ZHONGCHAO INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollar, except for the number of shares)
|
June 30, 2024 |
December 31, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 6,279,809 | $ | 7,548,694 | ||||
| Short-term investments | 5,941,249 | 5,897,809 | ||||||
| Accounts receivable | 2,762,302 | 2,552,738 | ||||||
| Inventories | 300,639 | 592,382 | ||||||
| Prepayments | 1,031,852 | 1,386,307 | ||||||
| Loans receivable |
-
| 281,694 | ||||||
| Other current assets | 390,366 | 451,422 | ||||||
| Total Current Assets | 16,706,217 | 18,711,046 | ||||||
| Investment in equity method investees | 1,119,006 | 1,145,404 | ||||||
| Investment in an equity security |
-
| 165,871 | ||||||
| Property and equipment, net | 5,073,142 | 3,222,252 | ||||||
| Intangible assets, net | 14,683 | 17,539 | ||||||
| Right of use assets | 702,640 | 796,653 | ||||||
| Deferred tax assets | 417,478 | 357,878 | ||||||
| Total Assets | $ | 24,033,166 | $ | 24,416,643 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 1,225,720 | $ | 683,937 | ||||
| Advances from customers | 508,877 | 838,838 | ||||||
| Income tax payable | 5,355 | 6,734 | ||||||
| Operating lease liabilities, current portion | 215,544 | 236,294 | ||||||
| Accrued expenses and other liabilities | 807,982 | 912,558 | ||||||
| Total Current Liabilities | 2,763,478 | 2,678,361 | ||||||
| Operating lease liabilities, noncurrent portion | 518,803 | 571,862 | ||||||
| Deferred tax liabilities | 31,269 | 128,250 | ||||||
| Total Liabilities | 3,313,550 | 3,378,473 | ||||||
| Commitments and Contingencies | ||||||||
| Equity | ||||||||
| Class A Ordinary Share (par value $0.001 per share, 450,000,000 shares authorized; 2,106,131 and 2,054,943 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively) | 2,107 | 2,056 | ||||||
| Class B Ordinary Share (par value $0.001 per share, 50,000,000 shares authorized; 549,771 and 549,771 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively) | 550 | 550 | ||||||
| Additional paid-in capital | 25,160,161 | 25,133,933 | ||||||
| Statutory reserve | 1,308,550 | 1,371,168 | ||||||
| Accumulated deficit | (7,115,360 | ) | (7,268,025 | ) | ||||
| Accumulated other comprehensive loss | (1,689,922 | ) | (1,232,901 | ) | ||||
| Total Zhongchao Inc. Shareholders' Equity | 17,666,086 | 18,006,781 | ||||||
| Non-controlling interests | 3,053,530 | 3,031,389 | ||||||
| Total Equity | 20,719,616 | 21,038,170 | ||||||
| Total Liabilities and Equity | $ | 24,033,166 | $ | 24,416,643 |
ZHONGCHAO INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in U.S. dollar, except for the number of shares)
|
For the Six Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Revenues | ||||||||
| Service | $ | 6,595,083 | $ | 4,856,333 | ||||
| Product | 1,753,246 | 5,519,837 | ||||||
| Total revenues | 8,348,329 | 10,376,170 | ||||||
| Cost of revenues | ||||||||
| Service | (2,539,777 | ) | (2,710,770 | ) | ||||
| Product | (1,071,456 | ) | (3,342,061 | ) | ||||
| Total cost of revenues | (3,611,233 | ) | (6,052,831 | ) | ||||
| Gross Profit | 4,737,096 | 4,323,339 | ||||||
| Operating Expenses | ||||||||
| Selling and marketing expenses | (2,009,753 | ) | (3,945,328 | ) | ||||
| General and administrative expenses | (2,643,824 | ) | (4,639,182 | ) | ||||
| Research and development expenses | (135,069 | ) | (298,987 | ) | ||||
| Impairment of property and equipment |
-
| (1,464,413 | ) | |||||
| Total Operating Expenses | (4,788,646 | ) | (10,347,910 | ) | ||||
| Loss from Operations | (51,550 | ) | (6,024,571 | ) | ||||
| Interest income, net | 101,106 | 57,430 | ||||||
| Other income, net | 27,133 | 784,979 | ||||||
| Income (Loss) Before Income Taxes | 76,689 | (5,182,162 | ) | |||||
| Income tax benefits | 106,244 | 402,304 | ||||||
| Net Income (Loss) | 182,933 | (4,779,858 | ) | |||||
| Net (income) loss attributable to noncontrolling interests | (92,886 | ) | 58,268 | |||||
| Net Income (Loss) Attributable to Zhongchao Inc.'s shareholders | 90,047 | (4,721,590 | ) | |||||
| Other Comprehensive (Loss) Income | ||||||||
| Foreign currency translation adjustment | (527,766 | ) | (1,129,443 | ) | ||||
| Comprehensive Loss | (344,833 | ) | (5,909,301 | ) | ||||
| Total comprehensive (income) loss attributable to noncontrolling interests | (22,141 | ) | 206,616 | |||||
| Total Comprehensive Loss Attributable to Zhongchao Inc.'s Shareholders | $ | (366,974 | ) | $ | (5,702,685 | ) | ||
| Weighted Average Number of Ordinary Share Outstanding* | ||||||||
| Basic and Diluted | 2,637,340 | 2,602,915 | ||||||
| (Loss) Earnings per Share | ||||||||
| Basic and Diluted | $ | 0.03 | $ | (1.81 | ) |
| *: | Retrospectively restated for the effect of share consolidation |
2
ZHONGCHAO INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in U.S. dollar, except for the number of shares)
For the six months ended June 30, 2024
| Ordinary Shares | Additional |
Accumulated Other | ||||||||||||||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Statutory | Accumulated | Comprehensive | Non-controlling | Total | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Reserve | Deficit | Loss | Interest | Equity | |||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | 2,054,943 | $ | 2,056 | 549,772 | $ | 550 | $ | 25,133,933 | $ | 1,371,168 | $ | (7,268,025 | ) | $ | (1,232,901 | ) | $ | 3,031,389 | $ | 21,038,170 | ||||||||||||||||||||
| Share-based compensation expenses | - | - | - | - | 26,279 | - | - | - | - | 26,279 | ||||||||||||||||||||||||||||||
| Issuance of fraction shares for share consolidation | 51,188 | 51 | - | - | (51 | ) | - | - | - | - | - | |||||||||||||||||||||||||||||
| Release of statutory reserve from dissolved entity | - | - | - | - | - | (62,618 | ) | 62,618 | - | - | - | |||||||||||||||||||||||||||||
| Net income | - | - | - | - | - | - | 90,047 | - | 92,886 | 182,933 | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | - | - | (457,021 | ) | (70,745 | ) | (527,766 | ) | |||||||||||||||||||||||||||
| Balance as of June 30, 2024 | 2,106,131 | $ | 2,107 | 549,772 | $ | 550 | $ | 25,160,161 | $ | 1,308,550 | $ | (7,115,360 | ) | $ | (1,689,922 | ) | $ | 3,053,530 | $ | 20,719,616 |
For the six months ended June 30, 2023
| Ordinary Shares* | Additional |
(Accumulated Deficit) |
Accumulated Other | |||||||||||||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Statutory | Retained | Comprehensive | Non-controlling | Total | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Reserve | Earnings | Loss | Interest | Equity | |||||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | 2,053,143 | $ | 2,054 | 549,772 | $ | 550 | $ | 24,998,388 | $ | 1,315,017 | $ | 4,124,037 | $ | (511,824 | ) | $ | 3,091,043 | $ | 33,019,265 | |||||||||||||||||||||
| Share-based compensation expenses | - | - | - | - | 62,409 | - | - | - | - | 62,409 | ||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | (4,721,590 | ) | - | (58,268 | ) | (4,779,858 | ) | |||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | - | - | - | (981,095 | ) | (148,348 | ) | (1,129,443 | ) | |||||||||||||||||||||||||||
| Balance as of June 30, 2023 | 2,053,143 | $ | 2,054 | 549,772 | $ | 550 | $ | 25,060,797 | $ | 1,315,017 | $ | (597,553 | ) | $ | (1,492,919 | ) | $ | 2,884,427 | $ | 27,172,373 |
| *: | Retrospectively restated for the effect of share consolidation |
3
ZHONGCHAO INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2024 and 2023
(Expressed in U.S. dollar, except for the number of shares)
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ | 182,933 | $ | (4,779,858 | ) | |||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Depreciation and amortization expenses | 94,574 | 276,391 | ||||||
| Writing off accounts receivable | 119,986 | 1,286,280 | ||||||
| Reversal of provision of doubtful accounts | (2,166 | ) | (72,605 | ) | ||||
| Loss from disposal of property and equipment |
-
| 1,466,469 | ||||||
| Amortization of right of use assets | 132,718 | 259,883 | ||||||
| Recognition of share-based compensation expenses | 26,279 | 62,409 | ||||||
| Deferred tax benefits | (164,715 | ) | (378,162 | ) | ||||
| Equity investment gain | (29,308 | ) | (74 | ) | ||||
| Changes in fair value of short-term investments | 131,817 | (592,141 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (388,736 | ) | 2,007,275 | |||||
| Prepayments | 325,496 | (151,410 | ) | |||||
| Prepayments - related party |
-
| 114,372 | ||||||
| Inventories | 280,675 | (349,138 | ) | |||||
| Other current assets | 54,974 | (613,086 | ) | |||||
| Accounts payable | 557,113 | (133,425 | ) | |||||
| Advances from customers | (313,513 | ) | 9,440 | |||||
| Income tax payable | (2,109 | ) | (78,043 | ) | ||||
| Accrued expenses and other liabilities | (84,362 | ) | 35,179 | |||||
| Lease liabilities | (112,058 | ) | (222,909 | ) | ||||
| Net Cash Provided by (Used in) Operating Activities | 809,598 | (1,853,153 | ) | |||||
| Cash Flows from Investing Activities: | ||||||||
| Purchases of property and equipment | (2,095,339 | ) | (12,269 | ) | ||||
| Loans to third parties |
-
| (288,671 | ) | |||||
| Repayment of loans from third parties | 277,762 | 1,840,000 | ||||||
| Due from affiliates |
-
| 225,163 | ||||||
| Proceeds from redemption of equity investment | 195,169 |
-
| ||||||
| Investments in short-term investments | (5,416,933 | ) | (522,920 | ) | ||||
| Proceeds from redemption of short-term investments | 5,241,677 | 697,379 | ||||||
| Net Cash (Used in) Provided by Investing Activities | (1,797,664 | ) | 1,938,682 | |||||
| Cash Flows from Financing Activities: | ||||||||
| Net Cash Provided by Financing Activities |
-
|
-
| ||||||
| Effect of exchange rate changes on cash and cash equivalents | (280,819 | ) | (319,161 | ) | ||||
| Net decrease in cash and cash equivalents | (1,268,885 | ) | (233,632 | ) | ||||
| Cash and cash equivalents at beginning of period | 7,548,694 | 11,520,453 | ||||||
| Cash and cash equivalents at end of period | $ | 6,279,809 | $ | 11,286,821 | ||||
| Supplemental Cash Flow Information | ||||||||
| Cash paid for income tax | $ | 67,043 | $ | 78,043 | ||||
| Noncash investing activities | ||||||||
| Right of use assets obtained in exchange for operating lease obligations | $ | 56,367 | $ | 16,436 | ||||
| Addition of property and equipment from deposit and prepayment for properties | $ |
-
| $ | 238,406 | ||||
| Net off deferred tax assets with income tax payable | $ |
-
| $ | 2,067,833 |
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