”) and its subsidiary; another is the training services, operated by Xiamen Chunshang and its subsidiary. For the six months ended June 30, 2026, the functional skincare business generated 100% of our total revenue For the six months ended June 30, 2025, the functional skincare business generated 94.6% of our total revenue, and the training service income generated 5.4% of our total revenue.
How to Assess the Company’s Performance
In assessing performance, we consider a variety of performance and financial measures, including principal growth in net revenue, gross profit, distribution, general and administrative expenses, net income from operations. The key measures that we use to evaluate the performance of our business are set forth below:
| (i) | Net Revenue |
Net revenue is equal to gross sales minus sales returns and sales incentives that the Company offers to its customers, such as discounts that are offset to gross sales. Our net sales are driven by changes in the number of customers, product varieties, selling price, and mix of products sold.
| (ii) | Gross Profit |
Gross profit is equal to net sales minus cost of goods sold. Cost of goods sold primarily includes inventory costs (net of supplier consideration), inbound freight and other miscellaneous expenses. Cost of goods sold generally changes as we incur higher or lower costs from suppliers and as the customer and product mix changes.
| (iii) | Selling, Marketing, General and Administrative Expenses |
Selling, marketing, general and administrative expenses primarily consist of salaries and benefits for employees, shipping expense, utilities, maintenance and repairs expenses, insurance expense, depreciation and amortization expenses, selling and marketing expenses, professional fees, and other operating expenses.
Key Factors Affecting Our Results of Operation
Our business and results of operations are affected by a number of general factors that impact our industry including, among others, economic, political and social conditions in the PRC, and the competitive environment. Unfavorable changes in any of these general factors could adversely affect demand for our products and materially and adversely affect our results of operations.
While our business is influenced by these general factors, our results of operations are more directly affected by the following company-specific factors.
Our ability to grow our brand
Our brand is integral to the growth of our business and essential to our ability to engage and stay connected with our consumer base. We believe our brand and the reputation it carries distinguish us from our competitors. Therefore, our ability to maintain and enhance our brand reputation is essential to our financial performance. Our brand value also affords us the ability to attract new consumers, and to promote our company value, commitment to quality products.
Our ability to manage our operating expenses and control costs
Our results of operations depend in part on our ability to manage our operating expenses, including fulfillment expenses, sales and marketing expenses, general and administrative expenses and research and development expenses. We expect our operating expenses to increase in absolute amounts in the foreseeable future as we keep growing our business and hire more personnel. We will continue to optimize our operating expenses. As our business scale grows, we believe we will have more operating leverage on our operating expenses.
Our ability to successfully develop and commercialize our MOBO App
In 2026, we began the develop of “MOBO”, an AI-assisted platform that combines consumer-facing skincare services, e-commerce functions, data analytics, and operational tools for business clients (“MOBO App”). The consumer facing function of this app is intended to provide comprehensive skincare solutions of evaluation, diagnosis, product recommendation, follow-up and projected results to consumers. The e-commerce function of this app is to assist brand owners, distributors, retailors, beauty salons and other B-end beauty industry clients in evaluating consumer demand, product performance and skincare trends through AI assisted data analysis and insights generated by the AI tools on the platform.
We are investing significant financial and operational resources in the development of our MOBO App. The development of the MOBO App requires substantial expenditures on technology development, personnel, infrastructure and related operational activities. We expect these expenditures to continue as we advance the development of the platform and pursue its commercialization.
Our future results of operations may be significantly affected by our ability to complete the development of the MOBO App within our anticipated timeframe and budget, successfully launch and commercialize the platform, attract and retain users, and generate revenue from its operations. As we continue to invest in the development of the MOBO App, we may experience increased operating expenses and cash outflows before the platform begins generating meaningful revenue, if any. Any delays in development, higher-than-anticipated costs or difficulties in commercialization could adversely affect our financial performance and results of operations.
Operating Results
For The Six Months Ended June 30, 2026, and 2025
The following table summarizes the results of our operations for the six months ended June 30, 2026 and 2025, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
| For The Six Months ended | For The Six Months ended | |||||||||||||||||||||||
| June 30, | June 30, | Variance | ||||||||||||||||||||||
| 2026 | % of revenue | 2025 | % of revenue | Amount | % | |||||||||||||||||||
| NET REVENUES | ||||||||||||||||||||||||
| Net Product Revenue | $ | 4,867,853 | 100 | % | $ | 2,344,583 | 94.6 | % | $ | 2,523,270 | 108 | % | ||||||||||||
| Net Service Revenue | - | 0 | % | 133,269 | 5.4 | % | (133,269 | ) | (100 | )% | ||||||||||||||
| Total Net Revenues | 4,867,853 | 100 | % | 2,477,852 | 100 | % | 2,390,001 | 96 | % | |||||||||||||||
| COST OF REVENUES | 4,238,942 | 87 | % | 2,160,129 | 87 | % | 2,078,813 | 96 | % | |||||||||||||||
| GROSS PROFIT | 628,911 | 13 | % | 317,723 | 13 | % | 311,188 | 98 | % | |||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||||||
| Sales and Marketing Expenses | 11,737,249 | 241 | % | 802,380 | 32 | % | 10,934,869 | 1363 | % | |||||||||||||||
| General and Administrative Expenses | 1,239,871 | 25 | % | 890,685 | 36 | % | 349,186 | 39 | % | |||||||||||||||
| Research and Development Expenses | 3,509,400 | 72 | % | - | - | % | 3,509,400 | n/a | % | |||||||||||||||
| Total Operating Expenses | 16,486,520 | 339 | % | 1,693,065 | 68 | % | 14,793,455 | 874 | % | |||||||||||||||
| LOSS FROM OPERATIONS | (15,857,609 | ) | (326 | )% | (1,375,342 | ) | (56 | )% | (14,482,267 | ) | (1053 | )% | ||||||||||||
| Assets impairment loss | - | 0 | % | (2,240 | ) | (0.1 | )% | 2,240 | (100 | )% | ||||||||||||||
| Loss on disposal of subsidiary | - | 0 | % | (8,241 | ) | (0.3 | )% | 8,241 | (100 | )% | ||||||||||||||
| Other income (expense), net | 10,196 | 0.2 | % | 24,306 | 1 | % | (14,110 | ) | (58 | )% | ||||||||||||||
| LOSS BEFORE INCOME TAX | (15,847,413 | ) | (326 | )% | (1,361,517 | ) | (55 | )% | (14,485,896 | ) | (1064 | )% | ||||||||||||
| Income tax benefits (expenses) | - | 0 | % | 499 | 0 | % | (499 | ) | (100 | )% | ||||||||||||||
| NET LOSS | (15,847,413 | ) | (326 | )% | (1,361,018 | ) | (55 | )% | (14,486,395 | ) | (1064 | )% | ||||||||||||
| Less: net loss attributable to non-controlling interest | - | - | % | - | - | % | - | - | % | |||||||||||||||
| NET LOSS ATTRIBUTABLE TO THE OWNERS’ COMPANY | (15,847,413 | ) | (326 | )% | (1,361,018 | ) | (55 | )% | (14,486,395 | ) | (1064 | )% | ||||||||||||
| OTHER COMPREHENSIVE LOSS | ||||||||||||||||||||||||
| Foreign Currency Translation Adjustment | (1,219,310 | ) | (25 | )% | 407,539 | 16 | % | (1,626,848 | ) | (399 | )% | |||||||||||||
| COMPREHENSIVE LOSS | $ | (17,066,723 | ) | (351 | )% | $ | (953,479 | ) | (38 | )% | $ | (16,113,243 | ) | (1690 | )% | |||||||||
Net Revenue
Net revenue is equal to gross sales minus sales returns and sales incentives that we offer to our customers, such as discounts that are offsets to gross sales and certain other adjustments. Our net revenue consists of product revenue and training service revenue. Product revenue was derived mainly from sales of our products to customers in China via our website.
Net revenue increased by US$2.39 million from US$2.48 million in the first half of 2025 to US$4.87 million in the first half of 2026, an increase of 96%, which was mainly due to the sales of functional skincare products by Xiamen Chunshang.
The following table sets forth the breakdown of our net revenue for the six months ended June 30, 2026 and 2025.
For the six months ended June 30, 2026
| Net | % of Total | Sales | Average | |||||||||||||
| Product and Service category | revenue | revenue | quantities | selling price | ||||||||||||
| Functional skincare products | $ | 4,867,853 | 100 | % | 2,658,976 | $ | 1.83 | |||||||||
| Training services | $ | - | - | % | n/a | $ | n/a | |||||||||
| Total | $ | 4,867,853 | 100 | % | 2,658,976 | 1.83 | ||||||||||
For the six months ended June 30, 2025
| Net | % of Total | Sales | Average | |||||||||||||
| Product and Service category | revenue | revenue | quantities | selling price | ||||||||||||
| Functional skincare products | $ | 2,344,583 | 94.6 | % | 2,102,547 | $ | 1.12 | |||||||||
| Training services | $ | 133,269 | 5.4 | % | n/a | $ | n/a | |||||||||
| Total | $ | 2,477,852 | 100 | % | 9,062 | |||||||||||
Consistent with our strategic shift to focus on the functional skincare business, sales of functional skincare products accounted for 100% of our total revenue in the first half of 2026.
Cost of Revenue and Gross Profit
Cost of revenue and gross profit increased in the six months ended June 30, 2026. Cost of revenue, including tax surcharges, was $4.24 million for the six months ended June 30, 2026, an increase of $2.08 million, or 96%, from $2.16 million for the six months ended June 30, 2025. The cost increases were in line with the increase of revenue. Gross profit was $0.63 million for the six months ended June 30, 2026, an increase of $0.31 million, or 98%, from $0.32 million for the six months ended June 30, 2025.
Sales and Marketing Expenses
Sales and marketing expenses were $11.74 million for the six months ended June 30, 2026, representing an increase of $10.93 million, or 1,363%, from $0.80 million for the six months ended June 30, 2025. The main reason for the increase is the increased promotion and sales personnel expenses related to the Company’s sales of functional skincare products in the first half of 2026.
General and Administrative Expenses
General and administrative expenses were $1.24 million for the six months ended June 30, 2026, representing an increase of $0.35 million, or 39%, from $0.89 million for the six months ended June 30, 2025. The increase were primarily attributable to the higher personnel costs associated with the Company’s product and operations departments and the amortization of newly acquired intangible assets by the Company has increased.
Research and Development Expenses
Research and development expense was $3.51 million for the six months ended June 30, 2026. The Company did not incur research and development expenses in the six months ended June 30, 2025. The increase was because the Company began to develop MOBO App, which resulted in a significant increase in the cost of research and development personnel.
Other Income, net
Other income, net consists primarily of non-operating income and interest income or expenses. Other income was $10,196 for the six months ended June 30, 2026, and was $24,306 for the six months ended June 30, 2025.
Income tax benefits (expenses)
Our income tax benefits were $0 for the six months ended June 30, 2026 and the income tax expenses was $499 for the six months ended June 30, 2025. The decrease is primarily due to the Company’s tax refund amount for the six months ended June 30, 2026 has been reduced.
Other comprehensive income
Foreign currency translation adjustments amounted to $1,219,309 and $407,538 for the six months ended June 30, 2026 and 2025, respectively. The balance sheet amounts, with the exception of equity, on June 30, 2026 were translated at 1.00 RMB to $0.1474 as compared to 1.00 RMB to $0.1430 on December 31, 2025. The equity accounts were stated at their historical rate. The average translation rates applied to the income statements accounts for the six months ended June 30, 2026 and 2025 were 1.00 RMB to $0.1457 and 1.00 RMB to $0.1379, respectively. The change in the value of the RMB relative to the U.S. dollar may affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operation.
Liquidity and Capital Resources
We had cash of $54,009,557 and $17,884,684 as of June 30, 2026 and December 31, 2025, respectively. Net loss was $15.8 million and $1.4 million for the six months ended June 30, 2026 and 2025, respectively. The Company had working capital of $59.75 million and $19.49 million as of June 30, 2026 and December 31, 2025, respectively. We have funded working capital and other capital requirements primarily by the offerings and equity contributions from investors. Cash is required to pay purchase costs for inventory, salaries, selling expenses, rental expenses, income taxes, and other operating expenses.
In assessing our liquidity, management monitors and analyses our cash on hand, ability to generate sufficient revenue sources in the future, and operating and capital expenditure commitments. Our major shareholders have been providing and will continue to provide their personal funds, if necessary, to support us on an as-needed basis. For the six months ended June 30, 2026, major shareholders have contributed approximately $0 to us.
Cash flows for the six months ended June 30, 2026 and 2025
The following table sets forth cash flow data for the six months ended June 30, 2026 and 2025:
For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash (used in) provided by operating activities | $ | (17,192,328 | ) | $ | 6,727,940 | |||
| Net cash used in investing activities | (4,296,720 | ) | (15,899,767 | ) | ||||
| Net cash provided by (used in) financing activities | 58,833,231 | (1,291,608 | ) | |||||
| Effect of changes of foreign exchange rate on cash | (1,219,310 | ) | 407,539 | |||||
| Net increase (decrease) in cash, cash equivalents | $ | 36,124,873 | $ | (10,055,896 | ) | |||
Operating Activities
Net cash used in operating activities was approximately $17.2 million for the six months ended June 30, 2026. Net cash used in operating activities for the six months ended June 30, 2026 mainly consisted of net loss of $15.8 million, depreciation and amortization of $2.8 million, an increase of $0.2 million in accounts receivable, an increase of $5.8 million in other current assets, a decrease of $1.2 million in advances to suppliers, a decrease of $4,326 in accounts payable and an increase of $0.6 million in accrued expenses and other current liabilities.
Net cash used in operating activities was approximately $6.7 million for the six months ended June 30, 2025. Net cash used in operating activities for the six months ended June 30, 2025 mainly consisted of net loss of $1.4 million, adjustments of $0.6 million non-cash items, an increase of $0.7 million in accounts receivable, a decrease of $0.3 million in other current assets, a decrease of $6.9 million in advances to suppliers, a decrease of $0.7 million in accounts payable and an increase of $0.6 million in accrued expenses and other current liabilities.
Investing Activities
Net cash used in investing activities was $4.3 million for the six months ended June 30, 2026, which was mainly investment in purchasing of intangible assets of $3.9 million and purchasing of property and equipment of $0.4 million.
Net cash used in investing activities was $15.9 million for the six months ended June 30, 2025, which was mainly investment in purchasing of intangible assets of $15.9 million.
Financing Activities
Net cash provided by financing activities was $58.8 million for the six months ended June 30, 2026, which consisted of (ii) the sale of ordinary shares for approximately $30,224,051 in January 2026 in a best-efforts offering, (ii) the sale of ordinary shares and warrants to purchase ordinary shares for approximately $12,651,732.60 in March 2026 in a registered direct offering, and (iii) the sale of ordinary shares for approximately $15,653,718 in May 2026 in a private placement transaction.
Net cash used in financing activities was $1.3 million for the six months ended June 30, 2025, which consisted of repayment of related party loans of $1.3 million.
Capital Expenditures
We had capital expenditures of $4,296,720 and $15,899,767 for the six months ended June 30, 2026 and 2025, respectively.
Contractual Obligations and Commitments
We have certain potential commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments.
The following table presents the Company’s material contractual obligations as of:
| Total | Less than 1 year | 1 – 2 years | 3 – 5 years | More than 5 years | ||||||||||||||||
| Lease liabilities | $ | 52,497 | $ | 25,140 | $ | 21,554 | $ | 5,803 | - | |||||||||||
Trend Information.
Other than as disclosed elsewhere in this 6-K, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
Critical Accounting Estimates.
We prepare our financial statements in conformity with accounting principles generally accepted by the United States of America (“U.S. GAAP”), which requires us to make judgments, estimates and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made to the accounting estimates and assumptions in the past two years, we continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.
We believe that the following accounting policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting estimates. Accordingly, these are the policies we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations.
Consolidation of former variable interest entity
A VIE is an entity that either has a total equity investment that is insufficient to finance its activities without additional subordinated financial support, or whose equity investments lack the characteristics of a controlling financial interest, such as through voting rights, and the right to receive the expected residual returns of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary of, and must consolidate, the VIE.
Guo Gang Tong is deemed to have a controlling financial interest in and be the primary beneficiary of Meiwu Shenzhen because it has both of the following characteristics:
| (1) | The power to direct activities at Meiwu Shenzhen that most significantly impact such entity’s economic performance, and | |
| (2) | The right to receive benefits from Meiwu Shenzhen that could potentially be significant to such entity. |
Pursuant to the contractual arrangements with Meiwu Shenzhen, Meiwu Shenzhen pays service fees equal to all of its net profit after tax payments to Guo Gang Tong. Such contractual arrangements are designed so that Meiwu Shenzhen operates for the benefit of Guo Gang Tong and ultimately, the Company.
Accordingly, the accounts of the Meiwu Shenzhen are consolidated in our financial statements pursuant to ASC 810-10, Consolidation. In addition, their financial positions and results of operations are included in our financial statements.
On December 10, 2024, Guogangtong Trading (Shenzhen) Co., Ltd. (“WFOE”), the wholly owned subsidiary of Vande entered into an agreement (the “Termination Agreement”) with Meiwu Zhishi Technology (Shenzhen) Co., Ltd. (“Meiwu Zhishi” or “former VIE”), former VIE’s shareholders to terminate of a series of contractual arrangements (“former VIE Agreements”) by and among the former VIE, the WFOE, and shareholders of the former VIE.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Company bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used to account for contingencies, allowance for credit loss of account receivable, impairment of long-lived assets and useful lives of property and equipment and intangible assets. Actual results could differ from those estimates.
Revenue recognition
ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. This new guidance provides a five-step analysis in determining when and how revenue is recognized. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the new guidance requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.
The Company currently generates its revenue from the following main sources:
Sales offline
In the second half of 2024 and the year ended December 31, 2025, the Company started offline sales which mainly focused on the non-retail customers. For the offline sales, the customers’ order goods from the Company according to their own needs, then the Company will order the corresponding products from the suppliers. The Company’s offline sales have the following categories: functional skincare products and health products. The Company was a principal because it controlled the promised good or service before transferring it to a customer. Once purchase orders are received from customers, the Company purchases desired products from suppliers, takes control of purchased products in its warehouses, and then organizes the shipping and delivery of products to customers. New customers are typically required to make certain prepayment to the Company before the Company purchases products from suppliers.
The Company accounts for revenue from sales of functional skincare products and health products on a gross basis. It is responsible for fulfilling the promise to provide the desired functional skincare products and health products to customers, is subject to inventory risk prior to transfer control, and has the discretion in establishing prices.
The Company’s revenue is recognized in accordance with Accounting Standards Codification Topic 606, Revenue from Contract with Customers (“ASC 606”). ASC 606 requires the use of a five-step model, which requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when the Company satisfies the performance obligation
The Company’s contracts with customers are fixed price contracts and have one single performance obligation, which is the promise to transfer the specified goods. The entire transaction price is allocated to this obligation. Revenue is recognized at a point in time when control of the goods is transferred to the customer, which is determined to occur upon the customer’s acceptance of the goods at delivery, as evidenced by signed proof of delivery.
Revenues are recorded net of return allowances and sales incentives. For sales through offline channels, the Company’s sales terms do not provide a right of return beyond a standard quality policy. The Company bases its estimates of sales return on historical results. For the year ended June 30, 2026, the amount of sales return was insignificant. The Company may provide sales incentives in the form of discounts to customers, which can be determined before the customer placed the order. Revenue, recognized on a net basis after such sales incentives, is allocated based on the relative standalone selling prices for respective products.
Payment terms for distributing customers are generally set 30 days after the consideration becomes due and payable.
Advance payments from customers are recorded as contract liabilities and are recognized as revenue when the products are delivered and the performance obligation is satisfied. The Company does not routinely allow product returns, and historically, returns have been immaterial. There are no separate rebates, discounts, or volume incentives offered.
Training service revenue
The Company generates revenue from providing short-term training services to customers. For training services, revenue is recognized at a point in time when services are successfully provided (e.g., upon successful complete of a training) which is indicated by the customer’s acknowledgement of completion of such service, as the customer does not simultaneously receive and consume the benefits provided by the Company’s performance throughout the service period and the Company’s performance does not create an asset with an alternative use to the customer. The Company’s contracts with customers are fixed-price contracts and contain a single performance obligation, the promise to provide specified training services. The entire transaction price is allocated to this obligation. The Company is the primary obligor in providing the training services, bears the delivery risk, and has discretion in establishing the price for the services. Therefore, the Company is identified as a principal and recognizes revenue on a gross basis. Training services are generally short term, which usually take one month.
Inventory, net
Inventories consist of finished goods and are stated at the lower of cost or net realizable value. The cost of inventories is calculated using the weighted average basis. The Company reviews its inventories periodically to determine if any reserves are necessary for potential obsolescence or if the carrying value exceeds net realizable value. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products.
Income taxes
The Company is subject to the income tax laws of the PRC. No taxable income was generated outside the PRC for the six months ended June 30, 2026 and 2025 The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or future deductibility is uncertain.
ASC 740-10-25 “Accounting for Uncertainty in Income Taxes,” prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There were no material uncertain tax positions as of June 30, 2026 and December 31, 2025. All tax returns since the Company’s inception are subject to examination by tax authorities.