What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-04-17 compared with 2023-04-17 · 476 added, 672 removed, 421 unchanged (73% of the section changed)

were originally incorporated under the laws of the state of Nevada on August 31, 1992.

On October 9, 2020, we entered into a share exchange

agreement (the “Share Exchange Agreement”) with Wetouch Holding Group Limited, a British Virgin Islands company incorporated

on August 14, 2020 under the laws of the British Virgin Islands (“BVI Wetouch”), and all the shareholders of BVI Wetouch

(each a “Shareholder” and collectively the “Shareholders”), to acquire all the issued and outstanding capital

stock of BVI Wetouch in exchange for the issuance to the Shareholders an aggregate of 28 million shares of our common stock (the “Reverse

The Reverse Merger closed on October 9, 2020.

Immediately after the closing of the Reverse Merger, we had a total of

31,396,394 issued and outstanding shares of common stock.

As a result of the Reverse Merger, BVI Wetouch is now our wholly-owned subsidiary.

our wholly-owned subsidiaries, we are engaged in the research, development, manufacturing, sales and servicing of medium to large sized

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We specialize 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, HMI, and other specialized industries.

markets and used in the financial terminals, automotive, Point of Sales, gaming, lottery, medical, Human-Machine Interface (“HMI”),

and other specialized industries.

product portfolio comprises medium to large sized projected capacitive touchscreens ranging from 7.0 inch to 42 inch screens.

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(ii) Glass-Film-Film (“GFF”),

mostly used in high-end GPS and entertainment panels, industrial HMI, financial and banking terminals, lottery and gaming industry;

Plastic-Glass (“PG”), typically adopted by touchscreens in GPS/entertainment panels motor vehicle GPS, smart home, robots

and charging stations;

mostly used in high-end GPS and entertainment panels, industrial HMI, financial and banking terminals, and the lottery and gaming industry;

(iii) Plastic-Glass (“PG”), typically adopted by touchscreens in GPS/entertainment panels, motor vehicle GPS, smart home,

robotics and charging stations;

and (iv) Glass-Film (“GF”), mostly used in industrial HMI.

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and high light-transmittance ratio and stability.

As a high technology company, our PRC subsidiary has received certifications from domestic

and international institutions, such as ISO9001 Quality Management Systems (QMS) Certification of Registration, ISO 14001 Environmental

Management System (EMS) Certification of Registration, and RoHS SGS Certification (Restriction of Hazardous Substance Testing Certification).

generate revenues through sales of our various touchscreen products.

For the twelve months ended December 31, 2022 and 2021, we recognized

approximately $37.9 million and $40.8 million, respectively, in revenues.

sell our touchscreen products both domestically in China and internationally, covering major areas in China, including but not

limited to the eastern, southern, northern and southwest regions of China, Taiwan, South Korea, and Germany.

We believe that we have

established a strong and diversified client base.

For the years ended December 31, 2022 and 2021, our domestic sales accounted for

69.7% and 66.7%, respectively, of our revenues, and our international sales accounted for 30.3% and 33.3%, respectively, of our

As a high technology company, Sichuan Vtouch Technology Co., Ltd., our subsidiary in

Mainland China (“Sichuan Vtouch”) has received certifications from domestic and

international institutions, such as ISO9001 Quality Management Systems (QMS) Certification of Registration, ISO 14001 Environmental Management

System (EMS) Certification of Registration, and RoHS SGS Certification (Restriction of Hazardous Substance Testing Certification).

We generate revenues through sales of our various touchscreen products.

For the year ended December 31, 2023 and 2022, we recognized approximately $39.7 million and $37.9 million, respectively, in revenues.

sell our touchscreen products both domestically in China and internationally, covering major areas in Mainland China, including but not

limited to the eastern, southern, northern and southwest regions of Mainland China, Taiwan, South Korea, and Germany.

We believe that

we have established a strong and diversified client base.

For the year ended December 31, 2023 and 2022, our domestic sales accounted

for 69.6% and 69.7%, respectively, of our revenues, and our international sales accounted for 30.4% and 30.3%, respectively, of our revenues.

History and Structure

were originally incorporated under the laws of the state of Nevada on August 31, 1992 as Gulf West Investment Properties, Inc, and were

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discharged the Custodian’s duties.

June 18, 2020, we consummated the transactions contemplated by a Stock Purchase Agreement among the Company, the Custodian, Qixun Samoa

and Qihong Samoa (Qixun Samoa and Qixun Samoa are referred to as the “Buyers”).

Pursuant to the Stock Purchase Agreement,

the Buyers acquired all of the 1,714,286 shares of the Company owned by the Custodian, representing 50.47% of the issued and outstanding

shares of the Company.

The Custodian and the Company agreed to indemnify the Buyers from any liabilities of the Company occurring prior

to June 18, 2020, and the promissory note issued by the Custodian to the Company was canceled.

Immediately following the closing, David

Lazar resigned as the sole officer and director of the Company and Jiaying Cai was appointed as president, secretary and treasurer of

the Company and as the sole director.

Change/Reverse Stock Split

June 18, 2020, we consummated the transactions contemplated by a Stock Purchase Agreement among the Company, the Custodian, Qixun

Technology (Samoa) Limited (“Qixun Samoa”) and Qihong Technology (Samoa) Limited

(“Qihong Samoa”, Qixun Samoa and Qixun Samoa are referred to as the “Buyers”).

Pursuant to the Stock Purchase

Agreement, the Buyers acquired all of the 85,715 shares of the Company owned by the Custodian, representing 50.47% of the issued and

outstanding shares of the Company.

The Custodian and the Company agreed to indemnify the Buyers from any liabilities of the Company occurring

prior to June 18, 2020, and the promissory note issued by the Custodian to the Company was canceled.

Immediately following the closing,

David Lazar resigned as the sole officer and director of the Company and Jiaying Cai was appointed as president, secretary and treasurer

of the Company and as the sole director.

September 30, 2020, we changed our name from Gulf West Investment Properties, Inc.

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Restated Articles of Incorporation with the Nevada Secretary of State to give effect to a name change.

The Amended and Restated Articles

also effectuated a reverse split of our authorized, issued and outstanding shares of common stock on a 70 for 1 new basis whereby each

70 shares of outstanding common stock was exchanged for one (1) share of new common stock (the “Reverse Split” and, for avoidance

of doubt, all share amounts set forth herein shall be post Reverse Split unless otherwise specified) and, consequently, our authorized

common stock increased to 300,000,000 shares of common stock and 10,000,000 shares of preferred stock, and our then issued and outstanding

common shares decreased from 237,742,066 to 3,396,394 shares, all with a par value of $0.001.

All share and per share numbers relating

to our common stock prior to the effectiveness of the Reverse Split have been adjusted to give effect to the Reverse Split.

a result of the name change, we changed our trading symbol from “GLFW” to “WETH,” effective November 3, 2020.

of BVI Wetouch

October 9, 2020, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with BVI Wetouch and all of

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

BVI Shareholders an aggregate of 28,000,000 shares of our common stock.

In the Reverse Merger, each ordinary share of BVI Wetouch was

exchanged for 560 shares of common stock of Wetouch.

Immediately after the closing of the Reverse Merger on October 9, 2020, we had a

total of 31,396,394 issued and outstanding shares of common stock.

As a result of the Reverse Merger, BVI Wetouch is now our wholly-owned

As a result of the name change,

we changed our trading symbol from “GLFW” to “WETH,” effective November 3, 2020.

Amended and Restated Articles also effectuated a reverse split of our authorized, issued and outstanding shares of common stock on a

70 for 1 new basis whereby each 70 shares of outstanding common stock was exchanged for one (1) share of new common stock (the “Reverse

Split” and, for avoidance of doubt, all share amounts set forth herein shall be post Reverse Split unless otherwise specified)

and, consequently, our authorized common stock increased to 300,000,000 shares of common stock and 10,000,000 shares of preferred stock,

and our then issued and outstanding common shares decreased from 11,887,103 to 169,820 shares, all with a par value of $0.001 per

October 9, 2020, we entered into a share exchange agreement (the “Share Exchange Agreement”) with Wetouch Holding Group Limited,

a British Virgin Islands company incorporated on August 14, 2020 under the laws of the British Virgin Islands (“BVI Wetouch”),

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

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

aggregate of 28 million shares of our common stock (the “Reverse Merger”).

The Reverse Merger closed on October 9, 2020.

Immediately after the closing of the Reverse Merger, we had a total of 31,396,394 issued and outstanding shares of common stock.

result of the Reverse Merger, BVI Wetouch is now our wholly-owned subsidiary.

October 12, 2020, Guangde Cai was appointed as an additional director and Chairman of the Company.

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the Company owns indirectly all the business of Sichuan Wetouch.

As a result of the Reverse Merger in which the Company acquired all

the outstanding shares of BVI Wetouch, Hong Kong Wetouch and Sichuan Wetouch become our indirect wholly-owned subsidiaries.

As a result of the Reverse Merger, Hong Kong Wetouch and Sichuan Wetouch become our indirect wholly-owned subsidiaries.

of HK Wetouch

Kong Wetouch Technology Limited, a limited company organized under the laws of Hong Kong (“HK Wetouch”), an affiliate of

Guangde Cai, our former Chairman and Director, was incorporated on December 3, 2020 under the laws of Hong Kong.

Kong Wetouch Technology Limited, a limited company organized under the laws of Hong Kong (“HK Wetouch”), was incorporated on December 3, 2020 under the laws of Hong Kong.

HK Wetouch was established

to own all the outstanding shares of Sichuan Vtouch Technology Co., Ltd., which was incorporated on December 30, 2020 (“Sichuan

Vtouch”) in Chengdu, Sichuan, under the laws of The People’s Republic of China (“PRC”).

to own all the outstanding shares of Sichuan Vtouch Technology Co., Ltd., which was incorporated on December 30, 2020 in Chengdu, Sichuan,

under the laws of The People’s Republic of China (“China,” or the “PRC”).

March 12, 2021, BVI Wetouch, the Company’s wholly owned subsidiary, acquired all the outstanding shares of HK Wetouch from the

sole shareholder of HK Wetouch, Guangde Cai, in consideration of the payment of HK$10,000 pursuant to instruments of transfer in accordance

with Hong Kong law.

As a result of the acquisition, HK Wetouch became a wholly-owned subsidiary of BVI Wetouch.

BVI Wetouch owns (i)

all the outstanding shares of Hong Kong Wetouch, which, in turn, owns all the outstanding shares of Sichuan Wetouch and (ii) all of the

outstanding shares of HK Wetouch, which owns all the shares of Sichuan Vtouch.

Leaseback Agreement

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

relocation order to relocate no later than December 31, 2021 and received compensation accordingly.

March 16, 2021, Sichuan Wetouch entered into an Agreement of Compensation on Demolition (“Compensation Agreement”) with Meishan

Huantian Industrial Co., Ltd, formerly named Sichuan Renshou Shigao Tianfu Investment Co., Ltd, a limited company owned by the local

government (“Sichuan Renshou”), for the withdrawal of our right to use of state-owned land and the demolition of all buildings,

facilities and equipment on such land where we maintain our executive offices, research and development facilities and factories at No.29,

Third Main Avenue, Shigao Town, Renshou County, Meishan City, Sichuan, China (the “Property”).

The Property, all buildings,

facilities, equipment and all other appurtenances on the Property are collectively referred to as “Properties”.

The Compensation

Agreement was executed and delivered as a result of guidelines (the “Guidelines”) published by the local government of with

respect to local environmental issues and a national overall plan on Tianfu New District, Meishan City, Sichuan, PRC.

In accordance with

the Guidelines, a project named “Chaisang River Ecological Wetland Park” is under construction in the areas where the manufacturing

facilities and properties of the Company are located.

As a result, Sichuan Wetouch must relocate.

In consideration for such relocation,

the owner of the buildings on the state-owned land will be compensated.

order to minimize the interruption of our business, Sichuan Vtouch entered into a Leaseback Agreement with Sichuan Renshou on March 16,

The Leaseback Agreement entitles us to lease back the Properties commencing from April 1, 2021 until December 31, 2021, at a monthly

rent of RMB300,000 (approximately $46,154), which period was extended to October 31, 2022.

On October 16, 2022, Sichuan Vtouch entered

an extension to the Leaseback Agreement with Sichuan Renshou to extend the period it granted Sichuan Vtouch to lease back the Properties

until October 31, 2023, at a monthly rent of RMB400,000 (approximately $59,941).

March 18, 2021, Sichuan Wetouch received a total amount of RMB115.2 million (approximately $17.7 million) as the total amount of compensation

from Sichuan Renshou, including RMB100.2 million ($15.4 million) based upon the appraised value of the Properties plus an extra 15% relocation

bonus of RMB15.0 million ($2.3 million).

are actively searching for an appropriate parcel in Chengdu Medicine City (Technology Park), Wenjiang District, Chengdu for the construction

of our new production facilities and office buildings.

As of the date of this Annual Report, we estimate that our capital needs for this

acquisition and construction will be approximately RMB170.0 million (approximately $26.2 million), but there is no assurance that the

estimated amount is sufficient to achieve our goals.

We may need additional financing for our business development.

In addition, we expect

that this acquisition and construction will be completed prior to October 31, 2023, but there is no assurance and we may need extended

time to achieve our business plan.

Pursuant to local PRC government guidelines on local environment issues and the national overall plan,

Sichuan Wetouch was under the government directed relocation order to relocate no later than October 31, 2023 and was compensated for

RMB115.2 million ($17.8 million) from the local government for the withdrawal of the right to use of state-owned land and the demolition

of all buildings, facilities, equipment and all other appurtenances on the land.

sole shareholder of HK Wetouch, Guangde Cai, who was our former Chairman and Director in consideration of the payment of HK$10,000 pursuant

to the instruments of transfer in accordance with Hong Kong law.

As a result of the acquisition, HK Wetouch became a wholly-owned subsidiary

of BVI Wetouch.

Immediately following the acquisition of HK Wetouch, BVI Wetouch owned (i) all the outstanding shares of Hong Kong Wetouch,

which, in turn, owned all the outstanding shares of Sichuan Wetouch and (ii) all of the outstanding shares of HK Wetouch, which owned

all the shares of Sichuan Vtouch.

March 2, 2021, HK Wetouch acquired all shares of Hong Kong Wetouch.

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been assumed by Sichuan Vtouch.

Resale Registration Statement

filed a Form S-1 registration statement with respect to the resale by 44 selling stockholders identified in the Annual Report for an

aggregate of 15,889,371 shares of common stock of the Company.

The registration statement was declared effective by the Commission on

January 7, 2021 (Registration No.

Private Sale of Shares

January 19, 2023, we sold an aggregate of 160,000,000 shares of the common stock of the Company for an aggregate purchase price of $40,000,000,

or $0.25 per share.

The net proceeds of the offering (after deducting legal and accounting fees and expenses) shall be used by the Company

for working capital and general corporate purposes and the repayment of debt.

Reverse Stock Split

February 17, 2023, the Board authorized a reverse stock split 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 as determined by the Chairman of the Board.

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

in the same ratio.

Director Appointment

February 17, 2023, the Board appointed Congjin Wang to serve as a member of the Board, the Audit Committee, the Compensation Committee

and as the Chairman of Nominating and Corporate Governance Committees of the Board.

On February 16, 2023, Jeffrey Kone resigned as a

member of the Board of the Company and as a member of the Audit Committee, Compensation Committee and Nominating and Governance Committee.

August 31, 2022, the Board appointed Fei Bai to serve a member of the Board and Chairman of the Board and appointed Xiaojin Tang to serve

as a member of the Board, the Audit Committee, the Chairman of Compensation Committee, and the Nominating and Corporate Governance Committee

of the Board.

On August 31, 2022, Guangde Cai resigned as a member of the Board and as the Chairman of the Board and Wei Wang resigned

as a member of the Board and the Audit Committee, the Chairman of the Compensation Committee, and the Nominating and Corporate Governance

Committee of the Board.

March 30, 2023, an independent third party acquired all the shares of Sichuan Wetouch for a nominal amount.

diagram below sets forth our corporate structure as of the date of this Annual Report.

January 19, 2023, we entered into a securities purchase agreement with certain investors, pursuant to which we sold to such investors

an aggregate of 160,000,000 shares of the common stock of the Company for an aggregate purchase price of $40,000,000, or $0.25 per share.

The net proceeds of the offering (after deducting legal and accounting fees and expenses) shall be used by the Company for working capital

and general corporate purposes and the repayment of debt.

The issuance of the shares in the private placement was exempted from registration

pursuant to Section 4(a)(2) and/or Regulation S as promulgated by the U.S.

Securities and Exchange

Commission under the Securities Act.

The securities are subject to transfer restrictions, and the certificates evidencing the shares

will contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered

or sold absent registration or pursuant to an exemption therefrom.

Placement Consent Agreement

March 18, 2023, we entered into an agreement with Craft Capital Management LLC and R.F.

Lafferty & Co., Inc.

(the “Representatives”)

pursuant to which the Representatives agreed to consent to the private placement described above, and we agreed to pay the Representatives

a fee of $1,200,000, payable only upon the closing of the underwritten offering.

If the underwritten offering is not completed by November

1, 2023, the Representatives reserve their rights to pursue any and all claims, actions or remedies available to them regarding the Private

Placement under the engagement between us and the Representatives.

COVID-19 pandemic and resulting global disruptions have affected our businesses, as well as those of our customers and suppliers significantly.

The spread of COVID-19 has caused significant disruption to society as a whole, including the workplace.

The resulting impact on the

global supply chain has disrupted most aspects of national and international commerce, with government-mandated social distancing measures

imposing stay-at-home and work-from-home orders in almost every country.

The effects of social distancing have shut down significant

parts of the local, regional, national, and international economies, for limited or extended periods of time, with the exception of government

designated essential services.

in the spring of 2021, China began to experience an increase of COVID-19 cases, and to some extent, local and national governments began

to take more restrictive measures to stem the spread of the virus, particularly from October to December 2021.

The Company has several

shutdowns during the year ended December 31, 2022.

serve our customers while also providing for the safety of our employees and service providers, we have modified numerous aspects of

our logistics, transportation, supply chain, purchasing, and after-sale processes.

The Company has taken proactive measures to promote

products to new customers and entering more regions during the year ended December 31, 2022.

The extent of the impact of COVID-19 on

the Company’s results of operations and financial condition will depend on the virus’ future developments, including the

duration and spread of the outbreak and the impact on the Company’s customers, which are still uncertain and cannot be reasonably

estimated at this point of time.

March 18, 2023, the Company entered into a private placement consent agreement with a third-party investment bank firm (see Note 10)

on the agent fees of US$1.2 million, payable only on the completion of a private placement.

If the private placement is not completed

by November 1, 2023, the representatives under the agreement reserve their rights to pursue any and all claims, actions or remedies available

to them under the engagement between the Company and the private placement representatives.

The Company made the full payment in February,

February 17, 2023, our board of directors (the “Board”) authorized a reverse stock split of our common stock at 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 as 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.

July 16, 2023, the Company’s board of directors approved the reverse stock split of the Company’s common stock at a ratio

On July 16, 2023, the Company filed a certificate of change (with an effective date of July 16, 2023) with the Nevada Secretary

of State pursuant to Section 78.209 of the Nevada Revised Statutes to effectuate a 1-for-20 reverse stock split of its common stock.

On September 11, 2023, the reverse stock split was approved by the Financial Industry Regulatory Authority and took effect on September

All share information included in this annual report has been adjusted as if the reverse stock split occurred as of the earliest

period presented.

February 20, 2024, we entered into an underwriting agreement with WestPark Capital, Inc.

and Craft Capital Management LLC, as

representatives (the “Public Offering Representatives”) of the underwriters listed in the underwriting agreement (the

“Underwriters”), pursuant to which the Company agreed to sell to the Underwriters in a firm commitment underwritten

public offering (the “Offering”) up to an aggregate of 2,484,000 shares

of our common stock, par value $0.001 per share, at a public offering price of $5.00 per share.

The Offering was conducted pursuant

to a Registration Statement on Form S-1, as amended (SEC filed No.

333-270726), which was declared effective on February 14, 2024.

In connection with the Offering, our common stock began trading on the Nasdaq Capital Market under the symbol WETH on February 21,

The Offering closed on February 23, 2024 and generated gross proceeds of $10.8 million.

We paid a total of approximately $0.8

million in underwriting discounts and commissions, and approximately $0.8 million for other costs and expenses related to the

Our net proceeds from the Offering, after deducting the underwriting discount, the Underwriters’ fees and expenses,

and our Offering expenses, were approximately $9.2 million.

We also issued the Representatives’ Warrants (the “Public

Offering Representatives’ Warrants”) to the Public Offering Representatives to purchase 43,200 shares of Common Stock at

an exercise price equal to 125.0% of the public offering price.

offer medium to large sized projected capacitive touchscreens, which can be categorized as set forth below:

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and high end GPS/car entertainment, finance, POS and lottery machines.

product uses a double layer of conductive films, with an optically clear adhesive (OCA) between a layer of a tempered glass.

product’s functionality comes from the interaction between the multiple layers of conductive film and glass, which does not

require extensive coating, lithography and etching.

This type of product is anti- explosive and has relatively low manufacturing

However, products of this type in large sizes will require greater degree of signal penetration and long distance transmission

technology which will be more technically challenging to achieve.

product uses a double layer of conductive films, with an optically clear adhesive (OCA) between a layer of tempered glass.

The product’s

functionality comes from the interaction between the multiple layers of conductive film and glass, which does not require extensive

coating, lithography and etching.

This type of product is anti- explosive and has relatively low manufacturing cost.

However, products

of this type in large sizes will require greater degree of signal penetration and long distance transmission technology which will

be more technically challenging to achieve.

gaming and lottery, and medical industries

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The product’s functionality relies on the interaction between the layers of conductive glass.

the G+F+F type, this product does not require extensive coating, lithography and etching and has relatively low manufacturing cost.

the GFF type, this product does not require extensive coating, lithography and etching and has relatively low manufacturing cost.

vehicle GPS, smart home, robots and charging stations

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functionality relies on the interaction between the layers of conductive glass.

Like the G+F+F type, this product does not require

Like the GFF type, this product does not require

extensive coating, lithography and etching and has relatively low manufacturing cost.

of December 31, 2022, product types G+F+F and G+G constitute our main stream products, accounting for approximately an average of 38.5%

and 52.68%, respectively, of our total revenues, with product types G+F and P+G and other raw materials accounting for 2.55%, 4.4% and

1.87%, respectively, of our total revenues.

As of December 31, 2021, product types G+F+F and G+G constitute our main stream products,

accounting for approximately an average of 40.8% and 52.4%, respectively, of our total revenues, with product types G+F and P+G and other

raw materials accounting for 2.2%, 4.2% and 0.4%, respectively, of our total revenues.

of December 31, 2023, product types GFF and GG constitute our main stream products, accounting for approximately an average

of 41.8% and 51.7%, respectively, of our total revenues, with product types GF and PG and other raw materials accounting for

2.0%, 2.4% and 2.1%, respectively, of our total revenues.

As of December 31, 2022, product types GFF and GG

constitute our main stream products, accounting for approximately an average of 38.5% and 52.68%, respectively, of our total

revenues, with product types GF and PG and other raw materials accounting for 2.55%, 4.4% and 1.87%, respectively, of our total

of the Company’s Products

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of Sale (“POS”) Machines

machines, or point of sale machines, are used in a variety of retailers, including in department stores, supermarkets, convenience

machines are used in a variety of retailers, including in department stores, supermarkets, convenience

stores, boutiques, restaurants, hotels, banks, logistics, telecommunication and other service industries.

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These touchscreens must be resistant to interference, stable and have good touch sensitivity.

Wetouch’s products fully meet these requirements, being temperature variation resistant, dustproof and waterproof.

Our products fully meet these requirements, being temperature variation resistant, dustproof and waterproof.

new generation of gambling machines are commonly adopting a touchscreen function.

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an enhanced experience for uses via multi-touch sensory touch systems.

Wetouch’s products are therefore popular amongst gambling

Our products are therefore popular amongst gambling

machine manufacturers.

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are used in daily lives, and as such there is a continuous demand for high quality and effective touchscreens.

Wetouch’s products

are widely used in these ticketing machines and kiosks.

the year ended December 31, 2023, we had approximately $9.8 million in revenues generated from the sales of automotive touchscreens,

accounting for 24.5% of our total revenues, with industrial HMI touchscreens accounting for 21.1%, gaming touchscreens accounting for

13.7%, POS touchscreens for 17.3%, multi-functional printer touchscreens for 10.1%, medical touchscreens for 13.3% and other touchscreen

products (applied in financial terminals, ticket vending machines, and self-service kiosks, etc.) accounting for 0% of our total revenues.

For the year ended December 31, 2021, we had approximately $11.6 million in revenues generated from the sales of automotive touchscreens,

accounting for 28.4% of our total revenues, with industrial HMI touchscreens accounting for 19.6%, gaming touchscreens accounting for

14.3%, POS touchscreens for 15.4%, multi-functional printer touchscreens for 9.2%, medical touchscreens for 12.8% and other touchscreen

products (applied in financial terminals, ticket vending machines, and self-service kiosks, etc.) accounting for 0.3% of our total revenues.

have six (6) and five (5) customers each accounting for more than 10% of our revenues in 2022 and 2021, respectively.

the year ended December 31, 2022, we had a total number of 41 customers.

Our top six customers, namely (1) Siemens Industrial

Automation Products (Chengdu) Co., Ltd., (2) Shanghai Sigang Electronics Co., Ltd., (3) E-Lead Electronic Co.

MultimedialLink Inc., (5) Suzhou Weinview Co., Ltd., and (6) Canon (Suzhou) Ltd.

accounted for 21.2%, 16.1%, 14.8%, 13.7%, 11.9%

and 10.1%, respectively, of our total revenues.

the year ended December 31, 2021, we had a total number of 32 customers.

Our top five customers, namely (1) Siemens Industrial Automation

Products (Chengdu) Co., Ltd., (2) E-Lead Electronic Co.

Ltd., (3) Shanghai Sigang Electronics Co., Ltd., (4) MultimediaLink Inc., and

(5) Suzhou Weinview Co., Ltd., accounted for 19.53%, 17.33%, 14.53%, 14.24% and 11.13%, respectively, of our total revenues.

Considering Sichuan Wetouch’s business and operations have been assumed

by Sichuan Vtouch, Sichuan Vtouch entered into the above framework agreements, which were entered by Sichuan Wetouch previously, with

our top five customers on December 31, 2021.

material terms of the sales framework agreements with our top five customers provide:

accounting for 24.6% of our total revenues, with industrial HMI touchscreens accounting for 19.9%, POS touchscreens for 16.7%, gaming

touchscreens accounting for 14.2%, medical touchscreens for 14.6%, and multi-functional printer touchscreens for 10.1%, of our total

For the year ended December 31, 2022, we had approximately $9.3 million in revenues generated from the sales of automotive

touchscreens, accounting for 24.5% of our total revenues, with industrial HMI touchscreens accounting for 21.1%, POS touchscreens for

6.6%, gaming touchscreens accounting for 5.2%, multi-functional printer touchscreens for 3.8%, of our total revenues.

have six and six customers each accounting for more than 10% of our revenues for the year ended December 31, 2023 and 2022,

respectively.

the year ended December 31, 2023, our top five customers, namely (1) Siemens Industrial Automation Products (Chengdu) Co., Ltd., (2)

Shanghai Sigang Electronics Co., Ltd., (3) E-Lead Electronic Co.

Ltd., (4) MultimediaLink Inc., and (5) Suzhou Weinview Co., Ltd.,

accounted for approximately 22.5%, 16.5%, 15.7%, 14.1% and 11.3%, respectively, of our total revenues.

the year ended December 31, 2022, our top six customers, namely (1) Siemens Industrial Automation Products (Chengdu) Co., Ltd., (2)

Shanghai Sigang Electronics Co., Ltd., (3) E-Lead Electronic Co.

Ltd., (4) MultimediaLink Inc., (5) Suzhou Weinview Co., Ltd., and

(6) Canon (Suzhou) Ltd.

accounted for approximately 21.2%, 16.1%, 14.8%, 13.7%, 11.9% and 10.1%, respectively, of our total

Sichuan Wetouch’s business and operations have been assumed by Sichuan Vtouch, Sichuan Vtouch entered into sales framework

agreements, which were entered into by Sichuan Wetouch previously, with our top customers on December 31, 2021.

terms of the sales framework agreements with our top five customers provide:

term of each sales framework agreement is four years, which may be renewed by a separate agreement upon expiration.

minimum purchase amount for period from January 1 to December 31 each year.

We will send the price list to the customers at the beginning of each year.

The specific execution price is subject to the order signed by the parties.

We have the right to adjust the price due to the market or other factors.

When there is adjustment, we shall send a written notice of change of the price 30 days in advance.

For the first year, we grant the customers a credit limit of 1.5 million

and a credit line of 3 months.

During supply, the portion of payment that exceeds the credit line shall be paid before goods are delivered.

In the next year, the credit will be increased according to the sales of the previous year, which shall be subject to the negotiation

of both parties.

The customers shall make payment in full and on time according to the payment

method and time of the purchase order and shall not delay or refuse to pay.

If the customers fail to make payment within the agreed period

of the purchase order and still fail to make payment after being urged by us, we may stop the supply and have the right to demand payment

of a late fee of 0.3‰ of the contract amount per day from the customers;

If the customers still refuse to make payment after 30

days of notice from us, we have the right to file a lawsuit with the court.

The customers shall bear the litigation costs, lawyer’s fees,

and other debt recovery costs.

are required to provide products to customers pursuant to the delivery date and quantity, requirements included in the purchase

orders and shall negotiate with customers if we are unable to so provide.

The customers

are entitled to compensation of losses due to our failure to provide after-sale services.

The customer shall purchase an annual

minimum purchase amount for period from January 1 to December 31 each year as specified in the agreement.

If the customer fails to purchase the minimum purchase amount in the applicable agreement,

the customer will be deprived of the most favorable price treatment for the following year and rebate rewards for the current year.

will send the price list to the customers at the beginning of each year.

The specific execution price is subject to the order signed

by the parties.

have the right to adjust the price due to the market or other factors.

When there is any adjustment, we shall send a written notice

of such adjustment with 30 days in advance.

Upon receipt of this notice, the customer may choose to accept the price adjustment or

terminate the sales frame agreement.

the first year, we grant the customers a credit limit of $1.5 million and a credit term of 3 months.

During supply, the portion of

payment that exceeds the credit line shall be paid before goods are delivered.

In the next year, the credit will be increased according

to the sales of the previous year, which shall be subject to the negotiation of both parties.

customers shall make payment in full and on time according to the payment method and time of the purchase order and shall not delay

or refuse to pay.

If the customers fail to make payment within the agreed period of the purchase order and still fail to make payment

after being urged by us, we may stop the supply and have the right to demand payment of a late fee of 0.3% of the contract amount

per day from the customers;

If the customers still refuse to make payment after 30 days of notice from us, we have the right to file

a lawsuit with the court.

The customers shall bear the litigation costs, lawyer’s fees, and other debt recovery costs.

are required to provide products to customers pursuant to the delivery date and quantity, requirements included in the purchase orders

and shall negotiate with customers if we are unable to so provide.

customers are entitled to compensation of losses due to our failure to provide after-sale services.

violation of the terms of the agreements may result in the termination of the agreements and the breaching party shall be responsible

for all business and economic losses and legal liabilities arising therefrom.

Purchase Requirements

Although the material terms of our sales framework agreements with our

major customers are identical, the minimum purchase amounts differ depending on the particular customer.

If the customer fails to purchase

the minimum purchase amount in the applicable agreement, the customers will be deprived of the most favorable price treatment for the

following year and rebate rewards for the current year.

For E-Lead Electronic Co.

Ltd., the minimum purchase amounts are as follows, $9.5

million for 2022, $10.5 million for 2023, $12 million for 2024, and $14 million for 2025.

For MultimediaLink Inc., the minimum purchase

amounts are as follows, $9.5 million for 2022, $10.5 million for 2023, $11.5 million for 2024, and $12.5 million for 2025.

Weinview Co., Ltd., the minimum purchase amounts are approximately $63 million for 2022, $70 million for 2023, $78 million for 2024, and

$85 million for 2025.

For Siemens Industrial Automation Products (Chengdu) Co., Ltd., the minimum purchase amounts are approximately $65

million for 2022, $72 million for 2023, $80 million for 2024, and $90 million for 2025.

For Shanghai Sigang Electronics Co., Ltd., the

minimum purchase amounts are approximately $65 million for 2022, $70 million for 2023, $75 million for 2024, and $80 million for 2025.

For Canon (Suzhou) Ltd., the minimum purchase amounts are approximately

$53 million for 2022, $60 million for 2023, $70 million for 2024, and $80 million for 2025.

2019, our PRC subsidiary has supplemental agreements to our sales framework agreements with five (5) customers, namely (1) MultimediaLink

Inc., (2) Shenzhen Soling Industrial Co., Ltd., (3) E-Lead Electronic Co.

Ltd., (4) Suzhou Weinview Co., Ltd.

and (5) Omron (Guangzhou)

Automotive Electronics Co., Ltd.

Pursuant to these supplemental agreements, the above five customers were entitled to receive 5% concessions

from the total purchases they made to us.

As a result of these concessions, the above customers received concessions totaling an aggregate

of approximately $0.75 million for the year ended December 31, 2019.

2020, our PRC subsidiary has supplemental agreements to our sales framework agreements with four (4) customers, namely (1) MultimediaLink

Inc., (2) E-Lead Electronic Co.

Ltd., (3) Suzhou Weinview Co., Ltd.

and (4) Omron (Guangzhou) Automotive Electronics Co., Ltd.

to these supplemental agreements, the above four customers were entitled to receive 5% concessions from the total purchases they made

As a result of these concessions, the above customers received concessions totaling an aggregate of approximately $0.95 million

for the year ended December 31, 2020.

of December 31, 2022, other than as provided above, we did not provide any concession to any other customers.

do not typically enter into sales framework agreements with other customers but sell products to them through purchase orders.

key terms of our purchase order typically include the following:

product name, specification, quantity, price, order amount and delivery date are specified in each order.

method and packaging requirements are specified in each order

terms are specified in each order.

of order terms by customers in some orders.

terms in some orders.

Vtouch is obligated to provide 1) products per the specific requirements of the orders, and 2) unconditional defect warranty for our

Any violation of the order terms may result in termination of the orders or replacement of our products.

the years ended December 31, 2023 and 2022, we did not provide any extended payment terms to any of our customers.

Our customers are

required to make full payment within three to five months from delivery date, although our typical payment term is 180 days from delivery.

As a result of the COVID-19 outbreak in January 2020, collection activities from some of our customers affected by the pandemic resulted

in longer payment terms.

We impliedly granted extended payment terms until December 31, 2020 to some of our customers.

As of December

31, 2020, we collected all overdue accounts receivable by the end of this year and resumed our typical payment term.

required to make full payment within three to six months from the delivery date.

As a result of the COVID-19 outbreak in January 2020, collection activities from some of our customers affected by the

pandemic resulted in longer payment terms.

and Marketing

source our customers through multiple channels:

(i) from our own research through Search Engine Optimization (“SEO”) and

outreach, (ii) through referrals from our present customers, (iii) through our websites;

outreach, (ii) through referrals from our present customers, (iii) through our websites, which provide product information for sale,

as well as telephone and email contact information;

and (iv) through industry exhibitions/expos.

main target markets are economically developed countries and regions, including eastern, southern, northern and southwest regions of

China, South Korea, and Germany.

Mainland China, South Korea, and Germany.

We believe that we have established a strong client base, including global well-known institutional

Overseas sales were $11.5 million in 2022 as compared to $13.6 million in 2021.

Overseas sales were approximately $12.1 million in 2023 as compared to $11.5 million in 2022.

target these overseas customers mainly via our online marketing efforts.

In order to market our products, occupy more market share and

secure more quality customer, we frequently participate in, and promote our products at, specific touchscreen technology exhibitions

secure more quality customers, we frequently participate in, and promote our products at, specific touchscreen technology exhibitions

held internationally.

addition to the top five (5) customers, we also have sales framework agreements with our major customers and direct purchase orders with

our other customers.

In the past three years, we have entered into approximately 700 orders under both sales framework agreements and

through direct purchase orders.

key terms of the framework agreements with our major customers have similar terms with our top five (5) customers as above mentioned.

The key terms of the purchase order provide the following:

product name, specification, quantity, price, order amount and delivery date are specified in each order.

method and packaging requirements are specified in each order

terms are specified in each order.

of order terms by customers in some orders.

terms in some orders.

to the purchaser orders, either through frame agreements or direct orders, our PRC subsidiary is obligated to provide 1) products per

the specific requirements of the orders, and 2) unconditional defect guaranty for our products.

Any violation of the order terms may

result in termination of the orders or replacement of our products.

of the date of this Annual Report, our PRC subsidiary has never violated any framework agreements or purchase orders and therefore never

incurred any economic losses as a result of our agreements;

no penalty has ever been incurred by us due to our delay of delivering products

and our PRC subsidiary has always complied with all terms set forth in the frame agreements and purchase orders.

the year ended December 31, 2022, the revenues generated from our domestic customers amounted to approximately $26.4 million, constituting

approximately 69.7% of our total revenues, with overseas customers accounting for approximately $11.5 million, constituting approximately

30.3% of our total revenues, respectively.

For the year ended December 31, 2021, the revenues generated from our domestic customers amounted

to approximately $27.2 million, constituting approximately 66.7% of our total revenues, with overseas customers accounting for approximately

$13.6 million, constituting approximately 33.3% of our total revenues, respectively..

PRC subsidiary has no supply agreements with our suppliers.

We can utilize any supplier we determine and there are no minimum purchase

requirements when we place orders with our suppliers.

products are produced to order and are marketed directly by our own sales personnel.

We do not rely on distributors to sell our

the year ended December 31, 2023, the revenues generated from our domestic customers amounted to approximately $27.6 million,

constituting approximately 69.6% of our total revenues, with overseas customers accounting for approximately $12.1 million, constituting approximately 30.4% of our total revenues, respectively.

ended December 31, 2022, the revenues generated from our domestic customers amounted to approximately $26.4 million,

constituting approximately 69.7% of our total revenues, with overseas customers accounting for approximately $11.5 million, constituting approximately 30.3% of our total revenues, respectively.

Sichuan Vtouch does not typically enter into supply agreements with our suppliers.

We can utilize any supplier we determine and there are no minimum

purchase requirements when we place orders with our suppliers.

place purchase orders with suppliers of raw materials for the production of our products.

In the past three years, our PRC subsidiary

has entered into over 4,000 purchase orders.

The general terms of the purchase order include

product name, specification, quantity, price, order amount and delivery date are specified in each order.

method, packaging, inspection, breach terms and dispute resolution are determined in accordance with each order.

terms are specified in each order.

products supplied must adhere to the nationally prescribed quality standards or industry standards.

Each product order must be accompanied

by the supplier’s product quality certification.

supplier will unconditionally accept returns and refund in full the purchase price for the products or make replacements if the products

supplied do not meet industry or nationally prescribed quality standards, are damaged or significantly different than the same product.

of December 31, 2022, we have a total number of 113 suppliers.

We do not consider any of our suppliers to be material to our business

and we can utilize any supplier we determine at our sole discretion.

Although we can utilize any supplier we determine, we believe that

we established healthy and stable relationships with our significant suppliers.

The Company purchases its raw materials through various

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

accounted for approximately 47.2% (four suppliers) and 11.2% (one supplier) of the Company’s total raw material purchases for the

years ended December 31, 2022 and 2021, respectively.

Our PRC subsidiary does not have supply agreements with any of them and all of

our raw material procurement with them are processed through our PRC subsidiary’s purchase orders.

There are no minimum purchase

requirements with any of our suppliers, including these three significant ones.

purchase order forms with our significant suppliers contain the following identical material terms:

product name, specification, quantity, price, order amount and delivery date are specified in each order.

method, location and transportation fee arrangements, packaging, payment terms, breach terms and dispute resolution are specified

in each order.

are responsible for shipment fees and all risks of products in transit.

standards are specified in each order.

The products supplied must adhere to the nationally prescribed quality standards or industry

standards, or sample specifications confirmed by the parties.

The Company is entitled to request replacement or order cancellation

if the supplied raw materials fail to pass the inspection.

for force majeure, any party in breach of the order terms is obligated to pay 20% of the contract amount as liquidated damages.

specifications for product name, quantity, price, order amount, and delivery date, as well as delivery methods, packaging, inspection

procedures, breach terms, and dispute resolution, all tailored to each order.

Payment terms are also specified in each order.

Additionally,

all products must meet nationally or industry-prescribed quality standards, with each order requiring a supplier’s quality certification.

The supplier must unconditionally accept returns and either refund the purchase price in full or provide replacements if the products

do not meet the required quality standards, are damaged, or significantly differ from what was ordered.

do not consider any of our suppliers to be material to our business and we can utilize any supplier we determine at our sole

Although we can utilize any supplier we determine, we believe that we have established healthy and stable relationships

with our significant suppliers.

We purchase our raw materials through various suppliers.

Raw material purchases from one and four suppliers, each

of which individually exceeded 10% of the Company’s total raw material purchases, accounted for approximately 13.3% and 47.2% of

the Company’s total raw material purchases for the year ended December 31, 2023 and 2022, respectively.

general terms of the purchase order include specifications for product name, quantity, price, order amount, and delivery date, as well

as delivery methods, packaging, inspection procedures, breach terms, and dispute resolution, all tailored to each order.

Payment terms

are also defined per order.

Additionally, all products must meet nationally or industry-prescribed quality standards, with each order

requiring a supplier’s quality certification.

The supplier must unconditionally accept returns and either refund the purchase price

in full or provide replacements if the products do not meet the required quality standards, are damaged, or significantly differ from

what was ordered.

Production and Quality Control

Company has adopted a made-to-order production model as follows:

2 unchanged sentences

Systems (QMS) standard.

order to the maintain product safety and a high standard of product quality, the Company implements a strict set of quality control policies

order to maintain product safety and a high standard of product quality, the Company implements a strict set of quality control policies

and inspection protocols.

2 unchanged sentences

Their management guidelines along with key company quality policies are set out below:

Company has strict production standards in place that governs what constitutes acceptable quality for its products.

Company has strict production standards in place that govern what constitutes acceptable quality for its products.

This ensures that

8 unchanged sentences

and anti-saline solution and anti-corrosion and Anti interference

products are inspected before they are delivered and sold to our customers.

products are inspected before they are delivered to our customers.

All products must pass the following inspections:

9 unchanged sentences

are inspected to determine whether damage or physical change is caused by exposure to high and low temperatures.

party organizations are engaged to conduct independent testing for hazardous substances.

Internal teams will conduct independent testing for hazardous substances.

The products are also tested for their corrosive

resistance to saline solutions.

Company’s products are produced to order and are marketed directly by its own sales personnel.

The Company does not rely on distributors

to sell its products.

is no significant seasonality in our business.

consists of raw materials, work-in-process and finished goods.

Because a large percentage of the Company’s orders require products

to be shipped in the same quarter in which the order was received, and because orders in the inventory may be canceled and delivery schedules

may be changed, the Company’s inventory at any particular date is not necessarily indicative of actual sales for any succeeding

and Development

4 unchanged sentences

in order to protect our intellectual property rights.

As of the date of this Annual Report, we have one registered trademark in mainland

China and eight registered patents in the PRC under our former PRC subsidiary, Sichuan Wetouch.

forth below is a detailed description of our current trademarks:

February 24, 2021, the trademark “WeTouch” registered with the Trademark Office of China National Intellectual Property Administration

(“Trademark Office”) was assigned from Sichuan Wetouch to Sichuan Vtouch with the Application No.20210000091399, pending

assignment approval of Trademark Office.

forth below is a detailed description of our registered patents under our former PRC subsidiary, Sichuan Wetouch, which we are currently

in the process of assigning to our PRC subsidiary, Sichuan Vtouch:

Certificate No.

Application Date

ZL201420086995.3

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