What changed in this filing

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Item 9A. Controls and Procedures

2026-04-13 compared with 2025-09-11 · 675 added, 756 removed, 1301 unchanged (52% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management, with the participation

of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our

disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of December 31, 2024, pursuant to Exchange

Act Rule 13a-15(b).

We concluded that our disclosure controls and procedures were not effective as of such date to ensure that information

required to be disclosed by us in reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and

reported within the time periods specified in the SEC’s rules and forms and that our disclosure controls are not effectively designed

to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated

and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar

functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our principal executive officer

and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures

(as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of December 31, 2025, pursuant to Exchange Act Rule 13a-15(b).

that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed by

us in reports filed or submitted under the Securities Exchange Act were recorded, processed, summarized, and reported within the time

periods specified in the SEC’s rules and forms and that our disclosure controls are not effectively designed to ensure that information

required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated

to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as

appropriate to allow timely decisions regarding required disclosure.

Management Report on Internal Control over

20 unchanged sentences

Company’s internal control over financial reporting was due to the following material weaknesses:

Lack of competent financial reporting and accounting personnel with appropriate understanding of U.S.

GAAP and financial reporting requirements to design and implement key controls over financial reporting process;

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

(i) the lack of sufficient competent financial reporting and accounting personnel with appropriate understanding of U.S.

GAAP and financial reporting requirements to design and implement key controls over financial reporting process to address complex U.S.

GAAP accounting issues and related disclosures, in accordance with U.S.

GAAP and SEC financial reporting requirements;

limited functional internal audit department or personnel that monitors the consistencies of the preventive internal control procedures as well as insufficient policies and procedures in internal audit function to ensure that our policies and procedures have been carried out as planned

believes that the material weaknesses that were identified did not have an effect on our financial results.

19 unchanged sentences

The remediation actions planned include:

Identify gaps in the Company’s skills base and the expertise of its staff required to meet the financial reporting requirements of a public company;

Continue to cooperate with operation teams

to ensure a control environment in place, and monitor the effectiveness of operations on existing controls and procedures.

Establish procedures to assess compliance requirements under the Sarbanes-Oxley Act of 2002 (the “ Sarbanes-Oxley Act ”) and improve overall internal control.

hiring more qualified accounting personnel with relevant U.S.

GAAP and SEC reporting experience and qualifications to strengthen our financial reporting function and to set up a financial and system control framework;

appointing Ms.

Xing Tang, who has extensive experience in financial reporting and internal controls, including familiarity with Nasdaq financial reporting and compliance requirements, as its Chief Financial Officer in July 2024, and who served as Chief Financial Officer of Elong Power Holdings Ltd.

ELPW) from August 2013 to June 2024.

strengthening accounting record system with access control and financial reporting procedures, including organizing regular training for our accounting staff, especially training related to U.S.

GAAP and SEC reporting requirements;

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

Establish procedures to assess compliance requirements under the Sarbanes-Oxley

Act of 2002 (the “ Sarbanes-Oxley Act ”) and improve overall internal control.

We are committed to maintaining

29 unchanged sentences

Jiaxing Huang

* Jing Chen served from November 12, 2021 untill April 29,

** Jing Guo served from May 1, 2025

* Jing Guo has served as a director since May 1, 2025.

** Yunna Liu has served as a director

and a member of the Auditor Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee since November

Guangrong Cai - Chairman and Director

43 unchanged sentences

She has extensive experience in financial reporting in US GAAP and internal controls.

Jing Chen - Director

Chen has served as our

director since November 12, 2021.

Since November 2024, Ms.

Chen has served as the Chief Financial Officer of Shanxi Yansen New Energy

Chen also has served as an independent director and the chairperson of the audit committee of Erayak Power Solution Group

RAYA) since November 2021, and Bon Natural Lift Limited (Nasdaq:

BON) since October 2023.

Chen served as an independent

director and the chairperson of the audit committee of Jin Medical International Ltd.

ZJYL) from August 2021 to December 2023.

She also served as the Vice President of Future Fintech Group Inc.

FTFT), a FinTech company, where she was responsible for the

company’s internal control and merger and acquisition from December 2020 to April 2023.

From May 2019 to November 2020, Ms.

served as the CFO of Future Fintech Group Inc.

She served as the CFO of AnZhiXinCheng (Beijing) Technology Co., Ltd.

from August 2018

Chen also served as an independent director of Hello iPayNow (Beijing) Company Ltd.

from April 2019 to March 2021.

August 2017 to July 2018, she served as CFO of Beijing Logis Technology Development Co., Ltd., a company listed on The National Equities

Exchange and Quotations Co., Ltd.

of China, which is a Chinese over-the-counter stock trading system.

From June 2016 to July 2017, Ms.

Chen served as Group Chief Financial Officer of Beijing AnWuYou Food Co., Ltd.

Chen also served as Chief Financial Officer of Beijing

DKI Investment Management Co., Ltd.

from August 2012 to May 2016.

Chen received a Doctorate of Business Administration from Victoria

University, Neuchatel, Switzerland and an MBA degree from City University of Seattle in Washington, U.S.

Chen holds Fellow Membership

of CPA Australia (FCPA) and is a Member of the Chartered Institute of Management Accountants (CIMA).

She is also a Senior Member of the

International Financial Management (SIFM) accredited by the Ministry of Human Resources and Social Security of the PRC.

We believe Ms.

Chen is qualified to serve as our director due to her extensive knowledge and background in accounting and management.

On April 29, 2025, Ms.

resigned as a Board director and no longer served as a member of the Audit Committee, the Compensation Committee, and the Nominating and

Corporate Governance Committee of the Board, including as the Chairperson of the Audit Committee.

Jian Feng - Director

Jian Feng, has served as technician, supervisor, manager and general

officer at Haite Co.

Ltd.’s Shanghai Office from July 2017 to December 2024.

Feng has since served as the supervisor and vice

general manager at Jirui Technology Co.

Ltd., a manufacturer of touchscreens.

Feng received a bachelor’s degree in Electronic

Information from University of Electronic Science and Technology of China in 2017 and an EMBA degree from Sichuan University in 2019.

The Board believes Mr.

Feng’s extensive managerial experience and technical expertise will make him a valuable addition to the board.

Jiaxing Huang -

Jiaxing Huang has served as our director since June 2024.

Huang has served as an administrative

personnel specialist and manager of Chengdu Tianfu Investment Co., Ltd since July 2021.

Since November 2022, he has also served as an

independent director of Shenzhen Fushiyuan Intelligent Fire Protection Co., Ltd, responsible for supervising the formulation and implementation

of personnel recruitment, assessment, reward and other systems in the company.

Huang received a bachelor’s degree in administration

management from University of Electronic Science and Technology of China in 2021.

We believe Mr.

Huang is qualified to serve as our director

due to his knowledge and background in the management field.

Guijun Gan - Director

Gan has served as our director since June 2024, Mr.

Gan has also served as a director of Chengdu Qili Water Treatment Technology Co.

From July 1998 to October 2018, he served as the Chief Financial Officer of Zhongtu Chemical (Guangdong) Co., Ltd., a wholly-owned

company of China Coatings Co., Ltd., a Japanese listed company.

Gan received a master’s degree in Statistics from Sun Yat-sen

University in 1992 and a bachelor’s degree in Statistics from Sun Yat-sen University in 1989.

Huang has served as an administrative personnel specialist and manager of

Chengdu Tianfu Investment Co., Ltd since July 2021.

Since November 2022, he has also served as an independent director of Shenzhen Fushiyuan

Intelligent Fire Protection Co., Ltd, responsible for supervising the formulation and implementation of personnel recruitment, assessment,

reward and other systems in the company.

Huang received a bachelor’s degree in administration management from University of

Electronic Science and Technology of China in 2021.

We believe Mr.

Gan is qualified to

serve as our director due to his extensive knowledge and background in accounting and management.

Huang is qualified to serve as our director due to his knowledge and

background in the management field.

Jing Guo - Director

Jing Guo, age 35, has served as the Human Resources Director (Vice President level) of All Home Furnishings Limited since December 2020.

Guo received a bachelor’s degree in Electronic Information Engineering from the University of Electronic Science and Technology

of China in 2012.

Jing Guo, has served as the Human Resources Director (Vice President

level) of All Home Furnishings Limited since December 2020.

Guo received a bachelor’s degree in Electronic Information Engineering

from the University of Electronic Science and Technology of China in 2012.

The Board believes Ms.

Guo’s extensive knowledge and background in the fields of human resources management and

corporate administration will make her a valuable addition to the Board.

Guo’s extensive knowledge and

background in the fields of human resources management and corporate administration will make her a valuable addition to the Board.

Yunna Liu - Director

Yunna Liu, has more than

twenty years of professional experience in auditing, accounting, and financial management.

From November 2024 to October 2025, Ms.

served as Manager of the Financial Review and Consolidation Department at Hongkong Succeed Capital limited, where she was responsible

for pre-IPO financial due diligence and consolidation reporting for China-based companies seeking U.S.

Since December 2024,

she has also served as an independent director and Chairperson of the Audit Committee of Anhui Zhengxiaowan Catering Co., Ltd.

2018 to October 2024, Ms.

Liu was an Audit Manager at Sichuan Anbixin Certified Public Accountants Co., Ltd.

Liu holds a bachelor’s

degree in Finance from Southwestern University of Finance and Economics.

She is a non-practicing member of the Chinese Institute of Certified

Public Accountants (CPA) and holds an Intermediate Accounting Professional Title.

Family Relationships

are no other family relationships between any of our directors or executive officers, except that former

Jiaying Cai is the niece of Mr.

Guangrong Cai .

arrangements or understandings between our directors and any other person pursuant to which they were appointed as an officer or

director of the Company.

is no family relationship among any of our directors or executive officers.

There are no arrangements or understandings between our directors

and any other person pursuant to which they were appointed as an officer or director of the Company.

Board Committees

4 unchanged sentences

Each committee’s members and functions are described

Our audit committee consists of Jing Chen, Jiaxing Huang and Guijun

Chen is the chairperson of the audit committee.

Our audit committee consists of Yunna Liu, Jing Guo and Jiaxing.

Liu is the chairperson of the audit committee.

We have determined that Ms.

Huang and Mr.

Gan each satisfy the

“independence” requirements of Nasdaq Listing Rule 5605(a)(2) and meet the independence standards under Rule 10A-3 under the

Exchange Act.

Huang each satisfy the “independence” requirements of Nasdaq Listing Rule

5605(a)(2) and meet the independence standards under Rule 10A-3 under the Exchange Act.

We have determined that Ms.

Chen qualifies as an “audit committee financial expert.”

Liu qualifies as an

“audit committee financial expert.”

have adopted an audit committee charter, which details the principal responsibilities of the audit committee, including:

23 unchanged sentences

and (e) approving related person transactions.

Our compensation committee consists of Jing Chen, Jiaxing Huang and Guijun

Huang is the chairperson of our compensation committee.

Our compensation committee consists of Yunna Liu, Jing Guo and Jiaxing

Guo is the chairperson of our compensation committee.

We have determined that Ms.

Huang and Mr.

“independent,” as such term is defined for directors and compensation committee members in the listing standards of the NASDAQ

Stock Market LLC.

Additionally, each qualifies as “non-employee directors” for purposes of Rule 16b-3 under the Securities

Exchange Act of 1934 and as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code.

Huang each are “independent,”

as such term is defined for directors and compensation committee members in the listing standards of the NASDAQ Stock Market LLC.

Additionally,

each qualifies as “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934 and as “outside

directors” for purposes of Section 162(m) of the Internal Revenue Code.

have adopted a compensation committee charter, which details the principal responsibilities of the compensation committee, including:

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and Corporate Governance Committee.

Our nominating and corporate governance committee consists of Jing Chen, Jiaxing

Huang and Guijun Gan .

Gan is the chairperson of our nominating and corporate governance

We have determined that each of Ms.

Our nominating and corporate governance committee consists of Yunna

Liu, Jing Guo and Jiaxing, Huang.

Huang is the chairperson of our nominating and corporate governance committee.

We have determined

that each of Ms.

Huang and Mr.

Gan qualifies as “independent” as that term is defined

by Nasdaq Listing Rule 5605(a)(2).

Huang qualifies as “independent” as that term is defined by Nasdaq Listing Rule 5605(a)(2).

have adopted a nominating and corporate governance committee charter, which details the principal responsibilities of the nominating and

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16(a) Reports

Section 16(a) of the Securities

Exchange Act of 1934 requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities

(“Reporting Persons”) to file reports of ownership and changes in ownership with the SEC.

Based solely on our review of copies

of such reports and representations from the Reporting Persons, we believe that during the fiscal year ended December 31, 2024, the Reporting

Persons timely filed all such reports, except that Ms.

Section 16(a) of the Securities Exchange Act of 1934 requires our executive

officers and directors, and persons who beneficially own more than 10% of our equity securities (“Reporting Persons”) to file

reports of ownership and changes in ownership with the SEC.

Based solely on our review of copies of such reports and representations from

the Reporting Persons, we believe that during the fiscal year ended December 31, 2025, the Reporting Persons timely filed all such reports,

except that Ms.

Xing Tang, our CFO, Mr.

Guangrong Cai, our Chairman, and Mr.

Huang and Mr.

Guijun Gan, our directors, failed to timely file Forms 3 as officers and directors of the Company.

Guangrong Cai, our Chairman, Mr.

Jiaxing Huang, Mr.

Jian Feng, Ms.

Yunna Liu, our directors, failed to timely file Forms 3 as officers and directors of the Company.

No securities

1 unchanged sentence

Xing Tang, Mr.

Jiaxing Huang and Mr.

Jiaxing Huang, Mr.

Jian Feng, and Ms.

EXECUTIVE COMPENSATION

2 unchanged sentences

Name and principal position

Option awards

All other compensation

Zongyi Lian, President, Chief Executive Officer

1 unchanged sentence

Xing Tang, Chief Financial Officer (2)

Yuhua Huang resigned as Chief Financial Officer of the Company on July 8, 2024.

Xing Tang was appointed as Chief Financial Officer of the Company on July 8, 2024.

(1) Yuhua Huang resigned

as Chief Financial Officer of the Company on July 8, 2024.

(2) Xing Tang was appointed as Chief

Financial Officer of the Company on July 8, 2024.

Employment Agreements

3 unchanged sentences

to RMB48,000) and subsidies of approximately $8,904 (equivalent to RMB64,000).

Lian’s employment is for an initial term of three

(3) years and may be renewed by the parties within 30 days prior to the expiration of the employment agreement.

Lian’s employment is for an initial term of

three (3) years and may be renewed by the parties within 30 days prior to the expiration of the employment agreement.

On November 13,

2020, the employment agreement with Mr.

Lian was renewed for another three (3) years until November 20, 2023, with similar terms and conditions.

Lian was renewed for another three (3) years until November 20, 2023, with similar terms and

Amount reflects salary paid to Mr.

Lian for services rendered to our former operating subsidiary, Sichuan Wetouch.

Such employment agreement

has been assigned to our PRC subsidiary, Sichuan Vtouch.

On April 16, 2024, our board of directors ratified and approved the extension

of the term of employment of Mr.

Such employment

agreement has been assigned to our PRC subsidiary, Sichuan Vtouch.

On April 16, 2024, our board of directors ratified and approved the

extension of the term of employment of Mr.

Lian as our CEO for another three years from November 21, 2023 under the same terms and conditions.

expect to enter into a new agreement with Mr.

We expect to enter into a new agreement with Mr.

Lian to memorialize the terms and conditions and expect to file with the SEC upon execution.

26 unchanged sentences

On April 16, 2024, our board of directors ratified and approved the extension of the term of employment of Mr.

Huang as our Chief

Financial Officer for another three years starting from November 1, 2023 under the same terms and conditions.

8, 2024, Yuhua Huang resigned as Chief Financial Officer of the Company and ceased to be

employed by us.

Huang as our Chief Financial

Officer for another three years starting from November 1, 2023 under the same terms and conditions.

On July 8, 2024, Yuhua Huang resigned

as Chief Financial Officer of the Company and ceased to be employed by us.

July 8, 2024, the Company and Xing Tang entered into an executive officer agreement.

3 unchanged sentences

month (which shall accrue on a daily basis).

The agreement contains customary restrictive

covenants related to non-conflict and non-competition, confidentiality covenants restricting disclosures of trade secrets and other confidential

The agreement may be terminated by the Company at any time, without notice or

remuneration (unless notice or remuneration is specifically required by applicable law, in which case notice or remuneration will be provided

in accordance with applicable law) for cause (including but not limited to gross negligence, willful

misconduct or failure to perform duties), or due to death or disability, or without cause by providing one-month prior written notice.

Xing Tang may terminate the employment at any time with a one-month prior written notice to the Company if (1) there is a material

reduction in her authority, duties and responsibilities, or (2) there is a material reduction in her annual salary.

The agreement contains customary restrictive covenants related to non-conflict and non-competition,

confidentiality covenants restricting disclosures of trade secrets and other confidential information.

The agreement may be terminated

by the Company at any time, without notice or remuneration (unless notice or remuneration is specifically required by applicable law,

in which case notice or remuneration will be provided in accordance with applicable law) for cause (including but not limited to gross

negligence, willful misconduct or failure to perform duties), or due to death or disability, or without cause by providing one-month prior

written notice.

Xing Tang may terminate the employment at any time with a one-month prior written notice to the Company if (1) there is

a material reduction in her authority, duties and responsibilities, or (2) there is a material reduction in her annual salary.

Confidentiality

49 unchanged sentences

Outstanding Equity Awards at Fiscal Year-End

are no outstanding equity awards to our executive officers as of December 31, 2024.

There are no outstanding equity awards to our executive officers as

of December 31, 2025.

Long-Term Incentive

1 unchanged sentence

Director Compensation

table below shows the compensation paid to our non-employee directors during 2024.

table below shows the compensation paid to our non-employee directors during 2025 (Amounts in US dollars).

Incentive Plan

Xiaojin Tang(2)

Congjin Wang(3)

Yunna Liu (1)

Jian Feng (3)

Jiaxing Huang (4)

Guijun Gan (5)

Accrued and not paid, except Jing Chen’s.

Fei Bai resigned as Chairman and a director of the Company on June 3, 2024.

Xiaojin Tang resigned as a director of the Company on June 3, 2024.

Congjin Wang resigned as a director of the Company on June 3, 2024.

Jing Chen (6)

Jiaying Chai (7)

Yunna Liu was appointed as a director of the Company on November 1, 2025.

Jing Guo was appointed as a director of the Company on May 1, 2025.

Jian Feng was appointed as a director on September 5, 2025

Jiaxing Huang was appointed as a director of the Company on June 28, 2024, effective July 1, 2024.

Guijun Gan was appointed as a director of the Company on June 28, 2024, effective July 1, 2024.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

following table lists, as of September 8, 2025, the number of shares of common stock beneficially owned by (i) each person, entity or

group (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial owner

of more than 5% of the outstanding common stock;

(ii) each of our directors (iii) each of our Named Executive Officers and (iv) all executive

officers and directors as a group.

information with respect to beneficial ownership has been furnished by the respective 5% or more stockholders, directors or executive

officers, as the case may be.

Guijun Gan resigned as a director of the Company on September 16, 2025.

(6) Jing Chen resigned as a director of the Company on April

(7) Jiaying Cai resigned as a member of the Board of Directors

on September 4, 2025.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

The following table lists, as of April 8, 2026, the number of shares

of common stock beneficially owned by (i) each person, entity or group (as that term is used in Section 13(d)(3) of the Securities Exchange

Act of 1934) known to the Company to be the beneficial owner of more than 5% of the outstanding common stock;

(ii) each of our directors

(iii) each of our Named Executive Officers and (iv) all executive officers and directors as a group.

All information with respect

to beneficial ownership has been furnished by the respective 5% or more stockholders, directors or executive officers, as the case may

Unless otherwise noted, the mailing address of each listed beneficial owner is No.

29, Third Main Avenue,

Shigao Town, Renshou County, Meishan, Sichuan, China.

percentages below were calculated based on 11,931,534 shares of common stock issued and outstanding as of September 8, 2025.

Beneficially Owned

of Beneficial Owner

Officers and Directors:

29, Third Main Avenue, Shigao Town, Renshou County,

Meishan, Sichuan, China.

The percentages below were calculated based on 11,931,534 shares of

common stock issued and outstanding as of April 8, 2026.

Shares Beneficially Owned

Name of Beneficial Owner

Executive Officers and Directors:

Guangrong Cai (1)

1 unchanged sentence

Jiaxing Huang

All officers and directors

as a group (7 persons)

Greater Holders:

Represents 9,576 shares

of common stock held of record by Guangrong Cai, Chairman of the Company.

Represents 5,657 shares

of common stock held of record by Zongyi Lian, Chief Executive Officer of the Company.

in Control Agreements

of the date of this Annual Report, we are not aware of any arrangements that may result in “changes in control,” as that

term is defined by Item 403(c) of Regulation S-K.

September 4, 2025, Jiaying Cai resigned as a member of the Board of Directors (the “Board”).

Jiaying Cai’s decision

to resign was not the result of any disagreement with the Company, the Board, management, or any matter relating to the Company’s

operations, policies or practices.

April 29, 2025, Jing Chen resigned as a member of the Board of Directors (the “Board”).

Jing Chen’s decision to

resign was not the result of any disagreement with the Company, the Board, management, or any matter relating to the Company’s

operations, policies or practices.

July 8, 2024, Mr.

Yuhua Huang resigned as a Chief Financial Officer of Wetouch Technology Inc.

(the “Company”).

decision to resign was not the result of any disagreement with the Company, the Board of Directors (the “Board”), management,

or any matter relating to the Company’s operations, policies or practices.

June 3, 2024, Mr.

Fei Bai resigned as a member of the Board of Directors (the “Board”) and as the Chairman of the Board.

Bai’s decision to resign was not the result of any disagreement with the Company, the Board, management, or any matter relating

to the Company’s operations, policies or practices.

June 3, 2024, Mr.

Xiaojin Tang resigned as a member of the Board and the Audit Committee, the Compensation Committee, and the Nominating

and Corporate Governance Committee of the Board, including as chairperson of the Compensation Committee.

Tang’s decision to

resign was not the result of any disagreement with the Company, the Board, management, or any matter relating to the Company’s

operations, policies or practices.

June 3, 2024, Mr.

Congjin Wang resigned as a member of the Board and the Audit Committee, the Compensation Committee, and the Nominating

and Corporate Governance Committee of the Board, including as chairperson of the Nominating and Corporate Governance Committee.

decision to resign was not the result of any disagreement with the Company, the Board, management, or any matter relating to the Company’s

operations, policies or practices.

September 5, 2025, the Board appointed Jian Feng to serve as a member of the Board.

May 1, 2025, the Board appointed Jing Guo to serve as a member of the Board, the Audit Committee, the Compensation Committee, and the

Nominating and Corporate Governance Committee of the Board, including as the Chairperson of the Nominating and Corporate Governance Committee.

May 1, 2025, the Board appointed Guijun Gan to serve as the Chairperson of the Audit Committee of the Board and removed him from his

position as the Chairperson of the Nominating and Corporate Governance Committee of the Board.

July 8, 2024.

the Board of Company appointed Xing Tang to serve as the Chief Financial Officer of the Company.

June 28, 2024, the Board of Directors (the “Board”) appointed Guangrong Cai to serve as a member of the Board and Chairman

of the Board.

June 28, 2024, the Board of Directors (the “Board”) appointed Jiaxing Huang to serve as a member of the Board, the Audit

Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee of the Board, including as chairperson of

the Compensation Committee.

June 28, 2024, the Board of Directors (the “Board”) appointed Guijun Gan to serve as a member of the Board, the Audit Committee,

the Compensation Committee, and the Nominating and Corporate Governance Committee of the Board, including as chairperson of the Nominating

and Corporate Governance Committee.

All officers and directors as a group (8 persons)

5% or Greater Holders:

Represents 9,576 shares of common stock held of record by Guangrong Cai, Chairman of the Company.

Changes in Control

As of the date of this Annual

Report, we are not aware of any arrangements that may result in “changes in control,” as that term is defined by Item 403(c)

of Regulation S-K.

CERTAIN RELATIONSHIPS AND RELATED

4 unchanged sentences

of the Company’s average total assets at year-end for the last two completed fiscal years, and in which a related person had a material

As of December 31, 2024,

the Company had an outstanding payable of approximately $149,211 due to Chengdu Wetouch Intelligent Optoelectronics Co., Ltd., an

affiliate of Ms.

Jiaying Cai, a former director and secretary of the Company.

The balance was nil as of December 31, 2023.

advances were unsecured, non-interest bearing, and due on demand.

As of December 31, 2025 and 2024, the Company had an outstanding payable

of approximately $286,311 and $149,211, respectively, due to Chengdu Wetouch Intelligent Optoelectronics Co., Ltd., an affiliate of Ms.

Jiaying Cai, a former director and secretary of the Company, and niece of Mr.

Guangrong Cai.

These payable were unsecured, non-interest

bearing, and due on demand.

The Company’s Audit

5 unchanged sentences

Family Relationships

The only family relationship among the Company’s directors and

executive officers was that Ms.

Jiaying Cai, a former Director and secretary of the Company, is the niece of Mr.

Guangrong Cai, Chairman

of the Company.

The only family relationship

among the Company’s directors and executive officers was that Ms.

Jiaying Cai, a former Director and secretary of the Company, is

the niece of Mr.

Guangrong Cai, Chairman of the Company.

Director Independence

6 unchanged sentences

Based on this review, the

Board has determined that each of Jing Chen, Jiaxing Huang, and Guijun Gan qualifies as an independent director under Nasdaq Listing Rule

Board has determined that each of Jing Guo, Jiaxing Huang, and Yunna Liu qualifies as an independent director under Nasdaq Listing Rule

In addition, the Board determined that these directors meet the heightened independence standards applicable to audit committee

1 unchanged sentence

Chen also qualifies as an “audit committee financial expert” as defined by SEC rules.

The remaining directors, Guangrong Cai, Zongyi Lian, Jian Feng, and

Jing Guo, are not considered independent because of their current roles as executive officers of the Company or family relationship, as

described above.

The remaining directors, Guangrong

Cai, Zongyi Lian, Jian Feng, are not considered independent because of their current roles as executive officers of the Company or family

relationship, as described above.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

For fiscal year 2024, we incurred

aggregate fees and expenses of $250,000 from Enrome LLP for work completed related to our

annual audit and quarterly reviews.

For fiscal year 2023, we incurred

aggregate fees and expenses of $275,000 from B F Borgers CPA PC for work completed related to our annual audits and quarterly reviews.

For the years ended December 31, 2025 and 2024, we incurred aggregate

fees and expenses of $245,000 and $475,000, respectively, from ST & Partners PLT and Enrome LLP for works completed for our annual

audits and quarterly reviews.

On June 27, 2025, the audit committee of the Company’s

board of directors approved the dismissal of Enrome LLP and the engagement of ST & Partners PLT as the Company’s independent

registered public accounting firm for the fiscal year ending December 31, 2026.

Audit-Related Expenses

18 unchanged sentences

Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation

Exhibit Number

Description of Document

Share Exchange Agreement dated October 9, 2020 among Wetouch Technology Inc.

f/k/a Gulf West Investment Properties, Inc., Wetouch Holding Group Limited, the shareholders of Wetouch Holding Group Limited, Hong Kong Wetouch Electronics Technology Limited and Fengfei Zhang, as administrative agent for the sellers.

Amended and Restated Articles of Incorporation of the Company, dated September 30, 2020.

Second Amended and Restated Articles of Incorporation of the Company, dated January 7, 2026 ((incorporated herein by reference to Exhibit 3.1 to the Company’s Current Reports on Form 8-K filed with the Securities and Exchange Commission on January 7, 2026).

Bylaws of the Company.

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Form of Underwriter’s Warrants.

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

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

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

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

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

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

English Translation of Employment Agreement between Sichuan Wetouch Technology Co., Ltd and Zongyi Lian.

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Purchase Order with Suppliers.

English Translation of Form of Loan Agreement between Sichuan Wetouch Technology Co., Ltd and Shareholder of Australia Vtouch Technology Co., Ltd.

English Translation of Form of Supplemental Agreement to Loan Agreement between Sichuan Wetouch Technology Co., Ltd and Shareholder of Australia Vtouch Technology Co., Ltd.

English Translation of Renewed Employment Agreement between Sichuan Wetouch Technology Co., Ltd and Zongyi Lian dated November 13, 2020.

English Translation of Renewed Confidentiality and Non-Competition Agreement between Sichuan Wetouch Technology Co., Ltd and Zongyi Lian dated November 13, 2020.

Translation of Form of Sichuan Wetouch Technology Co., Ltd.

English Translation of Form of Sichuan Wetouch Technology Co., Ltd.

Supplemental Agreement to Sales Framework Agreement dated April 2024.

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Form of Director Offer Letter

English Translation of Lease Agreement, dated August 9, 2024, between Sichuan Vtouch Technology Co., Ltd and Sichuan Renshou Shigao Tianfu Investment Co., Ltd.

Ethics (incorporated by reference to the Annual Report on Form 10-K for the fiscal year ended December 31, 2022)

English Translation of Lease Agreement, dated September 29, 2025, between

Sichuan Vtouch Technology Co., Ltd and Sichuan Renshou Shigao Tianfu Investment Co., Ltd.

Code of Ethics (incorporated by reference to the Annual Report on Form 10-K for the fiscal year ended December 31, 2022)

Insider Trading Policy.

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duly authorized.

September 10, 2025

April 13, 2026

WETOUCH TECHNOLOGY INC.

9 unchanged sentences

/s/ Zongyi Lian

September 10, 2025

April 13, 2026

Chief Executive Officer and

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Chief Financial Officer

September 10, 2025

April 13, 2026

(Principal Financial and Accounting Officer)

1 unchanged sentence

Chairman and Director

September 10, 2025

April 13, 2026

Guangrong Cai

September 10, 2025

/s/ Jian Feng

Secretary and Director

April 13, 2026

/s/ Jiaxing Huang

September 10, 2025

April 13, 2026

Jiaxing Huang

/s/ Guijun Gan

September 10, 2025

/s/ Yunna Liu

April 13, 2026

Financial Statements

WETOUCH TECHNOLOGY INC.

AND SUBSIDIARIES

AND ITS SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered

Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2024

Consolidated Statements of Income and Comprehensive

Income for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Changes in Stockholders’

Equity for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Cash Flows for the Years

Ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements as of December

31, 2024 and 2023

Report of Independent Registered Public Accounting

To the Board of Directors and Shareholders of

Wetouch Technology Inc.

Report of Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2025 and 2024

Statements of Income and Comprehensive Income for the Years Ended December 31, 2025 and 2024

Statements of Changes in Stockholders’ Equity for the years Ended December 31,2025 and 2024

Statements of Cash Flows for the years Ended December 31,2025 and 2024

Notes to Consolidated Financial Statements

Report of Independent Registered Public

Accounting Firm

To the Shareholders and the Board of Directors of Wetouch Technology

Opinion on the Financial Statements

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balance sheets of Wetouch Technology Inc.

and its subsidiaries (collectively, the “Company”) as of December 31, 2024 and 2023,

and the related consolidated statements of income and comprehensive income, changes in shareholders’ equity (deficit), and cash

flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated

financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years

in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America (“U.S.

and its subsidiaries (collectively, the”Company”) as of December 31, 2025 and the

related consolidated statements of operation and comprehensive loss, consolidated statements of changes in shareholders ‘equity,

and consolidated statements of cash flows for the years in the period ended December 31, 2025, and the related notes (collectively referred

to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for each of the two years

in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statement.

We believe that our audits provide

a reasonable basis for our opinion.

/s/ ST & PARTNERS PLT (PCAOB ID

We have served as the Company’s auditor

Petaling Jaya, Malaysia

September 10, 2025

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below

are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to

the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our

especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/S/ ST & Partners PLT

April 13, 2026

We have served as the Company’s auditor since 2025

PCAOB ID Number 7261

WETOUCH TECHNOLOGY INC.

AND SUBSIDIARIES

AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Currency expressed in United States Dollars(“US”),

except for number of shares)

As of December 31,

(Currency expressed in United States

Dollars(“US”), except for number of shares)

CURRENT ASSETS

$ 118,363,448

$ 103,760,324

Accounts receivable, net

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Property, plant and equipment, net

Land use right, net

Operating right-of-use assets

Deferred tax assets

Long-term prepayment

$ 140,637,048

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Accounts payable

Due to related parties

Due to a related party

Accrued expenses and other current liabilities

Convertible promissory notes payable

Operating lease liabilities- current

TOTAL CURRENT LIABILITIES

Common stock purchase warrants liability

Operating lease liabilities- non current

TOTAL LIABILITIES

COMMITMENTS AND CONTINGENCIES (Note 13)

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY

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restated for effect of reverse stock split (1-for-20), see Note 12 (2)

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

The accompanying notes are an integral part of

these consolidated financial statements.

WETOUCH TECHNOLOGY INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE

(Currency expressed in United States Dollars(“US”),

except for number of shares)

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

(Currency expressed in United States

Dollars(“US”), except for number of shares)

The Years Ended

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( 3,536,597 )

Research and development expenses

OPERATING EXPENSES

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( 1,169,974 )

Other income (expense)

Gain (loss)on changes in fair value of common stock purchase warrants liability

TOTAL OTHER EXPENSE, NET

INCOME BEFORE INCOME TAX EXPENSE

INCOME TAX EXPENSE

TOTAL OTHER INCOME (EXPENSE), NET

INCOME BEFORE INCOME TAX EXPENSES

INCOME TAX EXPENSES

( 2,998,350 )

3 unchanged sentences

( 3,355,857 )

( 4,297,908 )

COMPREHENSIVE INCOME

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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING*

* Retrospectively

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

* Retrospectively restated for effect of reverse stock split (1-for-20), see Note 12 (2)

The accompanying notes are an integral part of

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WETOUCH TECHNOLOGY INC.

AND SUBSIDIARIES

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

(Currency expressed in United States Dollars(“US”),except

for number of shares)

Common stock at

Par value $0.001

comprehensive

stockholders’

Balance at December 31 2022*

$ ( 2,977,524 )

Appropriation to statutory reserve

( 1,154,131 )

Shares issued to private placement

Fraction shares issued due to reverse stock split

Exercise of warrants issued to third parties in conjunction with debt issuance in 2021

Stock issuance for convertible promissory notes payable

Foreign currency translation adjustment

( 4,297,908 )

Balance at December 31, 2023

$ ( 7,275,432 )

$ 112,920,610

Common stock at

Par value $0.001

(Currency expressed in United States

Dollars(“US”), except for number of shares)

Common stock at Par value $0.001

Additional paid-in

comprehensive

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Balance as of December 31 2023*

$ ( 7,275,432 )

$ 112,920,610

Issuance of common stock from the 2024 Public Offering, net of issuance costs

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Foreign currency translation adjustment

( 3,355,857 )

Balance as of December 31, 2024

$ ( 10,631,289 )

$ 124,585,665

* Retrospectively

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

Foreign currency translation adjustment

Balance as of December 31, 2025

* Retrospectively restated for effect of reverse stock split (1-for-20), see Note 12 (2)

The accompanying notes are an integral part of

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WETOUCH TECHNOLOGY INC.

AND SUBSIDIARIES

AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

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Adjustments to reconcile net income to cash provided by operating activities

Allowance for credit losses

Provision for obsolete inventory

(Reversal of) allowance for credit losses

(Reversal of) provision for obsolete inventory

Depreciation and amortization

Impairment loss on construction in progress

Amortization of discounts and issuance cost of the notes

(Gain) loss on changes in fair value of common stock purchase warrants liability

(Gain) on changes in fair value of common stock purchase warrants liability

Amortization of operating Right-of-use assets

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Accounts receivable

Due from a related party

Prepaid expenses and other current assets

1 unchanged sentence

Deferred tax assets

Long-term investment

( 4,388,965 )

Accounts payable

Loans from a third party

Amounts due to related parties

Income tax payable

Due to related parties

Accrued expenses and other current liabilities

4 unchanged sentences

Purchase of property, plant and equipment

( 2,263,549 )

Net cash used in investing activities

( 2,263,549 )

Cash flows from financing activities

Proceeds from issuance of public offerings, net of expenses

Proceeds from stock issuance of private placement

Repayments of convertible promissory notes payable

( 1,400,750 )

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Effect of changes of foreign exchange rates on cash

( 2,666,482 )

( 3,615,791 )

Net increase in cash

2 unchanged sentences

$ 118,363,448

$ 103,760,324

Supplemental disclosures of cash flow information

2 unchanged sentences

Supplemental disclosures of non-cash flow information

Cashless stock issuance for convertible promissory notes payable

Issue costs charged to additional paid-in capital

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WETOUCH TECHNOLOGY INC.

AND SUBSIDIARIES

AND ITS SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — ORGANIZATION AND BUSINESS

NOTE 1 — BUSINESS DESCRIPTION

Wetouch Technology Inc.

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The touchscreen products, which are manufactured by the Company, are

primarily for use financial terminals, automotive, Point of Sales, gaming, lottery, medical, Human-Machine Interface (HMI) ,

and other specialized industries

primarily for use in financial terminals, automotive, Point of Sales, gaming, lottery, medical, Human-Machine Interface (HMI), and other

specialized industries.

The Reverse Merger was

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The number of shares, par value amount, and additional paid-in capital in the prior years are retrospectively adjusted accordingly.

wholly-owned subsidiaries, the Company is engaged in the research, development, manufacturing, sales and servicing of medium to

large sized projected capacitive touchscreens.

The Company specializes in large-format touchscreens, which are developed and

designed for a wide variety of markets and used in the financial terminals, automotive, Point of Sales, gaming, lottery, medical,

Human-Machine Interface (“HMI”), and other specialized industries.

Corporate History

11 unchanged sentences

In June 2021, Hong Kong

Wetouch completed its dissolution process pursuant to the minutes of its special shareholder meeting.

Wetouch completed its dissolution process pursuant to the minutes of its special stockholder meeting.

Sichuan Wetouch was formed

on May 6, 2011 in the PRC and became a Wholly Foreign-Owned Enterprise (“WFOE”) in PRC on February 23, 2017.

On July 19, 2016, Sichuan

Wetouch was 100 % held by HK Wetouch.

On July 19, 2016,

Sichuan Wetouch was 100 % held by HK Wetouch.

On December 30, 2020,

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As a result of the above

restructuring, HK Wetouch became the sole shareholder of Sichuan Vtouch.

restructuring, HK Wetouch became the sole stockholder of Sichuan Vtouch.

The following diagram illustrates the Company’s

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and balances have been eliminated upon consolidation

Deconsolidation of Sichuan Wetouch

On March 30, 2023, upon transferring Sichuan Wetouch

to a third-party individual for a nominal value, the Company was no longer able to operate and exert control over this subsidiary whose

operation has been taken over by Sichuan Vtouch since the first quarter of 2021.

As a result, Sichuan Wetouch was deconsolidated accordingly

since the disposal date.

The deconsolidated Sichuan

Wetouch had assets, liabilities and the non-controlling interest on disposal date as the following:

Total assets as of deconsolidated date

Total liabilities as of deconsolidated date

Total gain or loss from deconsolidation

Upon the deconsolidation,

the Company was no longer entitled to the assets and also legally released from the liabilities previously held by the deconsolidated

Sichuan Wetouch, derived nil gain or loss from the deconsolidation in the consolidated statements of operations and comprehensive income

for the year ended December 31, 2023.

The disposal of Sichuan Wetouch did not represent a strategic shift and did not have a major effect

on the Company’s operation.

There was no cash outflow for the disposal for the year ended December 31, 2023.

(b) Uses of estimates

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The Company adopted ASC 326, Financial

Instruments — Credit Loss on January 1, 2023 using the modified retrospective approach.

Upon adoption of

ASC 326 starting from January 1, 2023, the provision of credit losses for accounts receivable is based upon the current expected credit

losses (“CECL”) model.

The CECL model requires an estimate of the credit losses expected over the life of accounts receivable

since initial recognition, and accounts receivable with similar risk characteristics are grouped together when estimating CECL.

the CECL, the Company considers both quantitative and qualitative information that is reasonable and supportable, including historical

credit loss experience, adjusted for relevant factors impacting collectability and forward-looking information indicative of external

market conditions.

While the Company uses the best information available in making determination, the ultimate recovery of recorded receivables

is also dependent upon future economic events and other conditions that may be beyond the Company’s control.

Accounts receivable

which are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential

for recovery is considered remote.

There is a time lag between when the Company estimates a portion of or the entire account balances

to be uncollectible and when a write off of the account balances is taken.

The Company does not have any off-balance sheet credit exposure

related to its customers.

Instruments — Credit Loss to estimate the allowance of credit losses for accounts receivable based upon the

current expected credit losses (“CECL”) model.

The CECL model requires an estimate of the credit losses expected over the

life of accounts receivable since initial recognition, and accounts receivable with similar risk characteristics are grouped together

when estimating CECL.

In assessing the CECL, the Company considers both quantitative and qualitative information that is reasonable and

supportable, including historical credit loss experience, adjusted for relevant factors impacting collectability and forward-looking information

indicative of external market conditions.

While the Company uses the best information available in making determination, the ultimate

recovery of recorded receivables is also dependent upon future economic events and other conditions that may be beyond the Company’s

Accounts receivable which are deemed to be uncollectible are charged off against the allowance after all means of collection

have been exhausted and the potential for recovery is considered remote.

There is a time lag between when the Company estimates a portion

of or the entire account balances to be uncollectible and when a write off of the account balances is taken.

The Company does not have

any off-balance sheet credit exposure related to its customers.

(e) Inventory

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Inventories are carried at this lower cost basis until sold or scrapped.

$ 54,873 and nil inventory write-off were recorded

for the years ended December 31, 2024 and 2023, respectively.

Reversal of obsolete inventory and write-off inventory

were $ 36,971 and $ 54,873 were recorded for the years ended December 31, 2025 and 2024, respectively.

(f) Property, plant and equipment, net

17 unchanged sentences

No depreciation is recorded for construction in progress.

management estimate that construction in progress for our new facilities will be completed by the end of fourth quarter of 2026 and will

transfer construction in progress to property, plant and equipment to start depreciation.

(g) Convertible Promissory Notes

The Company accounts for its convertible promissory

notes according to guidance of ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an

Entity’s Own Equity”, which simplifies the accounting for convertible instruments by eliminating the requirement to separate

embedded conversion features from the host contract when the conversion features are not required to be accounted for as derivatives under

We analyze the convertible notes for the existence

of a beneficial conversion feature.

the Company considered the three characteristics of a derivative instrument listed in ASC 815-10-15-83:

(i) having one or more underlyings and one or more notional amounts or payment provisions or both;

(ii) requiring no initial net investment;

(iii) permitting net settlement;

Since the Company’s

notes have fixed interest rate, specified notional principal and settlement date, which no other events would affect specified settlement,

and the Company received net proceeds after issuance costs and discount, which the Company recorded as the net proceeds or net settled

investment, the management assessed that the Notes did not meet the definition of a derivative instruments and an embedded feature would

not be bifurcated.

The discounts on the convertible notes, are amortized to interest expense, using the effective interest method, over

the terms of the related convertible notes.

On February 23, 2024,

immediately upon the closing of the 2024 Public Offering, the Company made a full payment to the remaining five outstanding promissory

(see details in NOTE 10 – CONVERTIBLE PROMISSORY NOTES PAYABLE-a) Convertible promissory notes).

There were no convertible

promissory notes as of December 31, 2024.

(h) Common stock purchase warrants

The construction of the new facility was delayed

first due to the impact of COVID 19 and later the supply of the construction materials.

The management estimate that construction in

progress for our new facilities will be completed by the end of first half of 2027 and will transfer construction in progress to property,

plant and equipment to start depreciation.

A land use right in the PRC represents an exclusive

right to occupy, use and develop a piece of land during the contractual term of the land use right.

Land use right is usually paid in

one lump sum at the date the right is granted or at the date of the prepayment pursuant to the land use right transfer contract with the

local government.

The prepayment usually covers the entire duration period of the land use right.

The lump sum advance payment is capitalized

and recorded as land use right and then charged to expense on a straight-line basis over the period of the right.

On August 6, 2021, Sichuan Vtouch entered into

a contract with Chengdu Wenjiang District Planning and Natural Resources Bureau (“Wenjiang Bureau”) for the purchase of a

land use right of a parcel of land of 131,010 square feet ( 12,171 .

28 square meters) for a consideration of RMB 3,925,234 (equivalent

to $ 561,301 ) for the Company’s new facility.

The Company paid the consideration in full by November 18, 2021 and recorded in the

Pursuant to the contract, Sichuan Vtouch will

construct a new facility on this parcel according to the specifications.

Once the Project is fully completed, Wenjiang Bureau shall transfer

the title of land use right to Sichuan Vtouch for 20 years.

The Company’s new facility started in August

2021 yet was delayed and suspended due to the outbreak of Covid-19 and government-ordered shutdowns in China.

The Company has rescheduled

and extended the completion by first half of 2027 with the production at the new facilities will commencing by the end of 2027.

During the years ended December 31, 2025, management

assessed the probability of the obtaining the land use right upon the completion of the new facility, reclassified prepayment of RMB 3,925,234

(equivalent to $ 561,301 ) to land use right, started the amortization by a useful life of approximately 16 years.

The amortization expense of land use rights was

US$ 16,718 for the years ended December 31, 2025, and included in general and administrative expenses.

Land use right 16 years

The Company adopted ASU No.

2016-02, Leases (Topic

842) (“ASU 2016-02”) for all periods presented.

The Company elected the short-term lease exemption for all contracts with

lease terms of 12 months or less.

Under the guidance of ASU 2016-02, an entity is

required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements.

The Company’s lease terms include options

to renew or terminate the lease when it is reasonably certain that it will exercise the option.

The Company determines if a contract contains

a lease based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset that

the Company does not own and whether it has the right to direct the use of an identified asset in exchange for consideration.

use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities

represent the Company’s obligation to make lease payments arising from the lease.

ROU assets are recognized as the amount of the

lease liability, adjusted for lease incentives received.

Lease liabilities are recognized at the present value of the future lease payments

at the lease commencement date.

The interest rate used to determine the present value of the future lease payments is the Company’s

incremental borrowing rate (“IBR”), because the interest rate implicit in most of the Company’s leases is not readily

determinable.

The IBR is a hypothetical rate based on the Company’s understanding of what its credit rating would be and the resulting

interest it would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized

Lease payments may be fixed or variable, however, only fixed payments or in-substance fixed payments are included in the Company’s

lease liability calculation.

Variable lease payments are recognized in operating expenses in the period in which the obligation for those

payments is incurred.

The lease right-of-use assets are initially measured

at the carrying amount of the lease liability and adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives

received, unamortized initial direct costs, or impairment charges relating to the right-of-use-asset.

Lease expense for minimum lease

payments exclusive of value-added tax is recognized on a straight-line basis over the lease term The new standard provides a number of

optional practical expedients at transition.

The Company elected certain practical expedients that must be elected as a package, which

permit the Company to not reassess, under the new standard, prior conclusions about (1) lease identification, (2) lease classification

and (3) initial direct costs.

Additionally, the Company elected a short-term lease exception policy, which allows entities to not apply

Topic 842 to short-term leases (i.e.

leases with terms of 12 months or less) and a hindsight policy, which allows an entity to include

current considerations for existing leases when determining initial lease terms.

The Company has also elected to account for lease and

non-lease components as a single component for all leases and elected to utilize an IBR (incremental borrowing rate) that equals the risk

free rate plus premium for all leases when calculating the lease liability.

(i) Common stock purchase warrants

The Company also analyzed

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expired during the year ended December 31, 2024.

As of December 31, 2024

and 2023, the Company recorded nil and $ 378,371 common stock purchase warrant liability, respectively, and $ 378,371 gain and $$ 121,413

loss on changes of fair value of common stock purchase warrant liability for the year ended December 31, 2024 and 2023, respectively.

(i) Fair value of financial instruments

The Company recorded

$ 378,371 gain on changes of fair value of common stock purchase warrant liability for the year ended December 31, 2024.

(j) Fair value of financial instruments

Fair value is defined as the price that would

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nature of the assets and liabilities.

(j) Fair value measurement

(k) Fair value measurement

Fair value is the price that would be received

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rates and currency rates.

(k) Impairment of long-lived Assets

(l) Impairment of long-lived Assets

Long-lived assets, such as property, plant and

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no longer depreciated.

There was nil impairment of intangible assets recognized for the years ended December 31, 2024 and 2023.

(l) Foreign Currency Translation

There was $ 175,426 and nil impairment of construction in progress recognized for the years ended December 31, 2025

and 2024, respectively.

(m) Foreign Currency Translation

The Company uses US dollars as the reporting currency.

11 unchanged sentences

During the years ended December 31, 2025 and 2024, the Company recorded

gains of $ 52,211 and $ 230,844 on foreign currency transactions in the line of general & administration expenses, respectively.

loss of $ 54,626 and gain of $ 52,211 on foreign currency transactions in the line of general & administration expenses, respectively.

The RMB is not freely convertible into foreign

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US$ 1 =RMB 7.1957

(m) Revenue Recognition

(n) Revenue Recognition

The Company adopted Accounting Standards Codification

56 unchanged sentences

in Note 15 to the financial statements .

(n) Selling, General and Administrative

(o) Selling, General and Administrative

Selling expenses represents

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and amortization of office facilities, professional fees and other administrative expenses.

The Company adopts ASU

2016-02, Leases (Topic 842) (“ASU 2016-02”) for all periods presented.

The Company elects the short-term lease exemption

for all contracts with lease terms of 12 months or less.

Under the guidance of AUS 2016-02, an entity is

required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements.

The Company’s lease

terms include options to renew or terminate the lease when it is reasonably certain that it will exercise the option.

The Company determines

if a contract contains a lease based on whether it has the right to obtain substantially all of the economic benefits from the use of

an identified asset which the Company does not own and whether it has the right to direct the use of an identified asset in exchange for

consideration.

Right of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term

and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

ROU assets are recognized

as the amount of the lease liability, adjusted for lease incentives received.

Lease liabilities are recognized at the present value of

the future lease payments at the lease commencement date.

The interest rate used to determine the present value of the future lease payments

is the Company’s incremental borrowing rate (“IBR”), because the interest rate implicit in most of the Company’s

leases is not readily determinable.

The IBR is a hypothetical rate based on the Company’s understanding of what its credit rating

would be to borrow and resulting interest the Company would pay to borrow an amount equal to the lease payments in a similar economic

environment over the lease term on a collateralized basis.

Lease payments may be fixed or variable, however, only fixed payments or in-substance

fixed payments are included in the Company’s lease liability calculation.

Variable lease payments are recognized in operating expenses

in the period in which the obligation for those payments is incurred.

The lease right-of-use assets are initially measured

at the carrying amount of the lease liability and adjusted for any prepaid or accrued lease payments, remaining balance of lease incentives

received, unamortized initial direct costs, or impairment charges relating to the right-of-use-asset.

Lease expense for minimum lease

payments exclusive of the value-added tax are recognized on straight-line basis over the lease term The new standard provides a number

of optional practical expedients at transition.

The Company elected certain practical expedients that must be elected as a package, which

permit the Company to not reassess, under the new standard, prior conclusions about (1) lease identification, (2) lease classification

and (3) initial direct costs.

Additionally, the Company elected a short-term lease exception policy, which allows entities to not apply

Topic 842 to short-term leases (i.e.

leases with terms of 12 months or less) and a hindsight policy, which allows an entity to include

current considerations for existing leases when determining initial lease terms.

The Company has also elected to account for lease and

non-lease components as a single component for all leases, and elected to utilize an IBR (incremental borrowing rate) that is risk free

rate plus premium for all leases when calculating the lease liability.

(p) Share-Based Compensation

(p) Segment reporting

In accordance with ASC 280, Segment Reporting,

operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated

regularly by the chief operating decision maker (“CODM”) or decision-making group, in deciding how to allocate resources

and in assessing performance.

The Company evaluated its portfolio of service to determine whether certain services exhibit similar characteristics,

such that they should be grouped together in the Company’s disclosure.

The Company derives revenue primarily from selling various

touchscreens to customers and the products have similar economic characteristics with respect to raw materials, vendors, marketing and

promotions, customers and methods of distribution.

The Company’s chief operating decision maker (“CODM”) has been identified

as the Chief Executive Officer (“CEO”), who reviews consolidated results when making decisions about allocating resources

and assessing performance of the Company.

The CODM confers regularly to review trends in operating metrics, revisit, assess, and adjust

significant strategic and operational matters, and make resource adjustments as needed.

These discussions include exploring opportunities

for responding immediately and effectively to operational adjustments, aligning ongoing business activities with corporate-level objectives,

improving customer satisfaction, and enhancing corporate culture, among other management concerns.

The primary measure of segment revenue

and profitability for the Company’s operating segment is considered to be consolidated revenue and net income.

Certain financial

information, such as revenue, can be disaggregated, whereas cost of revenues, selling and marketing expenses, general and administrative

expenses, research and development expenses and other income (expenses), are mixed and not disaggregated.

Hence, with respect to costs

of revenues and operating expenses and other income (expenses), no discrete financial information beyond the consolidated results is

prepared and presented to the CODM.

As all of the Company’s assets are all located

in the PRC, no geographical segment information of assets is presented.

The CODM does not review any information regarding total assets

on a reportable segment basis.

Through the evaluation, the CODM determined that the Company has only one reporting segment.

(q) Share-Based Compensation

The Company awards share options and other equity-based

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vested at that date.

(q) Income taxes

The Company accounts for income taxes in accordance

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tax liabilities, and cash taxes.

(r) Value added tax (“VAT”)

(s) Value added tax (“VAT”)

Sales revenue represents the invoiced value of

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sales price, but the VAT related to purchasing raw materials is refunded after the export is completed.

(s) Earnings per Share

(t) Earnings per Share

The Company computes earnings per share (“EPS”)

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As of December 31, 2025 and 2024, warrants were included for the dilutive EPS calculation, respectively.

(t) Comprehensive income (loss)

(u) Comprehensive income (loss)

Comprehensive income (loss) consists of two components,

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statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of income and comprehensive

(u) 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.

Recently issued accounting pronouncements

not yet adopted

In March 2020, the FASB issued

2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting”,

which provides optional expedients and exceptions for applying U.S.

GAAP on contract modifications and hedge accounting to contracts,

hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference

rate reform, if certain criteria are met.

These optional expedients and exceptions provided in ASU No.

2020-04 are effective for the Company

as of March 12, 2020 through December 31, 2022.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

of the Sunset Date of Topic 848 (“ASU 2022-06”), which deferred the application dates of Topic 848 to December 31, 2024.

Company currently does not have any financial instrument that reference to LIBOR and does not anticipate the adoption will have a material

impact to the Company’s combined and consolidated financial statements.

In November 2023, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 (ASC Topic 280), Improvements

to Reportable Segment Disclosures.

This ASU expands on existing reportable segment disclosure requirements primarily through enhanced

disclosures about significant segment expenses.

This ASU is effective for our annual reporting for 2025 on a retrospective basis.

standard will impact our disclosures and will not impact our financial statements.

In December 2023, the FASB

issued ASU No.

2023-09, Improvements to Income Tax Disclosures (Topic 740).

The ASU requires disaggregated information about a reporting

entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

The ASU is effective on a prospective

basis for annual periods beginning after December 15, 2024.

Early adoption is also permitted for annual financial statements that have

not yet been issued or made available for issuance.

The Company is evaluating this ASU and expects to add additional disclosures to our

combined and consolidated financial statements, once adopted.

NOTE-3 — ACCOUNTS

Accounts receivable and

credit losses consists of the following:

(v) Recent accounting pronouncements

In October 2023, the FASB issued Accounting Standards

Update (“ASU”) 2023-06, Disclosure Improvements—codification amendments in response to SEC’s disclosure Update

and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash

Flows—Overall, 250-10 Accounting Changes and Error Corrections—Overall, 260-10 Earnings Per Share—Overall, 270-10 Interim

Reporting—Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives

and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities—Oil

and Gas—Notes to Financial Statements, 946-20 Financial Services—Investment Companies—Investment Company Activities,

and 974-10 Real Estate—Real Estate Investment Trusts—Overall.

The amendments represent changes to clarify or improve disclosure

and presentation requirements of above subtopics.

Many of the amendments allow users to more easily compare entities subject to the SEC’s

existing disclosures with those entities that were not previously subject to the SEC’s requirements.

Also, the amendments align

the requirements in the Codification with the SEC’s regulations.

For entities subject to existing SEC disclosure requirements or

those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective

date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K.

Early adoption is not allowed.

For all other entities, the amendments will be effective two years later from the date of the SEC’s removal.

ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , establishes incremental disaggregation of income tax disclosures pertaining to the effective

tax rate reconciliation and income taxes paid.

This standard is effective for fiscal years beginning after December 15, 2024, and requires

prospective application with the option to apply it retrospectively.

The Company adopted ASU 2023-09 beginning January 1, 2025.

did not have a material impact on the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03,

“Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income

Statement Expenses,” requiring public entities to disclose additional information about specific expense categories in the notes

to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026,

and for interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact

of adopting ASU 2024-03.

Management does not believe that any other recently

issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s consolidated

financial statements.

NOTE 3 — ACCOUNTS RECEIVABLE

The Company’s accounts receivable primarily

includes balance due from customers when the Company’s products are sold and delivered to customers.

Accounts receivable

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Accounts receivable, net

The Company’s accounts receivable primarily

includes balance due from customers when the Company’s products are sold and delivered to customers.

A movement of credit

losses were as following:

For the Years Ended

Balance at beginning of period

Allowance for the year

Balance at end of Year

The following table provides

an analysis of the aging of accounts receivable as of December 31, 2024 and 2023:

an analysis of the aging of accounts receivable as of December 31, 2025 and December 31, 2024:

1-3 months past due

4-6 months past due

6-12 months past due

Total accounts receivable

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Advance to suppliers

Issuance cost related to convertible promissory notes

Prepayment for land use right (i)

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Prepaid market research fees (iv)

Others receivable (v)

Tax receivable (v)

Others receivable (vi)

Prepaid expenses and other current assets

July 23, 2021, Sichuan Vtouch entered into a contract with Chengdu Wenjiang District Planning and Natural Resources Bureau

for the purchase of a land use right of a parcel of land of 131,010 square feet for a consideration of RMB 3,925,233 (equivalent to $ 537,755 )

for the Company’s new facility.

(i) On August 6, 2021, Sichuan Vtouch entered into a contract with Chengdu Wenjiang District Planning and Natural Resources Bureau for the purchase of a land use right of a parcel of land of 131,010 square feet for a consideration of RMB 3,925,234 (equivalent to $ 561,301 ) for the Company’s new facility.

The Company paid the consideration in full by November 18, 2021.

Upon issuance of a certificate

of land use right by the local government, which is estimated to be obtained by the second half of 2026, the Company will reclassify

this prepayment to intangible assets accordingly.

Upon issuance of a certificate of land use right by the local government, which is estimated to be obtained by the first half of 2027.

As the construction is approaching the end, management assessed the certainty of the such a title, accordingly reclassified this prepayment to land use right during the years ended December 31, 2025.

(ii) On July 28, 2021, Sichuan Vtouch made a security deposit of RMB 393,000 (equivalent to $ 56,198 ) to Chengdu Cross-Strait Science and Technology Industry Development Park Management Committee to obtain a construction license for its new facility.

This deposit will be refunded upon the issuance of the construction license, which is expected to be by the second half of 2025.

This deposit will be refunded upon the completion of the new facility.

(iii) In May 2023, the Company entered into two third-party consulting service agreements for a fee of $ 1.35 million and $ 3.05 million, respectively, for the three-year consulting services.

The total fee would be amortized over the three-year services and reclassified to stock issuance costs accordingly.

As of December 31, 2024, $ 884,687 was recognized as prepaid consulting service fees within one year.

As of December 31, 2025, the Company this prepaid consulting service fees has been amortized in full.

(iv) On February 29, 2024, the Company advanced market research fees $ 70,000 and $ 855,000 , respectively, to two unrelated individuals, Mr.

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Those contracts were issued to the Company to evidence the advances, bearing 3.45 % interest per annum, and payable on February 28, 2025, and extended till August 29, 2026.

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

(v) Tax receivable mainly include prepaid corporate income tax and value-added tax (VAT) refundable.

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

NOTE 5 — PROPERTY, PLANT AND EQUIPMENT,

4 unchanged sentences

Depreciation expense was $ 5,656 and $ 9,805 for

the year ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, the Company had

commitment of RMB 5.0 million (equivalent to $ 0.7 million) for construction in progress of our new facility.

the years ended December 31, 2025 and 2024, respectively.

There was $ 175,426 and nil impairment of construction

in progress recognized for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the Company had commitment

of RMB 7.3 million (equivalent to $ 1.05 million) for construction in progress of our new facility.

NOTE 6 — OPERATING LEASE

2 unchanged sentences

from a parcel of state-owned land where we maintained our executive offices, research and development facilities and factories.

received a total amount of RMB 115.2 million (approximately $ 17.7 million) from the local government (see ITEM 2.

PROPERTIES AND FACILITIES)

to start the construction of the new facility in a neighboring Chengdu Wenjiang District.

received a total amount of RMB 115.2 million (approximately $ 16.5 million) from the local government to start the construction of the new

facility in a neighboring Chengdu Wenjiang District.

On March 16, 2021, in order to minimize interruption

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April 1, 2021 until December 31, 2021 at a monthly rent of RMB 300,000 ($ 42,899 ), which period was extended to October 31, 2022.

was renewed on October 30, 2022, October 30, 2023 and August 9, 2024, respectively , with a monthly rent of RMB 400,000 ($ 54,800 ), the

term of which has been extended to October 31, 2025 for the use of the Demised Properties.

The Company’s new facility started in August

2021 yet was delayed and suspended due to the outbreak of Covid-19 and government-ordered shutdowns in China.

The Company has rescheduled

and extended the completion by end of December 31, 2025 with the production at the new facilities will commencing in the second quarter

For the year ended December 31, 2024, management makes estimates and assumptions to use the leasing property till the end of

October 2026, and applies ASU 2016-02 “Leases (Topic 842) as practical expedients during the year ended December 31, 2024.

was renewed on October 30, 2022, October 30, 2023, August 9, 2024 and September 29, 2025, respectively , with a monthly rent of RMB 400,000

($ 57,199 ), the term of which has been extended to October 31, 2026 for the use of the Demised Properties.

Management makes estimates and assumptions to

use the leasing property till the end of October 2026, and applies ASU 2016-02 “Leases (Topic 842) as practical expedients during

the years ended December 31, 2025.

Both operating lease expense and short-term lease

expense are recognized in cost of revenues and general and administrative expenses.

The components of lease

expense for the years ended December 31, 2024 and 2023 were as follows:

The lease expense for

the years ended December 31, 2025 and 2024 was as follows:

For the Years Ended

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Company is the lessee are presented as follows:

As of December 31,

Operating lease right-of-use assets

2 unchanged sentences

Total operating lease liabilities

The following is a schedule, by years, of

maturities of lease liabilities as of December 31, 2024:

The following is a schedule, by years, of maturities

of lease liabilities as of December 31, 2025:

2026 lease payment

8 unchanged sentences

Supplemental cash flow

information related to leases where the Company was the lessee for the year ended December 31, 2024 was as follows:

For the Years ended

Cash payments for operating leases

information related to leases where the Company was the lessee for the years ended December 31,2025 and 2024 was as follows:

For the Years Ended December 31,

Cash payments for operating lease

Lease liabilities arising from obtaining right-of-use assets

NOTE 7 — LONG-TERM PREPAYMENT

Prepaid equipment

Prepaid construction in progress

Total long-term prepayment

In 2021, for the purpose of construction of our

new facility ( NOTE 5 — PROPERTY, PLANT AND EQUIPMENT, NET ), the Company prepaid equipment of RMB 225,000 (equivalent to $ 32,174 )

to an external equipment provider, and prepaid construction in progress of RMB 20,319,674 (equivalent to $ 2,905,675 ) and RMB 11,001,014

(equivalent to $ 1,573,124 ) to two third party constructors.

Due to the delayed of construction work incomplete, the Company reclassified

the above amount to long-term prepayment.

Upon the completion of the new facility, the management will reclass them to property, plant

and equipment.

NOTE 8 — RELATED PARTY TRANSACTIONS

Amounts due to a related

party are as follows:

due to a related party were as follows :

Relationship December 31,

1 unchanged sentence

Chengdu Wetouch Intelligent Optoelectronics Co., Ltd.

Affiliate of Ms.

Jiaying Cai, director of the Company $ 149,211 $ -

Payable to affiliate for expenses paid on behalf of the Company

An affiliate of Ms.

Jiaying Cai, niece of the Mr.

Guangrong Cai, Chairman of the Company $ 286,311 $ 149,211 Payable to affiliate for expenses paid on behalf of the Company

Total $ 286,311 $ 149,211

Chengdu Wetouch Intelligent Optoelectronics Co.,

Ltd., was incorporated on January 28, 2021 in Chengdu, Sichuan Province under the laws of PRC, with Ms.

Jiaying Cai, our former director

and secretary of the Company, and the niece of Mr.

Guangrong Cai, the Chairman of the Company, as its sole shareholder holding 100 % of

its equity interests.

NOTE 9 — INCOME TAXES

Wetouch is subject to a tax rate of 21 % per beginning

2018, and files a U.S.

Wetouch is subject to a tax rate of 21 % per year

beginning 2018, and files a U.S.

federal income tax return.

2 unchanged sentences

In addition, no British Virgin

Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders.

Islands withholding tax will be imposed upon the payment of dividends by the Company to its stockholders.

HK Wetouch is subject to profit taxes in Hong

5 unchanged sentences

Under PRC CIT Law, domestic enterprises and foreign

investment enterprises (the “FIEs”) are usually subject to a unified 25 % enterprise income tax rate while preferential tax

rates, tax holidays and even tax exemption may be granted on a case-by-case basis by local government as preferential tax treatment to

High and New Technology Enterprises (the “HNTEs”).

Under this preferential tax treatment, HNTEs are entitled to an income

tax rate of 15 %, subject to a requirement that they re-apply for their HNTE status every three years.

Pursuant to an approval from the

local tax authority in October 2017, Sichuan Wetouch became a qualified enterprise located in the western region of the PRC, entitled

it to a preferential income tax rate of 15 % from October 11, 2017 to October 11, 2020.

On October 21, 2020, Sichuan Wetouch was granted

on a case-by-case basis by Sichuan Provincial government as an HNTE , entitled to a reduced income tax rate of 15 % from October 21, 2020

until October 20, 2023.

Sichuan Vtouch is subject to a 25 % income tax

investment enterprises (the “FIEs”) are usually subject to a unified 25 % enterprise income tax rate.

The Company’s PRC

subsidiary Sichuan Vtouch is subject to a 25 % income tax rate.

The CIT Law and its implementation rules impose

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The Company’s provision

for income taxes credit (expenses) consisted of:

for income taxes expenses consisted of:

For the Years Ended

PRC income tax

Income tax provision

Deferred income tax expenses (credit)

PRC tax provision

Income tax provision

The following table reconciles the PRC statutory

rates to the Company’s effective tax rate for the years ended December 31, 2024 and 2023:

Deferred income tax expenses

United States

British Virgin Islands

Total income tax provision

The following table reconciles

the PRC statutory rates to the Company’s effective tax rate for the years ended December 31, 2025 and 2024:

For the Years Ended

2 unchanged sentences

Tax rate differential on entities not subject to PRC income

R&D additional deduction

Change in valuation allowance

2 unchanged sentences

Effective tax rate

A reconciliation of the

provision for income taxes determined at the statutory income tax rate to the Company’s income taxes is as follows:

A reconciliation of the provision for income taxes

determined at the statutory income tax rate to the Company’s income taxes is as follows:

For the Years Ended

3 unchanged sentences

Tax rate differential on entities not subject to PRC income tax

R&D additional deduction

Change in valuation allowance

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Deferred tax assets:

Credit loss on advance to vendors

Allowance for credit losses

Provision of obsolete inventory

Impairment of construction in progress

Leasing liabilities

8 unchanged sentences

of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

As of December 31, 2024 and 2023, taxes

for Sichuan Vtouch remained open for statutory examination by PRC tax authorities.

NOTE 9— ACCRUED EXPENSES AND OTHER CURRENT

As of December 31, 2025 and December 31,

2024, taxes for Sichuan Vtouch remained open for statutory examination by PRC tax authorities.

NOTE 10 — ACCRUED EXPENSES AND OTHER

CURRENT LIABILITIES

Accrued expenses and other current liabilities

2 unchanged sentences

Accrued payroll and employee benefits

Accrued interest expenses

Accrued private placement agent fees (i)

Accrued consulting fees (ii)

Accrued legal compensation charges (iii)

Accrued legal compensation charges

Accrued professional fees

Accrued director fees

Other payable

Other tax payables (iv)

Other payable to third parties

Other tax payables (i)

Accrued expenses and other current liabilities

March 18, 2023, the Company entered into a private placement consent agreement with a third-party investment bank firm on the agent fees

of $ 1.2 million, payable only on the completion of the private placement.

The Company made the full payment in February 2024.

(ii) In May 2023, the Company

entered into two third-party consulting service agreements for a fee of $ 1.35 million and $ 3.1 million, respectively.

made the full payment in February 2024.

Due to the service of three-year term, Upon the closing of the 2024 Public

Offering ( as defined in Note 1 ), $ 316,378 was charged to additional paid-in capital as the closing cost of the

2024 Public Offering, and the remaining was recognized as consulting service fee over the service period.

Company recorded $ 1,370,972 as consulting service fee for the year ended December 31, 2024.

of December 31, 2024, the Company accrued litigation compensation charges of RMB 258,075 ($ 35,356 ).

tax payable mainly represent value added tax payable.

mainly represent accrued employee reimbursement payable and other accrued miscellaneous operating expenses.

CONVERTIBLE PROMISSORY NOTES PAYABLE

(i) Other tax payable mainly represent value added tax payable.

(ii) Others mainly represent accrued employee reimbursement payable and other accrued miscellaneous operating expenses.

NOTE 11 — CONVERTIBLE

PROMISSORY NOTES PAYABLE

a) Convertible promissory

2 unchanged sentences

of $ 2,250,000 , due in one year with discounted issuance price at 90.0 %.

The Notes bore interest at a rate of 8.0 % per annum,

payable in one year and matured on October 27, November 5, November 16, November 29, and December 2, 2022, respectively.

after debt issuance costs and debt discounts were approximately $ 1,793,000 .

Debt issuance costs in the amount of $ 162,000 are recorded

as deferred charges and included in the other current assets on the consolidated balance sheet.

The debt discount and debt issuance costs

are amortized into interest expense using the effective interest method over the terms of the Notes.

Unless the Notes

are converted, the principal amounts of the Notes, and accrued interest at the rate of 8 % per annum, are payable on the one-year anniversary

The Notes bore interest at a rate of 8.0 % per annum, payable in

one year and matured on October 27, November 5, November 16, November 29, and December 2, 2022, respectively.

Net proceeds after debt

issuance costs and debt discounts were approximately $ 1,793,000 .

Debt issuance costs in the amount of $ 162,000 are recorded as deferred

charges and included in the other current assets on the consolidated balance sheet.

The debt discount and debt issuance costs are amortized

into interest expense using the effective interest method over the terms of the Notes.

Unless the Notes are

converted, the principal amounts of the Notes, and accrued interest at the rate of 8 % per annum, are payable on the one-year anniversary

of the issuance of the Notes (the “Maturity Date”).

12 unchanged sentences

than the conversion price of the Notes, the conversion rate of the Notes shall be reduced to such lower price.

Until the Notes

are either paid or converted in their entirety, the Company agreed with the Lenders not to sell any securities convertible into shares

of common stock of the Company (i) at a conversion price that is based on the trading price of the stock or (ii) with a conversion price

that is subject to being reset at a future date or upon an event directly or indirectly related to the business of the Company or the

market for the common stock.

Until the Notes are either

paid or converted in their entirety, the Company agreed with the Lenders not to sell any securities convertible into shares of common

stock of the Company (i) at a conversion price that is based on the trading price of the stock or (ii) with a conversion price that is

subject to being reset at a future date or upon an event directly or indirectly related to the business of the Company or the market for

the common stock.

The Company also agreed to not issue securities at a future determined price.

The Lenders have

the right to require the Company to repay the Notes if the Company receives cash proceeds, including proceeds from customers and the issuance

The Lenders have the

right to require the Company to repay the Notes if the Company receives cash proceeds, including proceeds from customers and the issuance

of equity (including in the Uplist Offering).

2 unchanged sentences

From December 28, 2022

2022 to April 6, 2023, the lenders of five outstanding Notes and the Company entered into an amendment to the Notes (“Amendment

to April 6, 2023, the lenders of five outstanding Notes and the Company entered into an amendment to the Notes (“Amendment No.

to Promissory Note”) extending the term of the Notes for an additional 6 months.

From August 29

to September 9, 2023, the lenders of the outstanding Notes and the Company entered into an amendment to the Notes (“Amendment No.

2 to Promissory Note”) that upon the listing of the Company’s common stock on the Nasdaq Capital Market (the “Uplist”),

the Company shall within three (3) business days after the Uplist, pay to the Holders amounts equal to 105 % of the total outstanding balance

of the Convertible Debenture .

From August 29 to September

9, 2023, the lenders of the outstanding Notes and the Company entered into an amendment to the Notes (“Amendment No.

2 to Promissory

Note”) that upon the listing of the Company’s common stock on the Nasdaq Capital Market (the “Uplist”), the Company

shall within three (3) business days after the Uplist, pay to the Holders amounts equal to 105% of the total outstanding balance of the

Convertible Debenture .

During the year ended

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

During the year

ended December 31, 2023, principal, accrued and unpaid interest and default charges totaling $ 1,038,426 were converted into 69,228 shares

of common stock of the Company.

During the year ended

December 31, 2023, principal, accrued and unpaid interest and default charges totaling $ 1,038,426 were converted into 69,228 shares of

common stock of the Company.

Two notes were fully converted.

On February 23, 2024, immediately upon the closing of the 2024 Public

Offering, the Company made a full payment of $ 2,586,960 under the remaining five outstanding promissory notes, including the principal

of $ 1,400,750 and the related accrued interests and default charges of $ 1,186,210 .

During the years ended December 31, 2024 and 2023,

amortization of discounts and issuance cost of the notes were $ 5,715 and $ 33,655 , respectively.

years ended December 31 , 2024 and 2023, the Company recognized interest expenses of

the Notes in the amount of $ 1,169,974 and $ 252,325 , respectively.

On February 23, 2024,

immediately upon the closing of the 2024 Public Offering, the Company made a full payment of $ 2,586,960 under the remaining five outstanding

promissory notes, including the principal of $ 1,400,750 and the related accrued interests and default charges of $ 1,186,210 .

no convertible promissory notes as of February 23, 2024.

During the years ended December 31, 2024, amortization of discounts

and issuance cost of the notes were $ 5,715 .

the years ended December 31 , 2024, the Company recognized interest expenses of the Notes in the amount $ 1,169,974

respectively.

Accounting for

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equal to the total exercise price prior to such adjustment.

The lenders have

the right to exercise the Note Warrants on a cashless basis if the highest traded price of a share of common stock of the Company during

the 150 trading days prior to exercise of the Note Warrants exceeds the exercise price, unless there is an effective registration statement

The lenders have the

right to exercise the Note Warrants on a cashless basis if the highest traded price of a share of common stock of the Company during the

150 trading days prior to exercise of the Note Warrants exceeds the exercise price, unless there is an effective registration statement

of the Company which covers the resale of the Lenders.

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exercise unless such lender notifies the Company at least 61 days prior to such exercise.

During the year

ended December 31, 2023, two lenders exercised the Note Warrants cashlessly for 22,338 shares of common stock of the Company.

During the year

ended December 31, 2024, one lender exercised the Note Warrants cashlessly for 2,725 shares of common stock of the Company.

As of December 31, 2024, the remaining Note

Warrants of 34,028 were expired and the Company recorded $ 378,371 gain on changes in the fair value of common stock purchase warrants

liability using the Black-Scholes option-pricing model.

During the year ended

December 31, 2023, two lenders exercised the Note Warrants cashlessly for 22,338 shares of common stock of the Company.

During thethe years ended December 31, 2024, one

lender exercised the Note Warrants cashlessly for 2,725 shares of common stock.

As the Note Warrant was issued in 2021 and was

valid for three years, the remaining 38430 Note Warrants expired during the year ended December 31, 2024.

During the year ended December 31, 2024, the Company

recorded $ 378,371 gain on changes in the fair value of common stock purchase warrants liability using the Black-Scholes option-pricing

Rights Agreements

Pursuant to the

terms of the Registration Rights Agreements between the Company and lenders of the Notes, the Company agreed to file a registration statement

Pursuant to the terms

of the Registration Rights Agreements between the Company and lenders of the Notes, the Company agreed to file a registration statement

with the Securities and Exchange Commission to register the shares of common stock underlying the Notes and the shares issuable upon exercise

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The Company’s authorized shares of common

stock was 15,000,000 shares with par value of $0.001as of the date of this annual report.

stock was 15,000,000 shares with par value of $ 0.001 .

On December 22, 2020, the Company issued 5,181

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On January 20, 2023, the Company received net proceeds of $ 40 million accordingly.

During the year ended December 31, 2023, the Company issued 25,000

shares of common stock upon conversion of convertible promissory note payable (see note 9 (a)).During the year ended December 31, 2023,

the Company issued 22,338 shares of common stock to two third parties upon exercise of warrants (see Note 9(b)).

During the year ended December 31, 2023, the Company

issued 25,000 shares of common stock upon conversion of convertible promissory note payable (see Note 11(a)).

During the year ended December 31, 2023, the Company

issued 22,338 shares of common stock to two third parties upon exercise of warrants (see Note 11 (b)).

20, 2024, the Company issued 2,160,000 shares of common stock at a public offering price of $ 5.00 per share.

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stock began trading on the Nasdaq Capital Market under the ticker symbol “WETH” on February 21, 2024.

date of this Annual Report , there were 11,931,534 shares of common stock issued and outstanding .

As of December 31, 2025, there

were 11,931,534 shares of common stock issued and outstanding.

2) Reverse Stock Split

On February 17, 2023, the Company’s

board of directors authorized a reverse stock split of common stock with a ratio of not less than one to five (1:5) and not more than

one to eighty (1:80), with the exact amount and the timing of the reverse stock split to be determined by the Chairman of the Board.

effectiveness of such reverse stock split, the number of authorized shares of the common stock of the Company will also be decreased in

the same ratio.

Pursuant to Section 78.209 of the Nevada Revised Statutes, the reverse stock split does not have to be approved by the

stockholders of the Company.

On February 17, 2023, the Company’s board

of directors authorized a reverse stock split of common stock with a ratio of not less than one to five (1:5) and not more than one to

eighty (1:80), with the exact amount and the timing of the reverse stock split to be determined by the Chairman of the Board.

Upon effectiveness

of such reverse stock split, the number of authorized shares of the common stock of the Company will also be decreased in the same ratio.

Pursuant to Section 78.209 of the Nevada Revised Statutes, the reverse stock split does not have to be approved by the stockholders of

On July 16, 2023, the Company’s board of

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Staff Accounting Bulletin Topic 5A, “Expenses of Offering”, and charged issuance costs of $ 1,810,246 to additional paid-in

capital during the year ended December 31, 2024.

capital during thethe years ended December 31, 2024.

3) Statutory Reserve and Restricted Net

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be used for general business expansion and production or increase in registered capital, but are not distributable as cash dividends.

For the years ended December

31, 2024 and 2023, the Company made appropriations to the reserve fund of RMB 6,324,130 (equivalent to US$ 878,876 ) and RMB 8,172,303 (equivalent

to US$ 1,154,131 ), respectively.

As of December 31, 2025

and December 31, 2024, the Company had reserve fund of US$ 8,073,968 and US$ 8,073,968 , respectively.

NOTE 13 — SHARE BASED COMPENSATION

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On December 22, 2020,

2020, the board of directors of the Company authorized the issuance of an aggregate of 5,181 shares and warrants to purchase an aggregate

of 10,518 shares of common stock to The Crone Law Group, P.C.

the board of directors of the Company authorized the issuance of an aggregate of 5,181 shares and warrants to purchase an aggregate of

10,518 shares of common stock to The Crone Law Group, P.C.

or its designees for legal services that had been rendered.

The five-year

warrants are exercisable at one cent per share.

5,181 shares of

common stock underlying such warrants were vested on December 22, 2020 and 6,211 shares were issued upon exercise of these warrants on

September 21, 2022 and warrant to purchase 4,307 shares remained outstanding for The Crone law Group, P.C.

or its designees for legal

The five-year warrants

are exercisable at one cent per share.

5,181 shares of common

stock underlying such warrants were vested on December 22, 2020 and 6,211 shares were issued upon exercise of these warrants on September

21, 2022 and warrant to purchase 4,307 shares remained outstanding for The Crone Law Group, P.C.

or its designees for legal services.

The fair value of above award was estimated at the grant date using Black-Scholes model for pricing the share compensation expenses.

The fair value of the Black-Scholes model includes the following assumptions:

expected life of 2.5 years, expected dividend rate of 0 %,

volatility of 43.5 % and an average interest rate of 0.11 %.

On January 1, 2021,

the board of directors of the Company authorized the issuance of an aggregate of 15,541 shares and warrants to purchase 31,554 shares

of common stock to a third party service provider for consulting services that had been rendered.

These warrants have a five-year term

and are exercisable at one cent per share.

fair value of the Black-Scholes model includes the following assumptions:

expected life of 2.5 years, expected dividend rate of 0 %, volatility

of 43.5 % and an average interest rate of 0.11 %.

On January 1, 2021, the

board of directors of the Company authorized the issuance of an aggregate of 15,541 shares and warrants to purchase 31,554 shares of common

stock to a third party service provider for consulting services that had been rendered.

These warrants have a five-year term and are exercisable

at one cent per share.

The 15,541 shares of common stock and warrants

to purchase 31,554 shares of commons stock vested on January 1, 2021.

The fair value of the above warrants was

estimated at the grant date using Black-Scholes model for pricing the share compensation expenses.

The fair value of the Black-Scholes

model includes the following assumptions:

expected life of 2.5 years, expected dividend rate of 0 %, volatility of 51.3 % and an average

interest rate of 0.12 %.

During the year ended December 31, 2024,

warrants for 35,861 shares of common stock related to above mentioned services were exercised.

There were no warrants related to services

remaining as of December 31, 2024.

As of December 31, 2024 and 2023, the Company

recognized relevant share-based compensation expense of nil and nil for the vested shares, and nil and nil for the warrants, respectively.

WEIGHTED AVERAGE NUMBER OF SHARES

to purchase 31,554 shares of common stock vested on January 1, 2021.

The fair value of the above warrants was estimated

at the grant date using Black-Scholes model for pricing the share compensation expenses.

The fair value of the Black-Scholes model includes

the following assumptions:

expected life of 2.5 years, expected dividend rate of 0 %, volatility of 51.3 % and an average interest rate

During the years ended December 31, 2024, warrants

for 35,861 shares of common stock related to above mentioned services were exercised.

There were no warrants related to services remaining

as of December 31, 2024.

As of December 31, 2024, the Company recognized

relevant share-based compensation expense of nil for the vested shares, and nil for the warrants, respectively.

NOTE 14 — WEIGHTED AVERAGE NUMBER OF SHARES

In October 2020, the Company entered into a reverse

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the actual number of shares of common stock of the legal acquirer (the accounting acquiree) outstanding during that period.

NOTE 14 — RISKS AND

UNCERTAINTIES

NOTE 15 — RISKS AND UNCERTAINTIES

Credit Risk – The carrying

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respectively, of the Company’s revenue.

For the year ended December 31, 2023, six customers accounted for 22.5 %, 16.5 %, 15.6 %, 14.1 %,

For the year ended December 31, 2024, five customers accounted for 22.0 %, 19.1 %, 15.3 %,

14.5 %, and 11.5 %, respectively, of the Company’s revenue.

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accounted for 99.7 % and 99.3 % of the total revenue for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2024, five customers accounted

for 26.6 %, 24.5 %, 12.0 %, 11.4 % and 10.8 % of the total accounts receivable balance, respectively.

As of December 31, 2025, four customers accounted

for 42.6 %, 14.9 %, 13.3 %, and 12.9 % of the total accounts receivable balance, respectively.

As of December 31, 2024, five customers accounted

for 26.7 %, 24.6 %, 12.1 %, 11.4 % and 10.9 % of the total accounts receivable balance, respectively.

The Company purchases its raw materials through

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Raw material purchases from these suppliers which individually exceeded 10% of the Company’s total raw material

purchases, accounted for approximately 15.5 %, 12.2 % and 11.5 % (three customers) and 13.3 % (one supplier) of the Company’s total

raw material purchases for the year ended December 31, 2024 and 2023, respectively.

purchases, accounted for approximately 46.1 % (four suppliers) and 39.1 % (three suppliers) of the Company’s total raw material purchases

for the years ended December 31, 2025 and 2024, respectively.

NOTE 16 — COMMITMENTS AND CONTINGENCIES

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time and attention.

As of the date of this Report, we are not aware

of any material, active, pending or threatened to which the Company or any of its subsidiaries is a party, or to which any of their property

As of the date of this Annual Report, we are not

aware of any material, active, pending or threatened to which the Company or any of its subsidiaries is a party, or to which any of their

property is subject.

ii) Capital Expenditure Commitment

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touch screen business.

The Company primarily operates in People’s Republic of China

The Company primarily operates in People’s

Republic of China (“PRC”).

and substantially all of the Company’s long-lived assets are located in the PRC.

1) The Company’s geographical revenue information is set

1) The Company’s geographical revenue information is set forth below:

For the Years Ended

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Provision of obsolete inventory

(Gain) loss on changes in fair value of common stock purchase warrants liability.

Impairment of construction in progress

(Gain) on changes in fair value of common stock purchase warrants liability.

Amortization of discounts and issue cost of the notes

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Interest expense

Charges of contract default penalty expense

Income tax expense

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$ 128,019,463

* Other segment items include remaining selling expense, general

and administration expenses, research & development, and interest income.

NOTE 18 — SUBSEQUENT EVENTS

On April 11, 2025, Sichuan Vtouch entered into

a supplemental construction contract with Sichuan Chunqiu Development & Construction Group Co.

for a total consideration of RMB 4,633,118

(equivalent to $ 0.6 million) for completion of the Company’s facility construction project on the capacitive touch screen and touch

Pursuant to the contract, the Company is required to prepay 50 % of the contract within three months and the remaining

amount payable upon the completion of the project settlement.

As of the date of this Annual

Report, the Company has prepaid the 50 % of the contract value.

The Company has evaluated subsequent events and

transactions that occurred after the balance sheet date through the date the consolidated financial statements were issued and no subsequent

events occurred that require accrual or disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures