What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-08-14 compared with 2026-05-15 · 321 added, 232 removed, 490 unchanged (53% of the section changed)

3 unchanged sentences

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets at March 31, 2026 and December 31, 2025 (Unaudited)

Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for the Three Months Ended March 31, 2026 and 2025 (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited)

Condensed Consolidated Balance Sheets at June 30, 2026 and December 31, 2025 (Unaudited)

Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Six Months Ended June 30, 2026 and 2025 (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2026 and 2025 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2026 and 2025 (Unaudited)

Notes to Condensed Consolidated Financial Statements

26 unchanged sentences

STOCKHOLDERS’ EQUITY

Common stock, $ 0.001 par value, 65,000,000 shares authorized, 11,931,534 and 11,931,534 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Common stock, $ 0.001 par value, 65,000,000 shares authorized, 12,531,534 and 11,931,534 issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Additional paid in capital

3 unchanged sentences

( 4,983,987 )

TOTAL STOCKHOLDERS’ EQUITY

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE LOSS

Three Months Ended

$ 16, 312,169

AND COMPREHENSIVE INCOME

For the Three Months Ended

For the Six Months Ended

COST OF REVENUES

1 unchanged sentence

( 8,307,944 )

( 19,606,428 )

( 17,955,891 )

OPERATING EXPENSES

2 unchanged sentences

( 1,112,296 )

( 2,480,472 )

Share-based compensation expenses

( 1,032,000 )

TOTAL OPERATING EXPENSES

( 1,718,741 )

( 1,028,607 )

( 2,455,697 )

( 2,697,504 )

INCOME FROM OPERATIONS

5 unchanged sentences

( 2,267,879 )

OTHER COMPREHENSIVE INCOME (LOSS)

( 2,347,828 )

OTHER COMPREHENSIVE INCOME

Foreign currency translation adjustment

11 unchanged sentences

comprehensive

Total stockholders’

stockholders’

Balance as of December 31 2024

5 unchanged sentences

$ 127,880,767

Foreign currency translation adjustment

Balance as of June 30, 2025

$ ( 8,216,320 )

$ 131,805,184

Common stock at

9 unchanged sentences

$ 143,172,938

Share-based compensation expenses

Foreign currency translation adjustment

Balance as of June 30, 2026

$ ( 678,585 )

$ 148,761,586

The accompanying notes are an integral part of

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

For the Six Months Ended

Cash flows from operating activities

3 unchanged sentences

Depreciation and amortization

Share-based compensation expenses

Amortization of operating Right-of-use assets

31 unchanged sentences

Wetouch Technology Inc.

(“Wetouch”, or the “Company”), formerly known as Gulf West Investment Properties, Inc., was originally incorporated

in August 1992, under the laws of the state of Nevada.

On October 9, 2020, the

Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Wetouch Holding Group Limited (“BVI

Wetouch”) and all the shareholders of BVI Wetouch (each, a “BVI Shareholder” and collectively, the “BVI Shareholders”),

or the “Company”), formerly known as Gulf West Investment Properties, Inc., was originally incorporated in August 1992, under

the laws of the state of Nevada.

On October 9, 2020, the Company

entered into a share exchange agreement (the “Share Exchange Agreement”) with Wetouch Holding Group Limited (“BVI Wetouch”)

and all the shareholders of BVI Wetouch (each, a “BVI Shareholder” and collectively, the “BVI Shareholders”),

to acquire all the issued and outstanding capital stock of BVI Wetouch in exchange for the issuance to the BVI Shareholders an aggregate

6 unchanged sentences

a wholly-owned subsidiary of the Company.

BVI Wetouch is a holding

company whose only asset, held through a subsidiary, is 100 % of the registered capital of Sichuan Wetouch Technology Co., Ltd.

BVI Wetouch is a holding company

whose only asset, held through a subsidiary, is 100 % of the registered capital of Sichuan Wetouch Technology Co., Ltd.

Wetouch”), a limited liability company organized under the laws of the People’s Republic of China (“China” or

4 unchanged sentences

specialized industries.

The Reverse Merger was

accounted for as a recapitalization effected by a share exchange, wherein BVI Wetouch is considered the acquirer for accounting and financial

reporting purposes.

The Reverse Merger was accounted

for as a recapitalization effected by a share exchange, wherein BVI Wetouch is considered the acquirer for accounting and financial reporting

The assets and liabilities of BVI Wetouch have been brought forward at their book value and no goodwill has been recognized.

12 unchanged sentences

Kong Wetouch and HK Wetouch are both under the same sole stockholder, the acquisition is accounted for under common control.

In June 2021, Hong Kong

Wetouch started its dissolution process pursuant to the minutes of its special stockholder meeting and was dissolved on March 18, 2022.

In June 2021, Hong Kong Wetouch

started its dissolution process pursuant to the minutes of its special stockholder meeting and was dissolved on March 18, 2022.

Sichuan Wetouch was formed

2 unchanged sentences

Sichuan Wetouch was 100 % held by HK Wetouch.

On December 30, 2020,

Sichuan Vtouch was incorporated in Chengdu, Sichuan, under the PRC laws.

In March 2021, pursuant

to local PRC government guidelines on local environmental issues and the national plan, Sichuan Wetouch was under the government directed

On December 30, 2020, Sichuan

Vtouch was incorporated in Chengdu, Sichuan, under the PRC laws.

In March 2021, pursuant to

local PRC government guidelines on local environmental issues and the national plan, Sichuan Wetouch was under the government directed

relocation order.

Sichuan Vtouch took over the operating business of Sichuan Wetouch.

On March 30, 2023, an independent third party

acquired all shares of Sichuan Wetouch for a nominal amount.

As a result of the above

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

The following diagram illustrates the Company’s

current corporate structure:

On March 30, 2023, an independent

third party acquired all shares of Sichuan Wetouch for a nominal amount.

As a result of the above restructuring,

HK Wetouch became the sole stockholder of Sichuan Vtouch.

The following diagram illustrates

the Company’s current corporate structure:

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING

1 unchanged sentence

of Consolidation

The accompanying unaudited condensed consolidated

financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S.

GAAP have been condensed or omitted as permitted by rules and regulations of the United States Securities and Exchange Commission (the

The condensed consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial

statements of Wetouch.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated

balance sheet of the Company as of December 31, 2025, and the related consolidated statements of comprehensive income, changes in equity

and cash flows for the years then ended.

In the opinion of the management, all adjustments

(which include normal recurring adjustments) necessary to present a fair statement of the financial position as of March 31, 2026, the

results of operations and cash flows for the three-month periods ended March 31, 2026 and 2025 have been made.

However, the results of

operations included in such financial statements may not necessarily be indicative of annual results.

The accompanying unaudited

condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United

States of America (“U.S.

Certain information and footnote disclosures normally included in financial statements prepared

in accordance with U.S.

GAAP have been condensed or omitted as permitted by rules and regulations of the United States Securities and

Exchange Commission (the “SEC”).

The condensed consolidated balance sheet as of December 31, 2025 was derived from the audited

consolidated financial statements of Wetouch.

The accompanying unaudited condensed consolidated financial statements should be read in

conjunction with the consolidated balance sheet of the Company as of December 31, 2025, and the related consolidated statements of comprehensive

income, changes in equity and cash flows for the years then ended.

In the opinion of the management,

all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of June

30, 2026, the results of operations and cash flows for the three-month and six-month periods ended June 30, 2026 and 2025 have been made.

However, the results of operations included in such financial statements may not necessarily be indicative of annual results.

(b) Uses of Estimates

In preparing the consolidated financial statements

in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses

during the reporting period.

These estimates are based on information as of the date of the consolidated financial statements.

estimates required to be made by management include, but are not limited to, the allowance for estimated uncollectible receivables, fair

values of financial instruments, inventory valuations, useful lives of property, plant and equipment, the recoverability of long-lived

assets, provision necessary for contingent liabilities, revenue recognition and realization of deferred tax assets.

Actual results could

differ from those estimates.

In preparing the consolidated

financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets

and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of

revenues and expenses during the reporting period.

These estimates are based on information as of the date of the consolidated financial

Significant estimates required to be made by management include, but are not limited to, the allowance for estimated uncollectible

receivables, fair values of financial instruments, inventory valuations, useful lives of property, plant and equipment, the recoverability

of long-lived assets, provision necessary for contingent liabilities, revenue recognition and realization of deferred tax assets.

results could differ from those estimates.

For a detailed discussion about Wetouch’s

significant accounting policies, refer to Note 2 — “Summary of Significant Accounting Policies,” in Wetouch’s

consolidated financial statements included in Company’s 2025 audited consolidated financial statements.

Other than the revised accounting

policies on lease and segment reporting as below, during the three-month periods ended March 31, 2026, there were no significant changes

made to Wetouch significant accounting policies.

For a detailed discussion

about Wetouch’s significant accounting policies, refer to Note 2 — “Summary of Significant Accounting Policies,”

in Wetouch’s consolidated financial statements included in Company’s 2025 audited consolidated financial statements.

than the revised accounting policies on lease and segment reporting as below, during the three-month and six-month periods ended June

30, 2026, there were no significant changes made to Wetouch significant accounting policies.

(d) Property, plant and equipment,

Property, plant and equipment are stated at cost

less accumulated depreciation and amortization.

Depreciation and amortization of property and equipment is provided using the straight-line

method over their expected useful lives, as follows:

Property, plant and equipment

are stated at cost less accumulated depreciation and amortization.

Depreciation and amortization of property and equipment is provided

using the straight-line method over their expected useful lives, as follows:

Buildings 20 years

1 unchanged sentence

Vehicles 4 years

Expenditures for maintenance and repairs, which

do not materially extend the useful lives of the assets, are charged to expense as incurred.

Expenditures for major renewals and betterments

which substantially extend the useful life of assets are capitalized.

The cost and related accumulated depreciation of assets retired

or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other

comprehensive income in other income or expenses.

Construction in progress, funded by Company’s

working capital, represents manufacturing facilities and office building under construction, is stated at cost and transferred to property,

plant and equipment when it is substantially ready for its intended use.

No depreciation is recorded for construction in progress.

The 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.

Expenditures for maintenance

and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred.

Expenditures for major

renewals and betterments which substantially extend the useful life of assets are capitalized.

The cost and related accumulated depreciation

of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements

of income and other comprehensive income in other income or expenses.

Construction in progress,

funded by Company’s working capital, represents manufacturing facilities and office building under construction, is stated at cost

and transferred to property, plant and equipment when it is substantially ready for its intended use.

No depreciation is recorded for

construction in progress.

The 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.

use right, net

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.

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 $ 569,039 ) 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 $ 569,039 ) to land use right, started the amortization by a useful life of approximately 16 years.

The amortization expense of land use rights was

US$ 8,680 and nil for the three months ended March 31, 2026 and 2025, respectively, and included

in general and administrative expenses.

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 $ 578,508 ) for the Company’s new facility.

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

in the prepayment.

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.

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

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 $ 578,508 ) to land use right, started the amortization by a useful life of approximately 16 years.

The amortization expense

of land use rights was US$ 8,829 and nil for the three months ended June 30, 2026 and 2025, respectively, and $ 26,265 and nil for the

six months ended June 30, 2026 and 2025, respectively, recorded in general and administrative expenses of Condensed Consolidated Statements

of Income and Comprehensive Income.

Land use right 16 years

(f) Impairment of long-lived Assets

Long-lived assets, such as property, plant and

equipment, land use rights, are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such

assets may not be recoverable.

Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of

the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or

If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge

is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group.

Fair value is determined

through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals,

as considered necessary.

Assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell, and are

no longer depreciated.

There was $ nil impairment of construction in progress recognized for the three months ended March 31, 2026 and

2025, respectively.

(g) Recent accounting pronouncements

Long-lived assets, such as

property, plant and equipment, land use rights, are reviewed for impairment when events or changes in circumstances indicate that the

carrying value of such assets may not be recoverable.

Recoverability of a long-lived asset or asset group to be held and used is measured

by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated

by the asset or asset group.

If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an

impairment charge is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group.

value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent

appraisals, as considered necessary.

Assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell,

and are no longer depreciated.

There was $ nil impairment of construction in progress recognized for the six months ended June 30, 2026

and 2025, respectively.

(g) Share-based compensation

ASC 718-10 requires that share-based

payment transactions with employees and nonemployees, such as option, restricted stock, restricted stock unit, dividend equivalent, or

other awards that are approved by the Company’s board, be measured based on the grant-date fair value of the equity instrument issued

and recognized as compensation expense over the requisite service period, with a corresponding addition to equity.

Under this method,

compensation cost related to employee share award or similar equity instruments is measured at the grant date based on the fair value

of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which

generally is the vesting period.

(h) Recent accounting pronouncements

Recently issued accounting

pronouncements not yet adopted

In November 2024, the FASB issued ASU No.

2024-03, Income

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

Disaggregation of

Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU No.

2025-01, Income

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

Clarifying the Effective

Date (“ASU 2025-01”).

ASU 2024-03 requires additional disclosure of the nature of expenses included in

the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income

ASU 2024-03, as clarified by ASU 2025-01, is effective for annual periods beginning after December 15,

In November 2024, the Financial

Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03 “Income Statement:

Reporting Comprehensive Income-Expense

Disaggregation Disclosures (Subtopic 220-40)” to improve the disclosures about an entity’s expenses.

Upon adoption, we will

be required to disclose in the notes to the financial statements a disaggregation of certain expense categories included within the relevant

expense captions on the consolidated statements of income.

The standard is effective for annual periods beginning after December 15,

2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

This guidance will be applied

The standard can be applied

either prospectively or retrospectively.

The Company is currently evaluating the impact from the adoption of this ASU on its consolidated

financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial

Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical

expedient and accounting policy election to allow entities to measure expected credit losses on certain trade receivables and contract

assets using a provision matrix approach.

ASU 2025-05 is effective for annual periods beginning after December 15, 2025,

and interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of this guidance

on our consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-10, Government

Grants (Topic 832):

Accounting for Government Grants Received by Business Entities, which provides updated guidance on how to recognize,

measure, and present government grants.

The ASU will be effective for annual reporting periods beginning after December 15, 2028,

including interim periods within those fiscal years.

with early adoption permitted.

The Company is currently evaluating the impact of

this guidance on our consolidated financial statements and related disclosures.

We are currently assessing adoption timing, the method of adoption, and the effect that the updated

standard will have on our financial statement disclosures

In September 2025, the FASB

issued ASU 2025-06 “Intangibles:

Goodwill and Other‒Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting

for Internal-Use Software” to modernize the accounting for software costs under Subtopic 350-40, Intangibles‒Goodwill and Other‒Internal-Use

Software (referred to as “internal-use software”).

Upon adoption, we will be required to account for internal-use software

under the updated capitalization criteria.

The standard is effective for our interim and annual 2028 periods, with early adoption permitted.

The standard can be applied either prospectively, retrospectively, or under a modified transition approach.

We are currently assessing

adoption timing, the method of adoption, and the effect that the updated standard will have on our consolidated financial statements.

In May 2026, the FASB issued

ASU 2026-02 “Environmental Credits and Environmental Credit Obligations (Topic 818)” to provide recognition, measurement, presentation,

and disclosure guidance for environmental credits and environmental credit obligations.

Upon adoption, we will be required to account

for environmental credits and environmental credit obligations under the new guidance.

The standard is effective for our interim and annual

2028 periods, with early adoption permitted.

The standard should be adopted on a retrospective basis.

We are currently assessing adoption

timing and the effect that the updated standard will have on our consolidated financial statements.

Recently issued accounting

pronouncements adopted

In December 2023, the FASB issued ASU No.

2023-09, Income

Taxes (Topic 740):

Improvements to Income Tax Disclosures, which aims to improve the transparency of income tax disclosures by requiring

consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted.

adopted ASU 2023-09 on January 1, 2025, on a prospective basis (see note 14).

The adoption did not have a material impact

on the consolidated financial statements and related disclosures.

Other accounting standards that have been issued

by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements

upon adoption.

The Company does not discuss recent pronouncements that are not anticipated to have an impact on, or are unrelated to,

its consolidated financial condition, results of operations, cash flows or disclosures.

In December 2023, the FASB

issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which aims to improve the transparency

of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and

income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15,

2024 and early adoption is permitted.

The Company adopted ASU 2023-09 on January 1, 2025, on a prospective basis (see note

The adoption did not have a material impact on the consolidated financial statements and related disclosures.

Other accounting standards

that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated

financial statements upon adoption.

The Company does not discuss recent pronouncements that are not anticipated to have an impact on,

or are unrelated to, its consolidated financial condition, results of operations, cash flows or disclosures.

NOTE 3 — ACCOUNTS RECEIVABLE

6 unchanged sentences

The following table provides

an analysis of the aging of accounts receivable as of March 31, 2026 and December 31, 2025:

an analysis of the aging of accounts receivable as of June 30, 2026 and December 31, 2025:

1-3 months past due

12 unchanged sentences

Prepaid expenses and other current assets

(i) On July 28, 2021, Sichuan Vtouch made a security deposit of RMB 393,000 (equivalent to $ 56,973 ) 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 completion of the new facility.

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

(i) On July 28, 2021, Sichuan Vtouch

made a security deposit of RMB 393,000 (equivalent to $ 57,921 ) 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 completion of the

new facility.

(ii) On February 29, 2024, the Company

advanced market research fees $70,000 and $855,000, respectively, to two unrelated individuals, Mr.

Chien Hui Chueh and Mr.

Cheung Ming Lin, in relation to the Company’s market research service overseas.

The two individuals signed borrowing contracts with a principal amount of $ 70,000 and $ 855,000 , respectively, on February 29, 2024.

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

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

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

Lin, in relation to the Company’s market research service overseas.

The two individuals signed borrowing contracts with a principal

amount of $70,000 and $855,000, respectively, on February 29, 2024.

Those contracts were issued to the Company to evidence

the advances, bearing 3.45% interest per annum, and payable on February 28, 2025, and later extended till August 29, 2026.

(iii) Tax receivable mainly includes

prepaid corporate income tax and value-added tax (VAT) refundable.

(iv) Other receivables are mainly employee

advances and prepaid expenses.

NOTE 5 — PROPERTY, PLANT AND EQUIPMENT,

March 31, 2026

Machinery and equipment

2 unchanged sentences

Property, plant and equipment, net

Depreciation expense was $ 346 and $ 2,486 for

the three-month period ended June 30, 2026 and 2025, respectively.

Depreciation expense was $ 686 and $ 4,957 for the

three-month period ended March 31, 2026 and 2025, respectively

As of March 31, 2026, the Company had commitment

six-month period ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, the Company had commitment

of RMB 7.3 million (equivalent to $ 1.08 million) for construction in progress of our new facility.

15 unchanged sentences

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

the three months ended March 31, 2026.

the six months ended June 30, 2026.

Both operating lease expense and short-term lease

1 unchanged sentence

The components of lease

expense for the three months ended March 31, 2026 and 2025 were as follows:

expense for the three and six months ended June 30, 2026 and 2025 were as follows:

Three Months Ended

Six Months Ended

Lease expense

5 unchanged sentences

The following is a schedule, by years, of maturities

of lease liabilities as of March 31, 2026:

2026 lease payment (till October 31, 2026

of lease liabilities as of June 30, 2026:

2026 lease payment (July 1, 2026 to October 31, 2026

imputed interest

1 unchanged sentence

Lease term and discount

Three Months Ended

For the Three Months Ended

Weighted-average remaining lease term (years) (Unaudited)

3 unchanged sentences

Supplemental cash flow

information related to leases where the Company was the lessee for the three months ended March 31, 2026 and 2025 was as follows:

Three Months Ended

information related to leases where the Company was the lessee for the six months ended June 30, 2026 and 2025 was as follows:

For the Three Months Ended

Cash payments for operating lease

1 unchanged sentence

NOTE 7 — LONG-TERM PREPAYMENT

March 31, 2026

Prepaid equipment

12 unchanged sentences

party are as follows:

Relationship March 31,

Relationship June 30,

2026 December 31,

34 unchanged sentences

relating to undistributed earnings generated prior to January 1, 2008 are exempt from such withholding income tax.

The Company’s provision for income taxes expenses consisted of:

The Company’s provision for income taxes

credit (expenses) consisted of

Three Months Ended

Six Months Ended

PRC income tax

3 unchanged sentences

The following table reconciles the PRC statutory

rates to the Company’s effective tax rate for the three months March 31, 2026 and 2025:

rates to the Company’s effective tax rate for the three and six months June 30, 2026 and 2025:

Three Months Ended

Six Months Ended

PRC statutory income tax rate

27 unchanged sentences

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

As of March 31, 2026 and December 2025,

As of June 30, 2026 and December 2025,

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

13 unchanged sentences

1) Common Stock

The Company’s authorized number of shares of common

stock was 65,000,000 shares with par value of $ 0.001 .

The Company’s authorized number of shares

of common stock was 65,000,000 shares with par value of $ 0.001 .

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

21 unchanged sentences

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

7, 2026, the company filed with the Secretary of State of the State of Nevada an amendment to the Company’s Articles of Incorporation,

as amended (the “Amendment”), which became effective on that date.

In connection with the Amendment, the Company also filed

its Second Amended and Restated Articles of Incorporation (the “Restated AOI”).

The Amendment was approved by the Company’s

stockholders at the annual meeting held on December 26, 2025, and increased the number of authorized shares of the Company’s common

stock from 15,000,000 to 65,000,000 .

As of May 11, 2026, there were

On May 11, 2026, the Compensation Committee of

the Board approved the grant of 600,000 common stock to three independent consultants who contributed to the success of the Company’s

operations in overseas market.

The Award vested immediately upon grant, as a result, the Company recorded share-compensation expenses

of $ 1,032,000 at the price of $ 1.72 at the grant date.

As of June 30, 2026, there were

12,531,534 shares of common stock issued and outstanding.

13 unchanged sentences

was approved by the Financial Industry Regulatory Authority and took effect on September 12, 2023.

All share information included in this Quarterly Report has been adjusted as if the reverse stock split occurred as of the earliest period presented.

All share information included in this

Quarterly Report has been adjusted as if the reverse stock split occurred as of the earliest period presented.

3) Closing of the 2024 Public Offering

18 unchanged sentences

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

As of March 31, 2026

and December 31, 2025, the Company had reserve fund of US 8,073,968 and US $ 8,073,968 , respectively.

As of June 30, 2026 and

December 31, 2025, the Company had reserve fund of US8, 073,968 and US$ 8,073,968 , respectively.

NOTE 12 — SHARE BASED COMPENSATION

The Company applied ASC

718 and related interpretations in accounting for measuring the cost of share-based compensation over the period during which the consultants

are required to provide services in exchange for the issued shares.

On May 11, 2026, the Compensation Committee of

the Board approved the grant of 600,000 common stock to three independent consultants who contribute to the success of the Company’s

operations in overseas market.

The Award vested immediately upon grant.

The fair value of vested shares is determined

by the market closing price of common stock at the grant date.

Accordingly, the Company recorded share-based compensation expenses of

$ 1,032,000 for the three and six months ended June 30, 2026.

NOTE 13 — WEIGHTED AVERAGE NUMBER OF SHARES

35 unchanged sentences

bodies which require certain supporting documentation in order to affect the remittance.

Concentrations - The Company sells its products primarily

to customers in the PRC and to some extent, the overseas customers in European countries and East Asia such as South Korea and Taiwan.

For the three-month period ended March 31, 2026 and 2025, five customers accounted for 22.8 %, 17.9 %, 15.3 %, 14.3 % and 11.9 %, respectively,

and five customers accounted for 21.1 %, 16.9 %, 15.8 %, 15.1 % and 12.4 %, respectively, of the Company’s revenue.

Concentrations - The Company sells

its products primarily to customers in the PRC and to some extent, the overseas customers in European countries and East Asia such as

South Korea and Taiwan.

For the three months ended June 30, 2025, five customers accounted for approximately 22.2 %, 16.3 %, 16.3 %, 14.4 %

and 12.2 %, respectively, of the Company’s total revenue.

For the three months ended June 30, 2025, five customers accounted for

approximately 22.0 %, 16.2 %, 15.7 %, 14.5 %, and 12.0 %, respectively, of the Company’s revenue.

For the six months ended June 30, 2025, five customers

accounted for 22.5 %, 17.2 %, 15.7 %, 14.4 % and 12.1 %, respectively, of the Company’s total revenue.

For the six months ended June

30, 2025, five customers accounted for 21.5 %, 16.6 %, 15.8 %, 14.9 %, and 12.2 %, respectively, of the Company’s revenue.

The Company’s top ten customers aggregately

accounted for an aggregate of 100.0 % and 99.9 % of the total revenue for the three-month period ended March 31, 2026 and 2025,

respectively.

As of March 31, 2026, five customers accounted for 26.6 %, 18.6 %, 13.2 %, 12.2 %, and 10.9 %

of the total accounts receivable balance, respectively.

The Company purchases its raw materials through various suppliers.

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

for an aggregate of approximately 10.1 % (one supplier) and 49.2 % (four suppliers) for the three-month period ended March 31, 2026

accounted for 99.9 % and 99.6 % of the total revenue for the three months ended June 30, 2026 and 2025, and approximately 99.9 % and 99.4 %

for the six months ended June 30, 2026 and 2025.

As of June 30, 2026, five customers accounted

for 28.5 %, 19.9 %, 8.2 %, 8.2 % and 5.6 % of the total accounts receivable balance, respectively.

The Company purchases its raw materials through

various suppliers.

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

purchases, accounted for an aggregate of approximately 44.6 % (four suppliers) and 50.1 % (four suppliers) for the three months ended June

30, 2026 and 2025, respectively, and approximately 10.3 % (one supplier) and 49.6 % (four suppliers) for the six months ended June

30, 2026 and 2025, respectively.

6 unchanged sentences

time and attention.

As of the date of this Quarterly 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 Quarterly 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

As of March 31, 2026, the Company had commitment

As of June 30, 2026, the Company had commitment

RMB 7.3 million (equivalent to $ 1.07 million) for construction in progress.

8 unchanged sentences

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

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

Three-Month Period Ended

Company’s geographical revenue information is set forth below:

Three Months Ended

Six Months Ended

Sales in Overseas

-Republic of China (ROC, or Taiwan)

Total revenues

2) Segment information is

set forth below:

Three-Month Period Ended

Total Revenue

information is set forth below:

Three Months Ended

Six Months Ended

Cost of revenues

Allowance for credit losses

Reversal of provision for obsolete inventory

Allowance for (provision of) credit losses

Reversal of provision of obsolete inventory

Share-based compensation

Depreciation and amortization expense

7 unchanged sentences

$ 137,024,190

$ 152,594,577

$ 137,024,190

* Other segment items include remaining selling expense, general and administration expenses and interest income.

3 unchanged sentences

events occurred that require accrual or disclosure.

1) On July 2, 2026, the

compensation committee of the Company’s board of directors approved the grant of 850,000 restricted stocks to three external consultants

who contributed to the success of the Company’s operations in the overseas market.

The Award will be vested in six months.

2) On July 28, 2026, Wetouch Technology Inc.

(the “Company”)

announced that its Board of Directors had declared a special cash dividend of US$ 0.5 million (or approximately US$ 0.04 per share of common

stock based on approximately 13.38 million outstanding shares) expected to be paid on or about September 30, 2026 with a record date

of August 17, 2026.

The special cash dividend plan reflects

the Company’s continued focus on enhancing shareholder value while maintaining sufficient financial resources to support its business

growth, technology innovation, strategic investments, and long-term development initiatives.

3) On August 11, 2026, the Company filed with Preliminary Proxy

Statement (14A) with SEC on a special meeting of the stockholders (“Special Meeting”) of Wetouch Technology Inc, which will

be held at the Company’s corporate headquarters, located at No.

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

Sichuan, China on September 4, 2026 at 10:00 A.M., local time.

Matters to be voted upon at the Special Meeting are to i) approve

the issuance of shares of common stock to Qixun Technology (Samoa) Limited and Qihong Technology (Samoa) Limited pursuant to certain

share purchase agreements in accordance with Nasdaq Listing Rule 5635 (the “Issuance Proposal”);

and), and ii) transact

such other business as may properly come before the meeting or any adjournment thereof.

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-Q

Item 1. Financial Statements