UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2024

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____________ to ____________

 

Commission file number: 001-36055

 

BAIYU HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   45-4077653
(State or other jurisdiction of
incorporation or organization)		   (I.R.S. Employer
Identification No.)

 

Room 3707. Jingji Binhe Times Building, Binhe
Avenue, Futian District
Shenzhen, Guangdong, PRC		   518000
(Address of principal executive offices)   (Zip Code)

 

+86 (0755) 82792111

(Registrant’s telephone number, including area code)

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.001   BYU   Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
    Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of November 13, 2024, 49,945,235 shares of the Company’s Common Stock, $0.001 par value per share, were issued and outstanding.

 

 

 

 

 

 

PART 1. FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

BAIYU HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2024 and December 31, 2023

(Expressed in U.S. dollars, except for the number of shares)

 

   September 30,   December 31, 
   2024   2023 
ASSETS        
Current Assets        
Cash and cash equivalents  $327,318   $1,516,358 
Loans receivable from third parties   301,335,694    240,430,865 
Inventories, net   278,129    259,806 
Other current asset   13,071,773    10,134,829 
Total current assets   315,012,914    252,341,858 
           
Non-Current Assets          
Plant and equipment, net   23,250    32,090 
Goodwill   159,003,547    157,542,081 
Intangible assets, net   39,705,485    45,285,617 
Right-of-use assets, net   15,300    83,375 
Total non-current assets   198,747,582    202,943,163 
           
Total Assets  $513,760,496   $455,285,021 
           
LIABILITIES AND EQUITY          
Current Liabilities          
Accounts payable   603    
-
 
Bank borrowings   997,492    1,057,648 
Third party loans payable   499,019    476,627 
Contract liabilities   5,227,543    3,090,201 
Income tax payable   21,319,296    16,187,826 
Lease liabilities   16,186    86,691 
Other current liabilities   7,837,297    6,578,349 
Convertible promissory notes   4,168,304    4,284,622 
Total current liabilities   40,065,740    31,761,964 
           
Non-Current Liabilities          
Deferred tax liabilities   1,708,224    2,256,696 
Due to related parties   38,474,692    38,121,056 
Total non-current liabilities   40,182,916    40,377,752 
Total liabilities   80,248,656    72,139,716 
           
Commitments and Contingencies (Note 17)   
 
    
 
 
           
Equity          
Common stock (par value $0.001 per share, 600,000,000 shares authorized; 49,945,235 and 19,335,220 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively)*   49,945    19,335 
Additional paid-in capital   476,450,077    438,980,687 
Statutory surplus reserve   2,602,667    2,602,667 
Accumulated deficit   (30,641,615)   (39,520,164)
Accumulated other comprehensive loss   (11,031,061)   (16,144,752)
Total BAIYU Shareholders’ Equity   437,430,013    385,937,773 
           
Non-controlling interest   (3,918,173)   (2,792,468)
Total Equity   433,511,840    383,145,305 
Total Liabilities and Equity  $513,760,496   $455,285,021 

 

* On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

 

1

 

 

BAIYU HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

(Expressed in U.S. dollars, except for the number of shares)

 

   For the Three Months Ended
September 30,		   For the Nine Months Ended
September 30,		 
   2024   2023   2024   2023 
Revenues                
- Sales of commodity products – third parties  $37,162,036   $33,883,096   $91,714,259   $102,937,623 
- Supply chain management services – third parties   -    28,630    2,811    64,037 
Total revenue   37,162,036    33,911,726    91,717,070    103,001,660 
                     
Cost of revenues                    
- Commodity product sales-third parties   (37,220,150)   (33,916,806)   (91,856,394)   (103,107,066)
- Supply chain management services-third parties   
-
    (18,157)   (16)   (41,540)
Total operating costs   (37,220,150)   (33,934,963)   (91,856,410)   (103,148,606)
                     
Gross loss   (58,114)   (23,237)   (139,340)   (146,946)
                     
Operating expenses                    
Selling, general, and administrative expenses   (2,416,176)   (3,034,313)   (7,487,247)   (14,108,225)
Total operating expenses   (2,416,176)   (3,034,313)   (7,487,247)   (14,108,225)
                     
Net Operating Loss   (2,474,290)   (3,057,550)   (7,626,587)   (14,255,171)
                     
Other income (expenses), net                    
Interest income   7,354,682    5,124,728    20,113,780    14,482,016 
Interest expenses   (115,082)   (129,716)   (344,680)   (352,938)
Amortization of beneficial conversion feature relating to issuance of convertible promissory notes   
-
    (228,250)   (92,552)   (713,292)
Other income, net   4,308    8,227    1,595    7,130 
Total other income, net   7,243,908    4,774,989    19,678,143    13,422,916 
                     
Net income (loss) before income taxes   4,769,618    1,717,439    12,051,556    (832,255)
                     
Income tax expenses   (1,596,361)   (1,037,781)   (4,298,712)   (2,875,040)
                     
Net income (loss)   3,173,257    679,658    7,752,844    (3,707,295)
Less: Net loss attributable to non-controlling interests   (366,205)   (382,556)   (1,125,705)   (1,166,557)
Net income (loss) attributable to BAIYU Holdings, Inc.’s Stockholders’   3,539,462    1,062,214    8,878,549    (2,540,738)
                     
Comprehensive income (loss)                    
Net income (loss)   3,173,257    679,658    7,752,844    (3,707,295)
Foreign currency translation adjustments   10,429,678    2,156,075    5,113,691    (12,025,878)
Comprehensive income (loss)  $13,602,935   $2,835,733   $12,866,535   $(15,733,173)
                     
Less: Total comprehensive loss attributable to non-controlling interests   (366,205)   (382,556)   (1,125,705)   (1,166,557)
Comprehensive income (loss) attributable to BAIYU Holdings, Inc.’s Stockholders  $13,969,140   $3,218,289   $13,992,240   $(14,566,616)
                     
Income (loss) per share - basic and diluted                    
Continuing Operation- income (loss) per share – basic*  $0.08   $0.23   $0.47   $(1.21)
Continuing Operation- income (loss) per share –diluted*  $0.07   $0.17   $0.35   $(0.93)
Weighted Average Shares Outstanding-Basic*   38,782,001    3,016,281    16,671,646    3,074,862 
Weighted Average Shares Outstanding- Diluted*   44,146,337    3,948,068    22,035,982    4,006,649 

 

* On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

 

2

 

 

BAIYU HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in U.S. dollars, except for the number of shares)

 

   Common Stock   Additional
paid-in		   Accumulated   Surplus   Accumulated
other
comprehensive		   Non-
controlling		   Total 
   Shares   Amount   capital   Deficit   Reserve   Income (loss)   interests   Equity 
Balance as of December 31, 2022   2,134,842   $2,135   $344,400,599   $(38,800,375)   2,602,667   $(8,984,925)  $(1,245,932)  $297,974,169 
Issuance of common stocks in connection with private placements   1,260,000    1,260    52,148,740    
-
    
-
    
-
    
-
    52,150,000 
Issuance of common stocks pursuant to exercise of convertible promissory notes   124,427    124    2,877,091    
-
    
-
    
-
    
-
    2,877,215 
Issuance of common stocks pursuant to ATM transaction   13,786    14    559,059    
-
    
-
    
-
    
-
    559,073 
Issuance of common stock pursuant to stock incentive stock plan   220,000    220    5,697,780    
-
    
-
    
-
    
-
    5,698,000 
Beneficial conversion feature relating to issuance of convertible promissory notes   -    
-
    913,000    
-
    
-
    
-
    
-
    913,000 
Net loss   -    
-
    
-
    (2,540,738)   
-
    
-
    (1,166,557)   (3,707,295)
Foreign currency translation adjustments   -    
-
    
-
    
-
    
-
    (12,025,878)        (12,025,878)
Balance as of September 30, 2023   3,753,055   $3,753   $406,596,269   $(41,341,113)   2,602,667   $(21,010,803)  $(2,412,489)  $344,438,284 
                                         
Balance as of December 31, 2023   19,335,220   $19,335   $438,980,687   $(39,520,164)   2,602,667   $(16,144,752)  $(2,792,468)  $383,145,305 
Issuance of common stocks in connection with private placements   30,000,000    30,000    36,870,000    
-
    
-
    
-
    
-
    36,900,000 
Issuance of common stocks pursuant to exercise of convertible promissory notes   610,015    610    599,390    
-
    
-
    
-
    
-
    600,000 
Net income (loss)   -    
-
    
-
    8,878,549    
-
    
-
    (1,125,705)   7,752,844 
Foreign currency translation adjustments   -    
-
    
-
    
-
    
-
    5,113,691    -    5,113,691 
Balance as of September 30, 2024   49,945,235   $49,945   $476,450,077   $(30,641,615)   2,602,667   $(11,031,061)  $(3,918,173)  $433,511,840 

 

* On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

 

3

 

 

BAIYU HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in U.S. dollars, except for the number of shares)

 

   Common Stock   Additional
paid-in		   Accumulated   Surplus   Accumulated
other
comprehensive		   Non-
controlling		   Total 
   Shares   Amount   capital   Deficit   Reserve   Income (loss)   interests   Equity 
Balance as of June 30, 2023   3,128,149   $3,128   $396,346,894   $(42,403,327)   2,602,667   $(23,166,878)  $(2,029,933)  $331,352,551 
Issuance of common stocks in connection with private placements (in Shares)   560,000    560    9,799,440    
-
    
-
    
-
    
-
    9,800,000 
Issuance of common stocks pursuant to exercise of convertible promissory notes   64,906    65    449,935    
-
    
-
    
-
    
-
    450,000 
Net income (loss)   -    
-
    
-
    1,062,214    
-
    
-
    (382,556)   679,658 
Foreign currency translation adjustments   -    
-
    
-
    
-
    
-
    2,156,075    -    2,156,075 
Balance as of September 30, 2023   3,753,055   $3,753   $406,596,269   $(41,341,113)   2,602,667   $(21,010,803)  $(2,412,489)  $344,438,284 
                                         
Balance as of June 30, 2024   49,945,235   $49,945   $476,450,077   $(34,181,077)   2,602,667   $(21,460,739)  $(3,551,968)  $419,908,905 
Net income (loss)   -    
-
    
-
    3,539,462    
-
    
-
    (366,205)   3,173,257 
Foreign currency translation adjustments   -    
-
    
-
    
-
    
-
    10,429,678    -    10,429,678 
Balance as of September 30, 2024   49,945,235   $49,945   $476,450,077   $(30,641,615)   2,602,667   $(11,031,061)  $(3,918,173)  $433,511,840 

 

* On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

 

4

 

 

BAIYU HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2024 and 2023

(Expressed in U.S. dollar)

 

   For the Nine Months Ended
September 30,		 
   2024   2023 
Cash Flows from Operating Activities:        
Net income (loss)  $7,752,844   $(3,707,295)
Adjustments to reconcile net income (loss) to net cash used in operating activities:          
Depreciation of plant and equipment   9,488    6,289 
Amortization of intangible assets   6,634,441    6,002,628 
Amortization of right of use assets   68,075    88,416 
Amortization of discount on convertible promissory notes   66,667    200,000 
Amortization of beneficial conversion feature relating to issuance of convertible promissory notes   92,552    713,292 
Interest expense for convertible promissory notes   324,463    245,506 
Deferred tax liabilities   (548,472)   (569,635)
Share-based payment stock to service providers   
-
    5,698,000 
Inventories impairment   
-
    (16,818)
Inventories   (18,323)   195,620 
Loans receivable from third parties   (58,674,429)   
-
 
Other current assets   (140,962)   (9,754,421)
Prepayments   (639,788)   (3,297,177)
Contract liabilities   2,137,342    2,747,384 
Due from third parties   (2,150,700)   (275,930)
Due from related parties   353,636    (1,963,576)
Accounts payable   603    425,930 
Income tax payable   5,131,470    3,444,639 
Other current liabilities   1,258,948    941,335 
Lease liabilities   (70,505)   (88,281)
Due to third party loans payable   22,392    17,913 
Net cash (used in)/provided by operating activities   (38,390,258)   1,053,819 
Cash Flows from Investing Activities:          
Purchases of plant and equipment   
-
    (34,733)
Payment made on loans to third parties   
-
    (122,971,023)
Proceeds from loans of third parties   
-
    58,413,241 
Investments in other investing activities   (5,494)   (58,950)
Net cash used in investing activities   (5,494)   (64,651,465)
           
Cash Flows from Financing Activities:          
Repayments made on loans to third parties   
-
    69,995 
Proceeds from issuance of common stock under ATM transaction   
-
    559,073 
Proceeds from issuance of common stock under private placement transactions   36,900,000    42,350,000 
Proceeds from convertible promissory notes   
-
    13,025,243 
Net cash provided by financing activities   36,900,000    56,004,311 
           
Effect of exchange rate changes on cash and cash equivalents   306,712    8,140,537 
           
Net (decrease)/increase in cash and cash equivalents   (1,189,040)   547,202 
Cash and cash equivalents at beginning of period   1,516,358    893,057 
Cash and cash equivalents at end of period  $327,318   $1,440,259 
           
Supplemental Cash Flow Information          
Cash paid for interest expenses  $809   $38,918 
           
Supplemental disclosure of non-cash investing and financing activities          
Right-of-use assets obtained in exchange for operating lease obligations   
-
    58,617 
Issuance of common stocks in connection with conversion of convertible promissory notes  $600,000   $13,590,215 

 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

 

5

 

 

1. ORGANIZATION AND BUSINESS DESCRIPTION

 

BAIYU Holding, Inc. is a Delaware corporation, incorporated under the laws of the state of Delaware.

 

The Company primarily conducts business through Shenzhen Baiyu Jucheng Data Technology Co., Ltd., Shenzhen Qianhai Baiyu Supply Chain Co., Ltd., Hainan Jianchi Import and Export Co., Ltd., and Shenzhen Tongdow Internet Technology Co., Ltd. to offer the commodity trading business and supply chain management services to customers in the PRC. Supply chain management services consist of loan recommendation services and commodity product distribution services.

 

Name   Background   Ownership
HC High Summit Holding Limited (“HC High BVI”)  

A BVI company

Incorporated on March 22, 2018

A holding company

   100% owned by the Company
         
TD Internet of Things Technology Company Limited (“TD Internet Technology”) (Formerly Named: Tongdow Block Chain Information Technology Company Limited)  

A Hong Kong company

Incorporated on February 14, 2020

A holding company

   100% owned by HC High BVI 
         
Hainan Baiyu Cross-border E-commerce Co., Ltd. (“Hainan Baiyu”)  

A Hong Kong company

Incorporated on June 19, 2002

A holding company

   WFOE, 100% owned by Tongdow HK
         
Zhong Hui Dao Ming Investment Management Limited (“ZHDM HK”)  

A Hong Kong company

Incorporated on June 19, 2002

A holding company

   100% owned by HC High BVI
         
Hong Kong Tongyuan Energy Storage Smart Electric Co., Ltd (“Tongdow HK”) (Formerly Named: Tongdow E-trade Limited)  

A Hong Kong company

Incorporated on November 25, 2010

A holding company

   100% owned by HC High BVI
         
Shanghai Jianchi Supply Chain Co., Ltd. (“Shanghai Jianchi”)  

A PRC company and deemed a wholly foreign owned enterprise (“WFOE”)

Incorporated on April 2, 2020

Registered capital of $10 million

A holding company

   WFOE, 100% owned by TD Internet Technology
         
Tongdow (Hainan) Data Technology Co., Ltd. (“Tondow Hainan”)  

A PRC limited liability company

Incorporated on July 16, 2020

Registered capital of $1,417,736 (RMB10 million)  

   A wholly owned subsidiary of Shanghai Jianchi
         
Hainan Jianchi Import and Export Co., Ltd. (“Hainan Jianchi”)  

A PRC limited liability company

Incorporated on December 21, 2020

Registered capital of $7,632,772 (RMB50 million) with registered capital of $0 (RMB0) paid-up

   A wholly owned subsidiary of Shanghai Jianchi

 

6

 

 

Shenzhen Baiyu Jucheng Data Techonology Co., Ltd. (“Shenzhen Baiyu Jucheng”)  

A PRC limited liability company

Incorporated on December 30, 2013

Registered capital of $1,417,736 (RMB10 million) with registered capital fully paid-up

   VIE of Hao Limo Technology (Beijing) Co., Ltd. before June 25, 2020, and a wholly owned subsidiary of Shanghai Jianchi
         
Shenzhen Qianhai Baiyu Supply Chain Co., Ltd. (“Qianhai Baiyu”)  

A PRC limited liability company

Incorporated on August 17, 2016

Registered capital of $4,523,857 (RMB30 million) with registered capital of $736,506 (RMB5 million) paid-up

   A wholly owned subsidiary of Shenzhen Baiyu Jucheng
         
Shenzhen Tongdow Internet Technology Co., Ltd. (“Shenzhen Tongdow”)  

A PRC limited liability company

Incorporated on November 11, 2014

Registered capital of $1,628,320 (RMB10 million) with registered capital of $1,628,320 (RMB10 million) paid-up

   VIE of Shenzhen Baiyu Jucheng
         
Yangzhou Baiyu Venture Capital Co. Ltd. (“Yangzhou Baiyu Venture”)  

A PRC limited liability company

Incorporated on April 19, 2021

Registered capital of $30 million with registered capital of $7 million paid-up

   WFOE, 100% owned by Tongdow HK
         
Yangzhou Baiyu Cross-broder E-commerce Co., Ltd. (“Yangzhou Baiyu E-commerce”)  

A PRC limited liability company

Incorporated on May 14, 2021

Registered capital of $30 million (RMB200 million) with registered capital of $7 million (RMB48 million) paid-up

   100% owned by Yangzhou Baiyu Venture
         
Zhejiang Baiyu Lightweight New Material Co., Ltd. (“Zhejiang Baiyu”)    

 A PRC limited liability company

Incorporated on August 5, 2022

Registered capital of $1,483,569 (RMB10 million)

   100% owned by Yangzhou Baiyu E-commerce
         
Baiyu International Supply Chain PTE. LTD    A Singapore company Incorporated on June 28, 2023   100% owned by HC High BVI
         
Beijing Baiyu Jucheng Technology Co., LTD   

A PRC limited liability company Incorporated on January 19, 2024

Registered capital of $140,515 (RMB1 million)

   100% owned by Qianhai Baiyu
         
Electra New Energy Vehicle Inc   A Delaware, USA corporation company incorporated on April 10, 2024   100% owned by HC High BVI

 

 

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The following diagram illustrates our corporate structure as of September 30, 2024.

 

 

 

(1) A variable interest entity.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

(a) Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

 

The unaudited interim condensed consolidated financial information as of September 30, 2024 and for the nine months ended September 30, 2024 and 2023 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual condensed consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K for the fiscal year ended December 31, 2023 previously filed with the SEC on March 22, 2024.

 

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed consolidated financial position as of September 30, 2024 and its unaudited condensed consolidated results of operations for the nine months ended September 30, 2024 and 2023, and its unaudited condensed consolidated cash flows for the nine months ended September 30, 2024 and 2023, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the fiscal year or any future period.

 

8

 

 

(b) Use of estimates

 

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. Significant accounting estimates reflected in the financial statements include: (i) useful lives and residual value of long-lived assets; (ii) the impairment of long-lived assets and investments; (iii) the valuation allowance of deferred tax assets; (iv) estimates of allowance for doubtful accounts, including loans receivable from third parties and related parties; (v) valuation of Inventory; and (vi) contingencies and litigation.

 

(c) Foreign currency translation

 

The Company’s financial information is presented in U.S. dollars (“USD”). The functional currency of the Company is the Chinese Yuan Renminbi (“RMB”), the currency of PRC. Any transactions which are denominated in currencies other than RMB are translated into RMB at the exchange rate quoted by the People’s Bank of China prevailing at the dates of the transactions, and exchange gains and losses are included in the statements of operations as foreign currency transaction gain or loss. The consolidated financial statements of the Company have been translated into U.S. dollars in accordance with ASC 830, Foreign Currency Matters. The financial information is first prepared in RMB and then translated into U.S. dollars at period-end exchange rates for assets and liabilities and average exchange rates for revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

 

(d) Convertible promissory notes

 

Convertible promissory notes are recognized initially at fair value, net of upfront fees, debt discounts or premiums, debt issuance costs and other incidental fees. Upfront fees, debt discounts or premiums, debt issuance costs and other incidental fees are recorded as a reduction of the proceeds received and the related accretion is recorded as interest expense in the consolidated income statements over the estimated term of the facilities using the effective interest method.

 

(e) Beneficial conversion feature

 

The Company evaluates the conversion feature to determine whether it was beneficial as described in ASC 470-20. The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible notes payable and may not be settled in cash upon conversion, is treated as a discount to the convertible notes payable. This discount is amortized over the period from the date of issuance to the date the notes are due using the effective interest method. If the notes payable are retired prior to the end of their contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the shares of common stock at the commitment date to be received upon conversion.

 

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(f) Recent accounting pronouncement

 

In November 2023, the FASB issued guidance to enhance disclosure of expenses of a public entity’s reportable segments. The new guidance requires a public entity to disclose: (1) on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, (2) on an annual and interim basis, an amount for other segment items (the difference between segment revenue less the significant expenses disclosed under the significant expense principle and each reported measure of segment profit or loss), including a description of its composition, (3) on an annual and interim basis, information about a reportable segment’s profit or loss and assets previously required to be disclosed only on an annual basis, and (4) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and how to allocate resources. The new guidance also clarifies that if the CODM uses more than one measure of a segment’s profit or loss, one or more of those measures may be reported and requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this update and all existing segment disclosures. The guidance is effective for the current fiscal year 2024 annual reporting, and in the first quarter of 2025 for interim period reporting, with early adoption permitted. Upon adoption, this guidance should be applied retrospectively to all prior periods presented. We do not expect the adoption of this accounting standard to have an impact on our Consolidated Financial Statements.

 

In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures. On an annual basis, the new guidance requires a public entity to disclose: (1) specific categories in the rate reconciliation, (2) additional information for reconciling items that are equal to or greater than 5% of the amount computed by multiplying income (or loss) from continuing operations before income tax expense (or benefit) by the applicable statutory income tax rate, (3) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, with foreign taxes disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5% of total income taxes paid, (4) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (5) income tax expense (or benefit) from continuing operations disaggregated between federal (national), state and foreign. The guidance is effective for fiscal year 2025 annual reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. We do not expect the adoption of this accounting standard to have an impact on our Consolidated Financial Statements but will require certain additional disclosures.

 

In July 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The adoption of this guidance did not have a material impact on its financial position, results of operations and cash flows.

 

In December 2023, the FASB issued ASU 2023-08: Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60). For annual and interim reporting periods, the amendments in this Update require that an entity, including an entity that is subject to industry-specific guidance, disclose the following information: (1) The name, cost basis, fair value, and number of units for each significant crypto asset holding and the aggregate fair values and cost bases of the crypto asset holdings that are not individually significant, (2) For crypto assets that are subject to contractual sale restrictions, the fair value of those crypto assets, the nature and remaining duration of the restriction(s), and the circumstances that could cause the restriction(s) to lapse.

 

Other accounting standards that have been issued or proposed 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.

 

10

 

 

3. LOANS RECEIVABLE FROM THIRD PARTIES

 

   September 30,
2024		   December 31,
2023		 
Loans receivable from third parties  $301,335,694   $240,430,865 
           

 

As of September 30, 2024, the Company has fourteen loan agreements compared with thirteen loan agreements on December 31, 2023. The Company provided loans aggregating $109,311,498 for the purpose of making use of idle cash and maintaining long-term customer relationship and collected $51,521,185 during the nine months ended September 30, 2024. These loans will mature from July 2024 through July 2025, and charge an interest rate of 10.95% per annum on these customers. The company has the right to pledge account receivable or inventory.

 

Interest income of $20,113,673 and $14,481,640 was accrued for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31, 2023, the Company recorded an interest receivable of $8,194,485 and $5,931,541 as reflected under “other current assets” in the condensed consolidated balance sheets.

 

As of September 30, 2024 and December 31, 2023, there was no allowance recorded as the Company considers all of the loans receivable fully collectible.

 

4. INVENTORIES, NET

 

The Company’s inventories consist of aluminum ingots, etc., that were purchased from third parties for resale to third parties. Inventories consisted of the following:

 

   September 30,
2024		   December 31,
2023		 
Aluminum ingots  $278,129   $259,806 
Inventories, net  $278,129   $259,806 

 

For the nine months ended September 30, 2024, the Company did not accrue or charge back any impairment as the impaired inventories have been sold.

 

5. OTHER CURRENT ASSETS

 

   September 30,
2024		   December 31,
2023		 
Other current assets:        
Deposit  $40,608   $35,888 
Interest receivables   8,194,485    5,931,541 
Prepayments   4,728,998    4,089,210 
Others   107,682    78,190 
Total  $13,071,773   $10,134,829 

 

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6. PLANT AND EQUIPMENT, NET

 

   September 30,
2024		   December 31,
2023		 
Cost:        
Office equipment  $44,399   $43,999 
Accumulated depreciation:          
Office equipment  $(21,149)  $(11,909)
Plant and equipment, net  $23,250   $32,090 

 

Depreciation expense was $9,488, and currency translation difference was negative $248 for the nine months ended September 30, 2024. Depreciation expense was $6,289, and currency translation difference was negative $231 for the nine months ended September 30, 2023.

 

7. GOODWILL

 

Changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2024, and years ended December 31, 2023 were as follows:

 

   Acquisition
of Qianhai
Baiyu		   Contractual
arrangement
with
Tongdow Internet
Technology		   Total 
             
Balance as of December 31, 2022  $65,022,402   $95,191,148   $160,213,550 
Foreign currency translation adjustments   (1,084,211)   (1,587,258)   (2,671,469)
Balance as of December 31, 2023   63,938,191    93,603,890    157,542,081 
Foreign currency translation adjustments  $593,134   $868,332   $1,461,466 
Balance as of September 30, 2024   64,531,325    94,472,222    159,003,547 

 

Based on an assessment of the qualitative factors, management determined that it is more-likely-than-not that the fair value of the reporting unit is in excess of its carrying amount. Therefore, management concluded that it was not necessary to proceed with the two-step goodwill impairment test. No impairment loss or other changes were recorded, except for the influence of foreign currency translation for the nine months ended September 30, 2024 and the year ended December 31, 2023.

 

8. INTANGIBLE ASSETS

 

   September 30,
2024		   December 31,
2023		 
Customer relationships  $18,727,200   $18,555,071 
Software copyright   47,452,121    47,015,968 
Total   66,179,321    65,571,039 
           
Less: accumulative amortization   (26,473,836)   (20,285,422)
Intangible assets, net  $39,705,485   $45,285,617 

 

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The Company’s intangible assets consist of customer relationships and software copyrights. Customer relationships are generally recorded in connection with acquisitions at their fair value, one kind of software copyright was purchased in March 2021 and the other kind of software copyright was recorded in connection with the contractual arrangement with Shenzhen Tongdow Internet Technology Co., Ltd. in October 2022. Intangible assets with estimable lives are amortized, generally on a straight-line basis, over their respective estimated useful lives: 6.2 years for customer relationships, 6.83 years for one kind of software copyright purchased in March 2021 and 10 years for the other kind of software copyright recorded in connection with the contractual arrangement with Shenzhen Tongdow Internet Technology Co., Ltd, to their estimated residual values and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

 

Amortization expense for the nine months ended September 30, 2024 and 2023 was $6,634,441 and $6,002,628, respectively. The currency translation difference was negative $446,027 and $514,654 for the nine months ended September 30, 2024 and 2023, respectively.

 

No impairment loss was made against the intangible assets during the nine months ended September 30, 2024.

 

The estimated amortization expense for these intangible assets in the next five years and thereafter is as follows:

 

Period ending September 30, 2024:  Amount 
current year  $6,000,233 
2025   8,000,310 
2026   6,481,888 
2027   4,616,921 
2028   4,274,966 
Thereafter   10,331,167 
Total:  $39,705,485 

 

9. BANK BORROWINGS

 

Bank borrowings represent the amounts due to Baosheng County Bank that are due within one year. As of September 30, 2024 and December 31, 2023, bank loans consisted of the following: 

 

   September 30,
2024		   December 31,
2023		 
Short-term bank loans:        
Loan from Baosheng County Bank  $997,492   $988,324 
Loan from Bank of Communications   
-
    69,324 
Total  $997,492   $1,057,648 

 

In August 2022, Qianhai Baiyu entered into five loan agreements with Baosheng County Bank to borrow a total amount of RMB7.0 million as working capital for a one-year term, maturing in August 2023. In August 2023, the company and the bank renewed the contract, extending the loan term to August 2025. The five loans bear a fixed interest rate of 7.8% per annum and are guaranteed by Shenzhen Herun Investment Co., Ltd, Li Hongbin and Wang Shuang.

 

In August 2023, Qianhai Baiyu entered into a loan agreement with the Bank of Communications, borrowing a total of RMB 0.49 million as one-year working capital. This loan carried a fixed interest rate of 4.15% per annum and was fully repaid on April 2, 2024. 

 

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10. LEASES

 

The Company leases an office space under non-cancelable operating leases, with a term of 24 months. The Company considers renewal or termination options that are reasonably certain to be exercised when determining the lease term and the initial measurement of right of use assets and lease liabilities. The amortization of right of use assets for lease payment is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

 

The Company determines whether a contract is, or contains, a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

 

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 

Supplemental consolidated balance sheet information related to the operating lease was as follows:

 

   September 30,
2024		   December 31,
2023		 
         
Right-of-use assets, net  $15,300   $83,375 
           
Lease Liabilities-current  $16,186   $86,691 
Total  $16,186   $86,691 

 

The weighted average remaining lease terms and discount rates for the operating lease were as follows as of September 30, 2024:

 

Remaining lease term and discount rate:    
Weighted average remaining lease term (years) 
 
 
Weighted average discount rate   4.75%

 

For the nine months ended September 30, 2024 and 2023, the Company charged total amortization of right-of-use assets of $68,075 and $88,416 respectively. For the three months ended September 30, 2024 and 2023, the Company charged total amortization of right-of-use assets of $22,355 and $7,737 respectively.

 

The following is a schedule, by fiscal quarter, of maturities of lease liabilities as of September 30, 2024:

 

Period ended September 30, 2024:   Amount  
current year   $ 18,139  
Total lease payments     18,139  
Less: imputed interest     1,953  
Present value of lease liabilities     16,186  

 

11. OTHER CURRENT LIABILITIES

 

   September 30,
2024		   December 31,
2023		 
Accrued payroll and benefit  $1,828,464   $3,210,615 
Other tax payable   5,457,777    3,352,643 
Accrued expenses   550,911    14,949 
Others   145    142 
Total  $7,837,297   $6,578,349 

 

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12. CONVERTIBLE PROMISSORY NOTES

 

   September 30,
2024		   December 31,
2023		 
Convertible promissory notes – principal  $2,443,358   $3,043,358 
Convertible promissory notes – discount   
-
    (159,219)
Convertible promissory notes – interest   1,724,946    1,400,483 
Convertible promissory notes, net  $4,168,304   $4,284,622 

 

On May 6, 2022, the Company entered into a securities purchase agreement with Streeterville Capital, LLC (“Streeterville”), a Utah limited liability company, pursuant to which the Company issued Streeterville a convertible promissory note in the original principal amount of $3,320,000, convertible into shares of Common Stock, $0.001 par value per share, of the Company, for $3,000,000 in gross proceeds. By written consent dated May 10, 2022, as permitted by Section 228 of the Delaware General Corporation Law and Section 8 of Article II of our bylaws, the stockholders who have the authority to vote a majority of the outstanding shares of Common Stock approved the following corporate actions: (i) the entry into a purchase agreement dated as of May 6, 2022 by and between the Company and Streeterville, pursuant to which the Company issued the note dated as of May 6, 2022 to Streeterville and (ii) the issuance of shares of Common Stock in excess of 19.99% of the currently issued and outstanding shares of Common Stock of the Company upon the conversion of the note. The Company settled a convertible promissory note of $375,000 on November 16, 2022, and issued 445,749 shares of the Company’s Common Stock on November 17, 2022. The Company settled convertible promissory notes of $200,000 on January 18, 2023, $200,000 on February 3, 2023, $175,000 on February 8, 2023, $250,000 on February 15, 2023, $250,000 on March 8, 2023, $125,000 on March 24, 2023,$150,000 on September 14, 2023, $200,000 on October 7, 2023 and $175,000 on November 8, 2023, respectively, and issued 4,719, 4,688, 4,102, 5,860, 5,591, 2,913, 3,496, 131,585 and 115,137 shares of the Company’s common stock on January 19, 2023, February 6, 2023, February 8, 2023, February 15, 2023, March 15, 2023, March 29, 2023, September 14, 2023, October 7, 2023 and November 8, 2023, respectively for the year ended December 31, 2023.

 

On March 13, 2023, the Company entered into a securities purchase agreement with Streeterville, pursuant to which the Company issued Streeterville a convertible promissory note in the original principal amount of $3,320,000, convertible into shares of Common Stock, $0.001 par value per share, of the Company, for $3,000,000 in gross proceeds. By written consent dated March 6, 2023, as permitted by Section 228 of the Delaware General Corporation Law and Section 8 of Article II of our bylaws, the stockholders who have the authority to vote a majority of the outstanding shares of Common Stock approved the following corporate actions: (i) the entry into a purchase agreement, with terms substantially the same as the agreement attached in the aforesaid purchase agreement, by and between the Company and Streeterville, pursuant to which the Company issued an unsecured convertible promissory to Streeterville; and (ii) the issuance of shares of Common Stock in excess of 19.99% of the currently issued and outstanding shares of Common Stock of the Company upon the conversion of the note. The Company settled convertible promissory notes of $300,000 on September 7, 2023, $200,000 on October 10, 2023, $175,000 on October 13, 2023, $150,000 on November 16, 2023, $150,000 on December 5, 2023, and $150,000 on December 29, 2023, respectively, and issued 41,829, 41,736, 36,920, 109,075, 109,075, and 137,644, shares of the Company’s common stock on September 12, 2023, October 11, 2023, October 13, 2023, November 20, 2023, December 7, 2023, and December 29, 2023, respectively, for the year ended December 31, 2023. The Company settled convertible promissory notes of $150,000 on February 1, 2024, $150,000 on February 15, 2024 and $150,000 on April 18, 2024, respectively, and issued 160,174, 152,620 and 159,547 shares of the Company’s common stock on February 1, 2024, February 10, 2024, and April 23, 2024, respectively, for the nine months ended September 30, 2024.

 

The above two unsettled convertible promissory notes, issued on May 6, 2022 and March 13, 2023, have a maturity date of 12 months with an interest rate of 10% per annum. The Company retains the right to prepay the note at any time prior to conversion with an amount in cash equal to 125% of the principal that the Company elects to prepay at any time six months after the issue date, subject to maximum monthly redemption amount of $375,000 and $375,000, respectively. On or before the close of business on the third trading day of redemption, the Company should deliver conversion shares via “DWAC” (DTC’s Deposit/Withdrawal at Custodian system). The Company will be required to pay the redemption amount in cash, or chooses to satisfy a redemption in registered stock or unregistered stock, such stock shall be issued at 80% of the average of the lowest “VWAP” (the volume-weighted average price of the Common Stock on the principal market for a particular Trading Day or set of Trading Days) during the fifteen trading days immediately preceding the redemption notice is delivered.

 

For the above two unsettled convertible promissory notes, upon evaluation, the Company determined that the Agreements contained embedded beneficial conversion features which met the definition of Debt with Conversion and Other Options covered under the Accounting Standards Codification topic 470 (“ASC 470”). According to ASC 470, an embedded beneficial conversion feature present in a convertible instrument shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. Pursuant to the agreements, the Company shall recognize embedded beneficial conversion features three months after commitment date of $913,000 and $913,000 respectively. Beneficial conversion features have been recognized into discount on convertible promissory notes and additional paid-in capital and such discount will be amortized in 12 months until the notes will be settled. For the year ended December 31, 2023, the Company recognized the amortization of beneficial conversion feature $218,750 and $820,448 to profit with respect to these two unsettled convertible promissory notes. For the nine months ended September 30, 2024, the Company has recognized the amortization of beneficial conversion feature of $nil and $92,552 to profit for the above two unsettled convertible promissory notes.

 

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13. EQUITY

 

Common stock issued in private placements

 

On January 9, 2023, the Company entered into a certain securities purchase agreement with Ms. Huiwen Hu, an affiliate of the Company, and certain other purchasers who are non-U.S. Persons (as defined in Regulation S under the Securities Act of 1933, as amended), pursuant to which the Company agreed to sell an aggregate of 700,000 shares of its common stock, at a purchase price of $60.5 per share (“January 2023 PIPE”). The gross proceeds to the Company from the January 2023 PIPE were $42.35 million. Since Ms. Huiwen Hu is an affiliate of the Company, the January 2023 PIPE has been approved by the Audit Committee as well as the Board of Directors of the Company.

 

On July 31, 2023, the Company entered into a certain securities purchase agreement with Mr. Wenhao Cui, an affiliate of the Company, and certain other purchasers who are non-U.S. Persons (as defined in Regulation S under the Securities Act of 1933, as amended), pursuant to which the Company agreed to sell an aggregate of 560,000 shares of its common stock, at a purchase price of $17.50 per share (“August 2023 PIPE”). The gross proceeds to the Company from the January 2023 PIPE were $9.8 million.

 

On November 16, 2023, the Company entered into a certain securities purchase agreement with certain purchasers who are non-U.S. Persons (as defined in Regulation S under the Securities Act of 1933, as amended), pursuant to which the Company agreed to sell an aggregate of 15,000,000 shares of its common stock, at a purchase price of $2.09 per share (“November 2023 PIPE”). The gross proceeds to the Company from the November 2023 PIPE were $31.35 million.

 

Solely for accounting purposes, the number of shares and the purchase price per share discussed above have been retroactively restated to reflect the reverse stock split. Please refer to “Note 13 - Reverse Stock Split of Common Stock” for further details.

 

On June 7, 2024, the Company entered into a certain securities purchase agreement with certain purchasers who are non-U.S. Persons (as defined in Regulation S under the Securities Act of 1933, as amended), pursuant to which the Company agreed to sell an aggregate of 30,000,000 shares of its common stock, at a purchase price of $1.23 per share (“June 2024 PIPE”). The gross proceeds to the Company from the June 2024 PIPE were $36.90 million.

 

16

 

 

Common stock issued pursuant to the conversion of convertible promissory notes

 

On March 13, 2023, the Company entered into a securities purchase agreement with Streeterville, pursuant to which the Company issued Streeterville a convertible promissory note in the original principal amount of $3,320,000, convertible into shares of Common Stock, $0.001 par value per share, of the Company, for $3,000,000 in gross proceeds. The Company settled convertible promissory notes issued on March 13, 2023 of $300,000 on September 7, 2023, $200,000 on October 10, 2023, $175,000 on October 13, 2023, $150,000 on November 16, 2023, $150,000 on December 5, 2023, and $150,000 on December 29, 2023, respectively, and issued 41,829, 41,736, 36,920, 109,075, 109,075, and 137,644, shares of the Company’s common stock on September 12, 2023, October 11, 2023, October 13, 2023, November 20, 2023, December 7, 2023, and December 29, 2023, respectively, for the year ended December 31, 2023. The Company settled convertible promissory notes of $150,000 on February 1, 2024, $150,000 on February 15, 2024 and $150,000 on April 18,2024 respectively, and issued 160,174, 152,620 and 159,547 shares of the Company’s common stock on February 1, 2024, February 10, 2024, and April 23, 2024 respectively, for the nine months ended September 30, 2024.

 

Solely for accounting purposes, the number of shares and the purchase price per share have been retroactively restated to reflect the reverse stock split. Please refer to “Note 13 - Reverse Stock Split of Common Stock” for further details.

 

Reverse stock split of common stock

 

On October 30, 2023, The Company completed a 1-for-50 reverse stock split, where every fifty (50) shares of the Company’s pre-split issued and outstanding common stock, par value $0.001 per share, were combined into one (1) share of the Company’s post-split common stock, without any change in par value per share.

 

The reverse stock split applied to the issued shares of the Company on the date of the reverse stock split and does not have any retroactive effect on the Company’s shares prior to that date. However, for accounting purposes only, references to our ordinary shares in this quarterly report are stated as having been retroactively adjusted and restated to give effect to the reverse stock split, as if the reverse stock split had occurred by the relevant earlier date.

 

Share Issuances to Service Providers

 

 For the nine months ended September 30, 2023, the Company issued under its 2023 Stock Incentive Plan a total of 220,000 shares of common stock to certain service providers, and recorded $5,698,000 in stock-based compensation expenses.

 

There were no issuances of securities from the 2023 Stock Incentive Plan for the nine months ended September 30, 2024 and as such, no stock-based compensation expense was recognized for the period.

 

Common stocks issued for exercise of warrants by holders of warrants

 

Warrants

 

A summary of warrants activity for the nine months ended September 30, 2024 was as follows:

 

   Number of
shares		   Weighted
average life		   Weighted
average
exercise
price		   Intrinsic
Value		 
                 
Balance of warrants outstanding as of December 31, 2023   77,093    3.70 years   $7.15    
-
 
Granted   
-
    -    
-
    
-
 
Exercised   
-
    -   $
-
    
-
 
Balance of warrants outstanding as of September 30, 2024   77,093    3.70 years   $7.15    
-
 

 

As of September 30, 2024, the Company had 77,093 shares of warrants, among which 1,093 shares of warrants were issued to two individuals in private placements, and 76,000 shares of warrants were issued in three private placements closed on September 22, 2021.

 

In connection with 76,000 shares of warrants, the Company issued warrants to investors to purchase a total of 76,000 ordinary shares with a warrant term of five (5) years. The warrants have an exercise price of $28.75 per share.

 

The Warrants ended on September 30, 2024 are subject to anti-dilution provisions to reflect stock dividends and splits or other similar transactions, but not as a result of future securities offerings at lower prices. The warrants did not meet the definition of liabilities or derivatives, and as such they are classified as equity.

 

17

 

 

14. INCOME PER SHARE

 

Basic income per share is computed by dividing the net profit or loss by the weighted average number of common shares outstanding during the period. As of September 30, 2024, the principal amount and interest expense of convertible promissory notes are $2,443,358 and $1,724,946. Total obligations of $4,168,304 may be dilutive common shares in the future.

 

The number of warrants is excluded from the computation as the anti-dilutive effect.

 

The following table sets forth the computation of basic and diluted loss per common share for the nine months ended September 30, 2024 and 2023 respectively:

 

   For the Nine Months Ended
September 30,		 
   2024   2023 
Net income (loss)  $7,752,844   $(3,707,295)
           
Weighted Average Shares Outstanding-Basic   16,671,646    3,074,862 
Weighted Average Shares Outstanding-Diluted   22,035,982    4,006,649 
Net income (loss) per share - basic and diluted          
Net income (loss) per share – basic  $0.47   $(1.21)
Net income (loss) per share – diluted  $0.35   $(0.93)

 

15. INCOME TAXES

 

The Enterprise Income Tax Law of the People’s Republic of China (“PRC tax law”), which was effective on January 1, 2008, stipulates those domestic enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%. Under the PRC tax law, companies are required to make quarterly estimate payments based on 25% tax rate; companies that received preferential tax rates are also required to use a 25% tax rate for their installment tax payments. The overpayment, however, will not be refunded and can only be used to offset future tax liabilities.

  

The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits and measures the unrecognized benefits associated with the tax positions. For the nine months ended September 30, 2024, the Company had no unrecognized tax benefits. Due to uncertainties surrounding future utilization, the Company estimates there will not be sufficient future income to realize the deferred tax assets for certain subsidiaries and a VIE. As of September 30, 2024 and December 31, 2023, the Company had deferred tax assets of $11,691,760 and $11,294,960, respectively. The Company maintains a full valuation allowance on its net deferred tax assets as of September 30, 2024 and December 31, 2023.

 

The Company does not anticipate any significant increase in its liability for unrecognized tax benefit within the next 12 months. The Company will classify interest and penalties related to income tax matters, if any, in income tax expense.

 

For the nine months ended September 30, 2024 and 2023, the Company had current income tax expenses of $3,744,060 and $3,444,639, respectively, and deferred income tax expense of $554,652 and benefit of $569,559 in the connection of intangible assets generated from acquisitions.

 

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. The Company is subject to income taxes in the PRC. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. There were no uncertain tax positions as of September 30, 2024 and December 31, 2023, and the Company does not believe that its unrecognized tax benefits will change over the next twelve months.

 

18

 

 

16. RELATED PARTY TRANSACTIONS AND BALANCES

 

1) Nature of relationships with related parties

 

Name   Relationship with the Company
Guangzhou Chengji Investment Development Co., Ltd. (“Guangzhou Chengji”)   Controlled by Mr. Weicheng Pan, who is a former independent director of the Company.
Yunfeihu International E-commerce Group Co., Ltd (“Yunfeihu”)   An affiliate of the Company, over which an immediate family member of Chief Executive Officer owns equity interest and plays the role of director and senior management
Shenzhen Tongdow International Trade Co., Ltd. (“TD International Trade”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Beijing Tongdow E-commerce Co., Ltd. (“Beijing TD”)   Wholly owned by TD E-commerce, which is controlled by an immediate family member of Chief Executive Officer of the Company
Shanghai Tongdow Supply Chain Management Co., Ltd.
(“Shanghai TD”)		   Controlled by an immediate family member of Chief Executive Officer of the Company
Guangdong Tongdow Xinyi Cable New Material Co., Ltd. (“Guangdong TD”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Yangzhou Lishunwu E-commerce Co., Ltd. (Formerly named: Yangzhou Tongdow E-commerce Co., Ltd.)
(“Yangzhou TD”)		   Controlled by an immediate family member of Chief Executive Officer of the Company
Ningbo Xinwurong Supply Chain Management Co., Ltd. (Formerly named: Tongdow (Zhejiang) Supply Chain Management Co., Ltd.)
(“Zhejiang TD”)		   Controlled by an immediate family member of Chief Executive Officer of the Company
Shenzhen Meifu Capital Co., Ltd. (“Shenzhen Meifu”)   Controlled by Chief Executive Officer of the Company
Shenzhen Tiantian Haodian Technology Co., Ltd. (“TTHD”)   Wholly owned by Shenzhen Meifu
Hainan Tongdow International Trade Co., Ltd. (“Hainan TD”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Yunfeihu modern logistics Co., Ltd. (“Yunfeihu Logistics”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Shenzhen Tongdow Jingu Investment Holding Co., Ltd. (“Shenzhen Jingu”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Tongdow E-commerce Group Co., Ltd. (“TD E-commerce”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Katie Ou   Shareholder of BAIYU Holdings Inc.

 

2) Balances with related parties

 

- Due to related party

 

   September 30,
2024		   December 31,
2023		 
TD E-commerce  $38,474,692   $38,121,056 
Total due to related party  $38,474,692   $38,121,056 

 

The amount due to related parties is non-trade in nature, unsecured, non-interest bearing and is not expected to be repaid in the next twelve months.

 

19

 

 

17. COMMITMENTS AND CONTINGENCIES

 

1) Commitments

 

a non-cancellable operating leases

 

The following table sets forth our contractual obligations as of September 30, 2024:

 

   Payment due by September 30 
   Total   2024   2025   2026 
Operating lease commitments for property management expenses under lease agreements  $1,662   $1,662   $
          -
   $
           -
 

 

2) Contingencies

 

None.

 

18. Risks and uncertainties

 

(1) Credit risk

 

Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash and cash equivalents and trade receivables with its customers. The maximum exposure of such assets to credit risk is their carrying amount as of the balance sheet dates. As of September 30, 2024, approximately $82,591 was primarily deposited in financial institutions located in Mainland China, which were uninsured by the government authority. To limit exposure to credit risk relating to deposits, the Company primarily place cash deposits with large financial institutions in China, which management believes are of high credit quality. The Company considers the credit standing of customers when making sales to manage the credit risk. Considering the nature of the business at current, the Company believes that the credit risk is not material to its operations.

 

The Company’s operations are carried out in Mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation, and the extraction of mining resources, among other factors.

 

(2) Liquidity risk

 

The Company is also exposed to liquidity risk which is the risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.

  

(3) Foreign currency risk

 

Substantially all of the Company’s operating activities and the Company’s major assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts.

 

The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Where there is a significant change in value of RMB, the gains and losses resulting from translation of financial statements of a foreign subsidiary will be significantly affected.

 

20

 

 

Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods:

 

   September 30,   December 31, 
   2024   2023 
Balance sheet items, except for equity accounts   7.0176    7.0827 

 

   For the nine months ended
September 30,		 
   2024   2023 
Items in the statements of operations and comprehensive income (loss), and statements of cash flows   7.2043    7.0148 

 

(4) Economic and political risks

 

The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

 

(5) Risks related to industry

 

The Company sells precious products to customers through our industrial relationship. Sales contracts are entered into with each customer. The Company is the principal under the precious metal direct sales model as the Company controls the products with the ability to direct the use of, and obtain all the remaining benefits from the precious metal products substantially before they are sold to its customers. The Company has a single performance obligation to sell metal products to the buyers. The Company estimates the amount of variable consideration, including sales return using the expected value method and includes variable consideration in the transaction price to the extent that it is probable that a significant reversal will not occur. Revenue for precious metal trading under the direct sales model is recognized at a point in time when the single performance obligation is satisfied when the products are delivered to the customer. We are under the risk of the economic environment in general and specific to the precious metal industry and China as well as changes to the existing governmental regulations.

 

Commodity trading in China is subject to seasonal fluctuations, which may cause our revenues to fluctuate from quarter to quarter. We generally experience less user traffic and purchase orders during national holidays in China, particularly during the Chinese New Year holiday season in the first quarter of each year. Consequently, the first quarter of each calendar year generally contributes the smallest portion of our annual revenues. Furthermore, as we are substantially dependent on sales of precious metals, our quarterly revenues and results of operations are likely to be affected by price fluctuation under macroeconomic circumstances these years.

 

As our revenues have grown rapidly in recent years, these factors are difficult to discern based on our historical results, which, therefore, should not be relied on to predict our future performance. Our financial condition and results of operations for future periods may continue to fluctuate. As a result, the trading price of our stock may fluctuate from time to time due to seasonality.

 

19. SUBSEQUENT EVENTS

 

The Company has reviewed its operations for potential disclosure or financial statement impacts related to events occurring after September 30, 2024, but prior to the release of the unaudited consolidated financial statements contained in this quarterly report on Form 10-Q were issued.

 

On October 4, 2024, the Company received a notification letter from the staff at the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the Staff has determined to delist the Company’s common stock from Nasdaq pursuant to Nasdaq Listing Rule 5101 and IM-5101-1. On October 7, 2024, the Company filed a request for hearing to appeal the Staff’s determination.

 

On October 28, 2024, BMYA New Energy Technology Inc., a subsidiary of the Company, entered into a Supplementary Agreement to the Purchase and Sale Contract with Feng’s Auto Parts Inc., which clarifies certain commercial arrangements between the parties under that certain Contracts of Purchase and Sale entered into by and between the parties dated August 23, 2024.

 

The Company has determined that there are no other items to disclose or require adjustments.

 

21

 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Overview

 

As of September 30, 2024, the Company primarily had two business lines, which are the commodities trading business and supply chain management services.  

 

Commodities trading business

 

The commodities trading business primarily involves purchasing non-ferrous metal products, such as aluminum ingots, copper, silver, and gold, from metal and mineral suppliers and then selling to customers. In connection with the Company’s commodity sales, in order to help customers to obtain sufficient funds to purchase various metal products and also help upstream metal and mineral suppliers to sell their metal products, the Company launched its supply chain management service in December 2019. The Company primarily generates revenues from selling bulk non-ferrous commodity products and providing related supply chain management services in the PRC.

 

For the nine months ended September 30, 2024, the Company recorded revenue of $91,714,259 from its commodities trading business and $2,811 from its supply chain management services, respectively.

 

The Company sources bulk commodity products from non-ferrous metal and mines or its designated distributors and then sells to manufacturers who need these metals in large quantities. The Company works with suppliers in the sourcing of commodities. Major suppliers include various metal and mineral suppliers such as Kunsteel Group, Baosteel Group, Aluminum Corporate of China Limited, Yunnan Benyuan, Yunnan Tin, and Shanghai Copper. The Company’s target customers include large infrastructure companies such as China National Electricity, Datang Power, China Aluminum Foshan International Trade, Tooke Investment (China), CSSC International Trade Co., Ltd., Shenye Group, and Keliyuan.

 

Supply Chain Management Services

 

We offer a distribution service to bulk suppliers of precious metals by acting as a sales intermediary, procuring small to medium-sized buyers through our own professional sales team and channels and distributing the bulk precious metals of the suppliers. Upon executing a purchase order from our sourced buyers, we charge the suppliers a commission fee ranging from 1% to 2% of the distribution order, depending on the size of the order. We also offer some other supply chain management services business. For the nine months ended September 30, 2024, the Company generated revenue from supply chain management services of $2,811 from three third-party customers, compared with a commodity distribution services revenue of $64,037 with four third-party customers for the same period in 2023.

 

Competition

 

The Company mainly competes against other large domestic commodity metal product trading service providers such as Xiamen International Trade and Yijian Shares. Currently, the principal competitive factors in the non-ferrous metal commodities trading business are price, product availability, quantity, service, and financing terms for purchases and sales of commodities.

 

Applicable Government Regulations

 

Shenzhen Baiyu Jucheng has obtained all material approvals, permits, licenses and certificates required for our metal product trading operations, including registrations from the local business and administrative department authorizing the purchase of raw materials.

 

Key Factors Affecting Our Results of Operation

 

The commodities trading industry has been experiencing decreasing demand as a result of China’s overall economic slowdown. We expect competition in the commodities trading business to persist and intensify.

 

We commenced our commodities trading business in late November 2019. Over the past five years, we have expanded our operations and diversified our product offerings. Our future success depends on our ability to sustain growth and maintain profitability. Our limited operating history makes it difficult to evaluate our business and future prospects. Our future prospects may face risks and challenges typically encountered by a company with a limited operating history in an emerging and rapidly evolving industry, including, among other things,

 

  ● Profitability: Maintaining and enhancing our profitability through efficient operations and cost management;

 

  ● Competitive Position: Strengthening our competitive position in the commodities trading industry in China by leveraging our established networks and market knowledge.

 

22

 

 

  ● Strategic Implementation: Effectively implementing our growth strategies and adapting to market competition and customer preferences, including potential expansion into new geographical markets.; and

 

  ● Human Resources: Successfully recruiting, training, and retaining qualified managerial and other personnel to support our growth and operational needs.

 

Our business requires a significant amount of capital, particularly for the purchase of bulk commodities and expansion into new markets where we currently do not have operations. We continue to seek opportunities to optimize our operations, improve financial performance, and manage risks associated with our business.

 

Results of Operations

 

Three Months Ended September 30, 2024 as Compared to Three Months Ended September 30, 2023

 

   For the Three Months Ended
September 30,		   Change 
   2024   2023   Amount   % 
Revenues                
-   Sales of commodity products – third parties  $37,162,036   $33,883,096   $3,278,940    10%
-   Supply chain management services   -    28,630    (28,630)   (100)%
Total Revenues   37,162,036    33,911,726    3,250,310    10%
                     
Cost of revenues                    
-   Commodity product sales – third parties   (37,220,150)   (33,916,806)   (3,303,344)   10%
-   Supply chain management services   -    (18,157)   18,157    (100)%
Total operating cost   (37,220,150)   (33,934,963)   (3,285,187)   10%
                     
Gross loss   (58,114)   (23,237)   (34,877)   150%
                     
Operating expenses                    
Selling, general, and administrative expenses   (2,416,176)   (3,034,313)   618,137    (20)%
Total operating expenses   (2,416,176)   (3,034,313)   618,137    (20)%
                     
Other income (expense), net                    
Interest income   7,354,682    5,124,728    2,229,954    44%
Interest expense   (115,082)   (129,716)   14,634    (11)%
Amortization of beneficial conversion feature relating to convertible promissory notes   -    (228,250)   228,250    (100)%
Other income, net   4,308    8,227    (3,919)   (48)%
Total other income, net   7,243,908    4,774,989    2,468,919    52%
                     
Net income before income taxes   4,769,618    1,717,439    3,052,179    178%
                     
Income tax expenses   (1,596,361)   (1,037,781)   (558,580)   54%
Net income  $3,173,257   $679,658   $2,493,599    367%

 

 

23

 

 

Revenue

 

For the three months ended September 30, 2024, we generated revenue from the following two sources, including (1) revenue from sales of commodity products, and (2) revenue from supply chain management services. Total revenue increased by $3,250,310 or 10%, from $33,911,726 for the three months ended September 30, 2023 to $37,162,036 for the three months ended September 30, 2024, among which revenue from commodity trading and supply chain management accounted for 99.99% and 0.01% of our total revenue for the three months ended September 30, 2024. This increase was mainly driven by an expanded our customer base and favorable pricing conditions in the commodities market.

 

(1) Revenue from sales of commodity products

 

For the three months ended September 30, 2024, the Company sold non-ferrous metals to fourteen third-party customers at fixed prices compared with thirteen third-party customers for the same period in 2023, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $37,162,036 from sales of commodity products for the three months ended September 30, 2024, compared to $33,883,096 for the three months ended September 30, 2023, representing an increase of $3,278,940, or 10%. This increase was primarily due to the Company’s expanded customer base, growing from thirteen to fourteen third-party customers, along with an increase in the sales volume of non-ferrous metals.

 

(2) Revenue from supply chain management services

 

In connection with the Company’s commodity sales, in order to help customers to obtain sufficient funds to purchase various metal products and also help metal and mineral suppliers sell their metal products, the Company launched its supply chain management service business in December 2019, which primarily consisted of loan recommendation services and commodity distribution services. For the three months ended September 30, 2024, the Company provided nil commodity distribution services and other related services to third-party customers, compared with $28,630 provided to the third-party customers for the same period ended September 30, 2023. This decrease was primarily due to the Company’s ongoing business plan to expand into electric vehicle industry, resulting in reduction in commodity distribution services to third-party customers.

  

Cost of revenue

 

Our cost of revenue primarily includes the cost of revenue associated with commodity product sales and the cost of revenue associated with management services of the supply chain. Total cost of revenue increased by $3,285,187 or 10% from $33,934,963 for the three months ended September 30, 2023 to $37,220,150 for the three months ended September 30, 2024. The increased cost of revenue is in line with the increase in revenue.

 

Cost of revenue associated with commodity trading

 

For the three months ended September 30, 2024, the Company purchased non-ferrous metal products of $37,220,150 from 11 third-party vendors.

 

For the three months ended September 30, 2023, the Company purchased non-ferrous metal products of $33,916,806 from 11 third-party vendors.

 

24

 

 

Selling, general, and administrative expenses

 

Selling, general and administrative expenses decreased from $3,034,313 for the three months ended September 30, 2023 to $2,416,176 for the three months ended September 30, 2024, representing a decrease of $618,137, or 20%. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expenses, amortizations of intangible assets and convertible notes, professional service fees and finance offering related fees. The decrease was mainly attributable to cost-reduction initiatives and improved operational efficiencies implemented during the period.

  

Interest income

 

Interest income was primarily generated from loans made to third parties and related parties. For the three months ended September 30, 2024, interest income was $7,354,682 representing an increase of $2,229,954, or 44% from $5,124,728 for the three months ended September 30, 2023. The increase was due to the growth of loans made to third party vendors for the three months ended September 30, 2024. The balance of loan receivables was $301,335,694 as of September 30, 2024 which was $99.38 million higher than that as of September 30, 2023.

 

Amortization of beneficial conversion feature and relative fair value of warrants relating to convertible promissory notes

 

For the three months ended September 30, 2024, the item represented the amortization of beneficial conversion feature of nil relating to the convertible promissory notes.

 

For the three months ended September 30, 2023, the item represented the amortization of beneficial conversion feature of $228,250 relating to the convertible promissory notes.

 

Net income (loss)

 

As a result of the foregoing, net income for the three months ended September 30, 2024 was $3,173,257, representing an increase of $2,493,599 from $679,658 for the three months ended September 30, 2023.

 

Nine Months Ended September 30, 2024 as Compared to Nine Months Ended September 30, 2023

 

   For the Nine Months Ended
September 30,		   Change 
   2024   2023   Amount   % 
Revenues                
-   Sales of commodity products – third parties  $91,714,259   $102,937,623   $(11,223,364)   (11)%
-   Supply chain management services   2,811    64,037    (61,226)   (96)%
Total Revenues   91,717,070    103,001,660    (11,284,590)   (11)%
                     
Cost of revenues                    
-   Commodity product sales – third parties   (91,856,394)   (103,107,066)   11,250,672    (11)%
-   Supply chain management services   (16)   (41,540)   41,524    (100)%
Total operating cost   (91,856,410)   (103,148,606)   11,292,196    (11)%
                     
Gross loss   (139,340)   (146,946)   7,606    (5)%
                     
Operating expenses                    
Selling, general, and administrative expenses   (7,487,247)   (14,108,225)   6,620,978    (47)%
Total operating expenses   (7,487,247)   (14,108,225)   6,620,978    (47)%
                     
Other income (expense), net                    
Interest income   20,113,780    14,482,016    5,631,764    39%
Interest expenses   (344,680)   (352,938)   8,258    (2)%
Amortization of beneficial conversion feature relating to convertible promissory notes   (92,552)   (713,292)   620,740    (87)%
Other income, net   1,595    7,130    (5,535)   (78)%
Total other income, net   19,678,143    13,422,916    6,255,227    47%
                     
Net income (loss) before income taxes   12,051,556    (832,255)   12,883,811    1548%
                     
Income tax expenses   (4,298,712)   (2,875,040)   (1,423,672)   50%
Net income (loss)  $7,752,844   $(3,707,295)  $11,460,139    309%

 

25

 

 

Revenue

 

For the nine months ended September 30, 2024, we generate revenue from the following two sources, including (1) revenue from sales of commodity products, and (2) revenue from supply chain management services. Total revenue decreased by $11,284,590 or 11%, from $103,001,660 for the nine months ended September 30, 2023 to $91,717,070 for the nine months ended September 30, 2024, among which revenue from sales of commodity products and supply chain management accounted for 99.99% and 0.01%, respectively. The decrease was mainly affected by the market environment: the industry was in a situation of both weak supply and weak demand, and the internal competition was also fierce.

 

(1) Revenue from sales of commodity products

 

For the nine months ended September 30, 2024, the Company sold non-ferrous metals to fourteen third-party customers at fixed prices compared with thirteen third-party customers for the same period in 2023, and earned revenues when the product ownership was transferred to its customers. The Company earned revenues of $91,714,259 from sales of commodity products for the nine months ended September 30, 2024 compared with $102,937,623 for the nine months ended September 30, 2023, with a decrease of $11,223,364 or 11%. The decrease of revenue from sales of commodity products is mainly due to the decrease in the average unit sales price of zinc ingots from $3.32 per kilogram for the nine months ended September 30, 2023 to $2.76 per kilogram for the nine months ended September 30, 2024. And based on a downward trend in FY2024, the annual consumption of zinc plating in China is declining year by year.

 

(2) Revenue from supply chain management services

 

In connection with the Company’s commodity sales, in order to help customers to obtain sufficient funds to purchase various metal products and also help upstream metal and mineral suppliers sell their metal products, the Company launched its supply chain management service business in December 2019, which primarily consisted of loan recommendation services and distribution services.

 

For the nine months ended September 30, 2024, the Company recorded revenue of $2,811 from supply chain management services to third-party customers compared with $64,037 to third-party customers for the same period in 2023. The decrease in revenue from sales of commodity products is mainly due to the downsizing of the zinc plating market, as well as less customers in the fierce competition.

 

Cost of revenue

 

Our cost of revenue primarily includes the cost of revenue associated with commodity product sales and the cost of revenue associated with management services of the supply chain. Total cost of revenue decreased by $11,292,196 or 11% from $103,148,606 for the nine months ended September 30, 2023 to $91,856,410 for the nine months ended September 30, 2024. The decreased cost of revenue is in line with the decrease in revenue.

 

Cost of revenue associated with commodity trading

 

The cost of revenue primarily consists of purchase costs of non-ferrous metal products.

 

For the nine months ended September 30, 2024, the Company purchased non-ferrous metal products of $91,856,394 from 11 third-party vendors.

 

For the nine months ended September 30, 2023, the Company purchased non-ferrous metal products of $103,107,066 from 11 third-party vendors.

 

26

 

 

Selling, general, and administrative expenses

 

Selling, general and administrative expenses decreased from $14,108,225 for the nine months ended September 30, 2023 to $7,487,247 for the nine months ended September 30, 2024, representing a decrease of $6,620,978, or 47%. Selling, general and administrative expenses primarily consisted of salary and employee benefits, office rental expenses, amortizations of intangible assets and convertible notes, professional service fees and finance offering related fees. The decrease was mainly attributable to stock-based compensation expenses of $5,698,000 resulting from the issuance of a total of 11,000,000 shares of common stock to service providers for the nine months ended September 30, 2023 in comparison to zero in such expenses for the nine months ended September 30, 2024.

 

Interest income

 

Interest income was primarily generated from loans made to third parties and related parties. For the nine months ended September 30, 2024, interest income was $20,113,780 representing an increase of $5,631,764, or 39% from $14,482,016 for the nine months ended September 30, 2023. The increase was due to the growth of loans made to third party vendors for the nine months ended September 30, 2024.

 

Amortization of beneficial conversion feature and relative fair value of warrants relating to convertible promissory notes

 

For the nine months ended September 30, 2024, the item represented the amortization of beneficial conversion feature of $92,552 relating to the convertible promissory notes.

 

For the nine months ended September 30, 2023, the item represented the amortization of beneficial conversion feature of $713,292 relating to the convertible promissory notes.

 

Net income (loss)

 

As a result of the foregoing, net income for the nine months ended September 30, 2024 was $7,752,844, representing an increase of $11,460,139 from a net loss of $3,707,295 for the nine months ended September 30, 2023.

 

Cash Flows and Capital Resources

 

We have financed our operations primarily through shareholder contributions, cash flow from operations, borrowings from third parties and related parties, and equity financing through private placement and public offerings.

 

As reflected in the accompanying unaudited consolidated financial statements, for the nine months ended September 30, 2024, the Company reported cash outflows of $38,390,258 from operating activities. As of September 30, 2024, the Company has working capital of approximately $274.95 million.

 

During the nine months ended September 30, 2024, the cash used in investing activities was $5,494.

 

The Company expects to use the proceeds from the equity financing as working capital to expand its commodities trading business.

 

Based on the foregoing capital market activities, the management believes that the Company will continue as a going concern in the following 12 months.

 

27

 

 

Statement of Cash Flows

 

The following table sets forth a summary of our cash flows. For the nine months ended September 30, 2024 and 2023, respectively:

 

   For the Nine Months Ended
September 30,		 
   2024   2023 
Net Cash (Used in)/Provided by Operating Activities  $(38,390,258)  $1,053,819 
Net Cash Used in Investing Activities   (5,494)   (64,651,465)
Net Cash Provided by Financing Activities   36,900,000    56,004,311 
Effect of exchange rate changes on cash and cash equivalents   306,712    8,140,537 
Net (decrease)/increase in cash and cash equivalents   (1,189,040)   547,202 
Cash and cash equivalents at beginning of period   1,516,358    893,057 
Cash and cash equivalents at end of period  $327,318   $1,440,259 

 

Net Cash Used in Operating Activities

 

During the nine months ended September 30, 2024, we had a cash outflow from operating activities of $38,390,258, a decrease of $39,444,077 from a cash inflow of $1,053,819 for the nine months ended September 30, 2023. We incurred a net income for the nine months ended September 30, 2024 of $7,752,844, an increase of $11,460,139 from the nine months ended September 30, 2023, during which we recorded a net loss of $3,707,295.

 

In addition to the change in profitability, the decrease in net cash used in operating activities was the result of several factors, including:

 

  ● Non-cash effects adjustments include amortization of beneficial conversion feature of convertible promissory notes of $92,552, amortization of intangible assets of $6,634,441, accrual convertible interest expense of $324,463 and amortization of discount on convertible promissory notes of $66,667.

 

  ● A decrease of $58,674,429 of loan receivables due to increase of funds lending to upstream industries.

 

  ● An increase of $2,137,342 of advances from customers due to increase of revenue.

 

  ● An increase of $5,131,470 of income tax payable due to increase of net income.

 

Net Cash Used in Investing Activities 

 

Net cash used in investing activities for the nine months ended September 30, 2024 was $5,494 as compared to net cash used in investing activities of $64,651,465 for the nine months ended September 30, 2023.

 

The cash used in investing activities for the nine months ended September 30, 2023 was mainly for the loans disbursed to third parties of $122,971,023, partly offset by the collected loans from third partis of $58,413,241.

 

28

 

 

Net Cash Provided by Financing Activities

 

During the nine months ended September 30, 2024, the cash provided by financing activities was mainly attributable to cash raised of $36,900,000 from the issuance of 30,000 shares of common stock.

 

During the nine months ended September 30, 2023, the cash provided by financing activities was mainly attributable to cash raised of $42,350,000 from certain private placements by the issuance of 35,000,000 shares of common stocks, cash raised of $559,073 from a registered direct offering by the issuance of 689,306 shares of common stocks, cash raised of $3,000,000 from issuance of unsecured senior convertible promissory notes in the aggregate principal amount of $3,320,000, and cash raised of $9,800,000 from certain private placements by the issuance of 28,000,000 shares of common stock.

 

Off-balance Sheet Arrangements

 

We did not have any off-balance sheet arrangements as of September 30, 2024.

 

Contractual Obligations

 

As of September 30, 2024, the Company had one lease arrangement with an unrelated third party. The lease term is 24 months, which will expire in November 2024. As of the date of this report, the Company cannot reasonably assess whether it will renew the lease term. The lease commitment was as following table:

 

       Less than         
   Total   1 year   1-2 years   Thereafter 
Contractual obligations:                
Operating lease  $1,662   $1,662   $           -   $           - 
Total  $1,662   $1,662   $-   $- 

 

Critical Accounting Policies

 

Please refer to Note 2 of the Condensed Consolidated Financial Statements included in this Form 10-Q for details of our critical accounting policies.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES 

 

Evaluation of Disclosure Controls and Procedures

 

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were not effective as of September 30, 2024.

 

29

 

 

Certain personnel primarily responsible for preparing our financial statements require additional requisite levels of knowledge, experience and training in the application of U.S. GAAP commensurate with our financial reporting requirements. The management thought that in light of the inexperience of our accounting staff with respect to the requirements of U.S. GAAP-based reporting and SEC rules and regulations, we did not maintain effective controls and did not implement adequate and proper supervisory review to ensure that significant internal control deficiencies can be detected or prevented.

 

Management’s assessment of the control deficiency over accounting and finance personnel as of September 30, 2024 includes:

 

  ● our lack of sufficient financial reporting and accounting personnel with appropriate knowledge of the U.S. GAAP and the SEC reporting requirements to properly address complex U.S. GAAP accounting issues and to prepare and review consolidated financial statements and related disclosures to fulfill U.S. GAAP and SEC financial reporting requirements.

 

  ● our lack of comprehensive accounting policies and procedures manual in accordance with U.S. GAAP. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control for purposes of identifying and reporting material weaknesses and other deficiencies in our internal control over financial reporting. Had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional deficiencies may have been identified.

 

Following the identification of the material weaknesses and control deficiencies, we have taken the following remedial measures: engaging an external consulting firm to assist us with the assessment of Sarbanes-Oxley compliance requirements and improvement of overall internal control.

 

We plan to take additional remedial measures, including (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; and (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel.

 

Limitations on the Effectiveness of Disclosure Controls. Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. The design of any system of controls is also based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2024 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

 

30

 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None.

 

ITEM 1A. RISK FACTORS

 

As of the date of this report, there have been no material changes to the risk factors disclosed in our annual report on Form 10-K filed with the SEC on March 22, 2024.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 

 

Common stock issued pursuant to the conversion of convertible promissory notes

 

The Company settled convertible promissory notes issued on October 4, 2021 of $125,000 on December 30, 2022, $125,000 on January 10, 2023, $125,000 on January 18, 2023, $250,000 on February 2, 2023, $250,000 on March 2, 2023, respectively, and issued 148,399, 147,824, 147,475, 292,987, and 279,567 shares of the Company’s common stock on January 6, 2023, January 12, 2023, January 18, 2023, February 3, 2023, and March 2, 2023, respectively for the three months ended September 30, 2023.

 

The Company settled convertible promissory notes issued on May 6, 2022 of $200,000 on January 18, 2023, $200,000 on February 3, 2023, $175,000 on February 8, 2023, $250,000 on February 15, 2023, $250,000 on March 8, 2023, and $125,000 on March 24, 2023, respectively, and issued 235,960, 234,389, 205,090, 292,987, 279,567 and 145,660 shares of the Company’s common stock on January 19, 2023, February 6, 2023, February 8, 2023, February 15, 2023, March 15, 2023, and March 29, 2023, respectively for the three months ended September 30, 2023.

 

The Company settled convertible promissory notes issued on March 13, 2023 of $300,000 on September 7, 2023, $200,000 on October 10, 2023, $175,000 on October 13, 2023, $150,000 on November 16, 2023, $150,000 on December 5, 2023, and $150,000 on December 29, 2023, respectively, and issued 41,829, 41,736, 36,920, 109,075, 109,075, and 137,644, shares of the Company’s common stock on September 12, 2023, October 11, 2023, October 13, 2023, November 20, 2023, December 7, 2023, and December 29, 2023, respectively, for the year ended December 31, 2023. The Company settled convertible promissory notes of $150,000 on February 1, 2024, $150,000 on February 15, 2024, and $150,000 on April 18, 2024 respectively, and issued 160,174, 152,620 and 159,547 shares of the Company’s common stock on February 1, 2024, February 10, 2024 and April 23, 2024, respectively, for the nine months ended September 30, 2024.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES 

 

Not applicable.

 

ITEM 5. OTHER INFORMATION 

 

None. 

 

31

 

 

ITEM 6. EXHIBITS

 

Exhibit No.   Description
3.1*   Certificate of Incorporation of Registrant (incorporated by reference to Exhibit 3.1 of the draft registration statement on Form DRS filed on February 14, 2013)
3.2*   Bylaws of Registrant (incorporated by reference to Exhibit 3.2 of the draft registration statement on Form DRS filed on February 14, 2013)
3.3*   Articles of Association of Wujiang Luxiang Rural Microcredit Co. Ltd. (incorporated by reference to Exhibit 3.3 of the registration statement on Form S-1/A filed on June 27, 2013)
3.4*   Certificate of Approval of Wujiang Luxiang Rural Microcredit Co. Ltd. (incorporated by reference to Exhibit 3.4 of the registration statement on Form S-1 filed on June 7, 2013)
3.5*   Certificate of Amendment of the Certificate of Incorporation of Registrant (incorporated by reference to Exhibit 3.5 of the registration statement on Form S-1/A filed on July 16, 2013)
3.6*   Certificate of Amendment to the Certificate of Incorporation of Registrant (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on January 16, 2019)
3.7*   Certificate of Amendment to the Certificate of Incorporation of Registrant, incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on June 7, 2019
3.8*   Certificate of Amendment to the Certificate of Incorporation of Registrant, incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on March 12, 2020
3.9*   Certificate of Amendment to Certificate of Incorporation of Registrant, incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on April 21, 2021
3.10*   Certificate of Amendment to Certificate of Incorporation of Registrant, incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on August 17, 2022
3.11*   Certificate of Amendment of Certificate of Incorporation, filed with the Secretary of State of Delaware on October 19, 2023, incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on October 20, 2023
10.1*   Supplementary Agreement to the Purchase and Sale Contract entered into by and between BMYA New Energy Technology Inc. and Feng’s Auto Parts Inc., dated October 28, 2024, incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on October 30, 2024
31.1**   Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
31.2**   Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32.1***   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2***   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS   Inline XBRL Instance Document
101.SCH   Inline XBRL Taxonomy Extension Schema Document
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

 

* Previously filed
   
** Filed herewith
   
*** The certifications attached as Exhibit 32.1 and 32.2 accompanying this Quarterly Report on Form 10-Q, are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

 

32

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  

  BAIYU HOLDINGS, INC.
   
Date: November 13, 2024   By: /s/ Renmei Ouyang
  Name:  Renmei Ouyang
  Title: Chief Executive Officer
(Principal Executive Officer)
     
  By: /s/ Wenhao Cui
  Name: Wenhao Cui
  Title: Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

 

 

33

 

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Exhibit 31.1

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Renmei Ouyang, certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2024 of BAIYU Holdings, Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 13, 2024 By: /s/ Renmei Ouyang
    Renmei Ouyang
    Chief Executive Officer
    (Principal Executive Officer)

 

Exhibit 31.2

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Wenhao Cui, certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q for the period ended September 30, 2024 of BAIYU Holdings, Inc.;

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

 

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 13, 2024 By: /s/ Wenhao Cui
    Wenhao Cui
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

SECTION 906 OF SARBANES-OXLEY ACT OF 2002

 

I, Renmei Ouyang, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

1.The Quarterly Report on Form 10-Q of BAIYU Holdings, Inc. (the “Company”) for the period ended September 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and

 

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: November 13, 2024 By: /s/ Renmei Ouyang
    Renmei Ouyang
    Chief Executive Officer
    (Principal Executive Officer)

 

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

SECTION 906 OF SARBANES-OXLEY ACT OF 2002

 

I, Wenhao Cui, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

1.The Quarterly Report on Form 10-Q of BAIYU Holdings, Inc. (the “Company”) for the period ended September 30, 2024 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and

 

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: November 13, 2024 By: /s/ Wenhao Cui
    Wenhao Cui
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

 

v3.24.3
Cover - shares
 9 Months Ended
Sep. 30, 2024
Nov. 13, 2024
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Entity Interactive Data Current Yes  
Amendment Flag false  
Document Period End Date Sep. 30, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Entity Information [Line Items]    
Entity Registrant Name BAIYU HOLDINGS, INC.  
Entity Central Index Key 0001556266  
Entity File Number 001-36055  
Entity Tax Identification Number 45-4077653  
Entity Incorporation, State or Country Code DE  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Contact Personnel [Line Items]    
Entity Address, Address Line One Room 3707. Jingji Binhe Times Building  
Entity Address, Address Line Two Binhe Avenue  
Entity Address, Address Line Three Futian District  
Entity Address, City or Town Shenzhen  
Entity Address, Country CN  
Entity Address, Postal Zip Code 518000  
Entity Phone Fax Numbers [Line Items]    
City Area Code +86 (0755)  
Local Phone Number 82792111  
Entity Listings [Line Items]    
Title of 12(b) Security Common Stock, par value $0.001  
Trading Symbol BYU  
Security Exchange Name NASDAQ  
Entity Common Stock, Shares Outstanding   49,945,235
v3.24.3
Unaudited Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Current Assets    
Cash and cash equivalents $ 327,318 $ 1,516,358
Loans receivable from third parties 301,335,694 240,430,865
Inventories, net 278,129 259,806
Other current asset 13,071,773 10,134,829
Total current assets 315,012,914 252,341,858
Non-Current Assets    
Plant and equipment, net 23,250 32,090
Goodwill 159,003,547 157,542,081
Intangible assets, net 39,705,485 45,285,617
Right-of-use assets, net 15,300 83,375
Total non-current assets 198,747,582 202,943,163
Total Assets 513,760,496 455,285,021
Current Liabilities    
Accounts payable 603
Bank borrowings 997,492 1,057,648
Third party loans payable 499,019 476,627
Contract liabilities 5,227,543 3,090,201
Income tax payable 21,319,296 16,187,826
Lease liabilities 16,186 86,691
Other current liabilities 7,837,297 6,578,349
Convertible promissory notes 4,168,304 4,284,622
Total current liabilities 40,065,740 31,761,964
Non-Current Liabilities    
Deferred tax liabilities 1,708,224 2,256,696
Total non-current liabilities 40,182,916 40,377,752
Total liabilities 80,248,656 72,139,716
Commitments and Contingencies (Note 17)
Equity    
Common stock (par value $0.001 per share, 600,000,000 shares authorized; 49,945,235 and 19,335,220 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively)* [1] 49,945 19,335
Additional paid-in capital 476,450,077 438,980,687
Statutory surplus reserve 2,602,667 2,602,667
Accumulated deficit (30,641,615) (39,520,164)
Accumulated other comprehensive loss (11,031,061) (16,144,752)
Total BAIYU Shareholders’ Equity 437,430,013 385,937,773
Non-controlling interest (3,918,173) (2,792,468)
Total Equity 433,511,840 383,145,305
Total Liabilities and Equity 513,760,496 455,285,021
Related Party    
Non-Current Liabilities    
Due to related parties $ 38,474,692 $ 38,121,056
[1] On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.
v3.24.3
Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Sep. 30, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Common stock, par value (in Dollars per share) [1] $ 0.001 $ 0.001
Common stock, shares authorized [1] 600,000,000 600,000,000
Common stock, shares issued [1] 49,945,235 19,335,220
Common stock, shares outstanding [1] 49,945,235 19,335,220
[1] On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.
v3.24.3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenues        
Total revenue $ 37,162,036 $ 33,911,726 $ 91,717,070 $ 103,001,660
Cost of revenues        
Total operating costs (37,220,150) (33,934,963) (91,856,410) (103,148,606)
Gross loss (58,114) (23,237) (139,340) (146,946)
Operating expenses        
Selling, general, and administrative expenses (2,416,176) (3,034,313) (7,487,247) (14,108,225)
Total operating expenses (2,416,176) (3,034,313) (7,487,247) (14,108,225)
Net Operating Loss (2,474,290) (3,057,550) (7,626,587) (14,255,171)
Other income (expenses), net        
Interest income 7,354,682 5,124,728 20,113,780 14,482,016
Interest expenses (115,082) (129,716) (344,680) (352,938)
Amortization of beneficial conversion feature relating to issuance of convertible promissory notes (228,250) (92,552) (713,292)
Other income, net 4,308 8,227 1,595 7,130
Total other income, net 7,243,908 4,774,989 19,678,143 13,422,916
Net income (loss) before income taxes 4,769,618 1,717,439 12,051,556 (832,255)
Income tax expenses (1,596,361) (1,037,781) (4,298,712) (2,875,040)
Net income (loss) 3,173,257 679,658 7,752,844 (3,707,295)
Less: Net loss attributable to non-controlling interests (366,205) (382,556) (1,125,705) (1,166,557)
Net income (loss) attributable to BAIYU Holdings, Inc.’s Stockholders’ 3,539,462 1,062,214 8,878,549 (2,540,738)
Comprehensive income (loss)        
Net income (loss) 3,173,257 679,658 7,752,844 (3,707,295)
Foreign currency translation adjustments 10,429,678 2,156,075 5,113,691 (12,025,878)
Comprehensive income (loss) 13,602,935 2,835,733 12,866,535 (15,733,173)
Less: Total comprehensive loss attributable to non-controlling interests (366,205) (382,556) (1,125,705) (1,166,557)
Comprehensive income (loss) attributable to BAIYU Holdings, Inc.’s Stockholders $ 13,969,140 $ 3,218,289 $ 13,992,240 $ (14,566,616)
Income (loss) per share - basic and diluted        
Continuing Operation- income (loss) per share – basic (in Dollars per share) [1] $ 0.08 $ 0.23 $ 0.47 $ (1.21)
Continuing Operation- income (loss) per share –diluted (in Dollars per share) [1] $ 0.07 $ 0.17 $ 0.35 $ (0.93)
Weighted Average Shares Outstanding-Basic (in Shares) [1] 38,782,001 3,016,281 16,671,646 3,074,862
Weighted Average Shares Outstanding- Diluted (in Shares) [1] 44,146,337 3,948,068 22,035,982 4,006,649
Sales of commodity products – third parties        
Revenues        
Total revenue $ 37,162,036 $ 33,883,096 $ 91,714,259 $ 102,937,623
Supply chain management services-third parties        
Revenues        
Total revenue   28,630 2,811 64,037
Cost of revenues        
Total operating costs (18,157) (16) (41,540)
Commodity product sales-third parties        
Cost of revenues        
Total operating costs $ (37,220,150) $ (33,916,806) $ (91,856,394) $ (103,107,066)
[1] On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.
v3.24.3
Unaudited Condensed Consolidated Statements of Changes in Equity - USD ($)
Common Stock
Additional paid-in capital
Accumulated Deficit
Surplus Reserve
Accumulated other comprehensive income (loss)
Non-controlling interests
Total
Balance at Dec. 31, 2022 $ 2,135 $ 344,400,599 $ (38,800,375) $ 2,602,667 $ (8,984,925) $ (1,245,932) $ 297,974,169
Balance (in Shares) at Dec. 31, 2022 2,134,842            
Issuance of common stocks in connection with private placements $ 1,260 52,148,740 52,150,000
Issuance of common stocks in connection with private placements (in Shares) 1,260,000            
Issuance of common stocks pursuant to exercise of convertible promissory notes $ 124 2,877,091 2,877,215
Issuance of common stocks pursuant to exercise of convertible promissory notes (in Shares) 124,427            
Issuance of common stocks pursuant to ATM transaction $ 14 559,059 559,073
Issuance of common stocks pursuant to ATM transaction (in Shares) 13,786            
Issuance of common stock pursuant to stock incentive stock plan $ 220 5,697,780 5,698,000
Issuance of common stock pursuant to stock incentive stock plan (in Shares) 220,000            
Beneficial conversion feature relating to issuance of convertible promissory notes 913,000 913,000
Net income (loss) (2,540,738) (1,166,557) (3,707,295)
Foreign currency translation adjustments (12,025,878)   (12,025,878)
Balance at Sep. 30, 2023 $ 3,753 406,596,269 (41,341,113) 2,602,667 (21,010,803) (2,412,489) 344,438,284
Balance (in Shares) at Sep. 30, 2023 3,753,055            
Balance at Jun. 30, 2023 $ 3,128 396,346,894 (42,403,327) 2,602,667 (23,166,878) (2,029,933) 331,352,551
Balance (in Shares) at Jun. 30, 2023 3,128,149            
Issuance of common stocks in connection with private placements $ 560 9,799,440 9,800,000
Issuance of common stocks in connection with private placements (in Shares) 560,000            
Issuance of common stocks pursuant to exercise of convertible promissory notes $ 65 449,935 450,000
Issuance of common stocks pursuant to exercise of convertible promissory notes (in Shares) 64,906            
Net income (loss) 1,062,214 (382,556) 679,658
Foreign currency translation adjustments 2,156,075   2,156,075
Balance at Sep. 30, 2023 $ 3,753 406,596,269 (41,341,113) 2,602,667 (21,010,803) (2,412,489) 344,438,284
Balance (in Shares) at Sep. 30, 2023 3,753,055            
Balance at Dec. 31, 2023 $ 19,335 438,980,687 (39,520,164) 2,602,667 (16,144,752) (2,792,468) $ 383,145,305
Balance (in Shares) at Dec. 31, 2023 19,335,220           19,335,220 [1]
Issuance of common stocks in connection with private placements $ 30,000 36,870,000 $ 36,900,000
Issuance of common stocks in connection with private placements (in Shares) 30,000,000            
Issuance of common stocks pursuant to exercise of convertible promissory notes $ 610 599,390 600,000
Issuance of common stocks pursuant to exercise of convertible promissory notes (in Shares) 610,015            
Net income (loss) 8,878,549 (1,125,705) 7,752,844
Foreign currency translation adjustments 5,113,691   5,113,691
Balance at Sep. 30, 2024 $ 49,945 476,450,077 (30,641,615) 2,602,667 (11,031,061) (3,918,173) $ 433,511,840
Balance (in Shares) at Sep. 30, 2024 49,945,235           49,945,235 [1]
Balance at Jun. 30, 2024 $ 49,945 476,450,077 (34,181,077) 2,602,667 (21,460,739) (3,551,968) $ 419,908,905
Balance (in Shares) at Jun. 30, 2024 49,945,235            
Net income (loss) 3,539,462 (366,205) 3,173,257
Foreign currency translation adjustments 10,429,678   10,429,678
Balance at Sep. 30, 2024 $ 49,945 $ 476,450,077 $ (30,641,615) $ 2,602,667 $ (11,031,061) $ (3,918,173) $ 433,511,840
Balance (in Shares) at Sep. 30, 2024 49,945,235           49,945,235 [1]
[1] On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.
v3.24.3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash Flows from Operating Activities:    
Net income (loss) $ 7,752,844 $ (3,707,295)
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Depreciation of plant and equipment 9,488 6,289
Amortization of intangible assets 6,634,441 6,002,628
Amortization of right of use assets 68,075 88,416
Amortization of discount on convertible promissory notes 66,667 200,000
Amortization of beneficial conversion feature relating to issuance of convertible promissory notes 92,552 713,292
Interest expense for convertible promissory notes 324,463 245,506
Deferred tax liabilities (548,472) (569,635)
Share-based payment stock to service providers 5,698,000
Inventories impairment (16,818)
Inventories (18,323) 195,620
Loans receivable from third parties (58,674,429)
Other current assets (140,962) (9,754,421)
Prepayments (639,788) (3,297,177)
Contract liabilities 2,137,342 2,747,384
Due from third parties (2,150,700) (275,930)
Due from related parties 353,636 (1,963,576)
Accounts payable 603 425,930
Income tax payable 5,131,470 3,444,639
Other current liabilities 1,258,948 941,335
Lease liabilities (70,505) (88,281)
Due to third party loans payable 22,392 17,913
Net cash (used in)/provided by operating activities (38,390,258) 1,053,819
Cash Flows from Investing Activities:    
Purchases of plant and equipment (34,733)
Payment made on loans to third parties (122,971,023)
Proceeds from loans of third parties 58,413,241
Investments in other investing activities (5,494) (58,950)
Net cash used in investing activities (5,494) (64,651,465)
Cash Flows from Financing Activities:    
Repayments made on loans to third parties 69,995
Proceeds from issuance of common stock under ATM transaction 559,073
Proceeds from issuance of common stock under private placement transactions 36,900,000 42,350,000
Proceeds from convertible promissory notes 13,025,243
Net cash provided by financing activities 36,900,000 56,004,311
Effect of exchange rate changes on cash and cash equivalents 306,712 8,140,537
Net (decrease)/increase in cash and cash equivalents (1,189,040) 547,202
Cash and cash equivalents at beginning of period 1,516,358 893,057
Cash and cash equivalents at end of period 327,318 1,440,259
Supplemental Cash Flow Information    
Cash paid for interest expenses 809 38,918
Supplemental disclosure of non-cash investing and financing activities    
Right-of-use assets obtained in exchange for operating lease obligations 58,617
Issuance of common stocks in connection with conversion of convertible promissory notes $ 600,000 $ 13,590,215
v3.24.3
Organization and Business Description
 9 Months Ended
Sep. 30, 2024
Organization and Business Description [Abstract]  
ORGANIZATION AND BUSINESS DESCRIPTION

1. ORGANIZATION AND BUSINESS DESCRIPTION

 

BAIYU Holding, Inc. is a Delaware corporation, incorporated under the laws of the state of Delaware.

 

The Company primarily conducts business through Shenzhen Baiyu Jucheng Data Technology Co., Ltd., Shenzhen Qianhai Baiyu Supply Chain Co., Ltd., Hainan Jianchi Import and Export Co., Ltd., and Shenzhen Tongdow Internet Technology Co., Ltd. to offer the commodity trading business and supply chain management services to customers in the PRC. Supply chain management services consist of loan recommendation services and commodity product distribution services.

 

Name   Background   Ownership
HC High Summit Holding Limited (“HC High BVI”)  

A BVI company

Incorporated on March 22, 2018

A holding company

   100% owned by the Company
         
TD Internet of Things Technology Company Limited (“TD Internet Technology”) (Formerly Named: Tongdow Block Chain Information Technology Company Limited)  

A Hong Kong company

Incorporated on February 14, 2020

A holding company

   100% owned by HC High BVI 
         
Hainan Baiyu Cross-border E-commerce Co., Ltd. (“Hainan Baiyu”)  

A Hong Kong company

Incorporated on June 19, 2002

A holding company

   WFOE, 100% owned by Tongdow HK
         
Zhong Hui Dao Ming Investment Management Limited (“ZHDM HK”)  

A Hong Kong company

Incorporated on June 19, 2002

A holding company

   100% owned by HC High BVI
         
Hong Kong Tongyuan Energy Storage Smart Electric Co., Ltd (“Tongdow HK”) (Formerly Named: Tongdow E-trade Limited)  

A Hong Kong company

Incorporated on November 25, 2010

A holding company

   100% owned by HC High BVI
         
Shanghai Jianchi Supply Chain Co., Ltd. (“Shanghai Jianchi”)  

A PRC company and deemed a wholly foreign owned enterprise (“WFOE”)

Incorporated on April 2, 2020

Registered capital of $10 million

A holding company

   WFOE, 100% owned by TD Internet Technology
         
Tongdow (Hainan) Data Technology Co., Ltd. (“Tondow Hainan”)  

A PRC limited liability company

Incorporated on July 16, 2020

Registered capital of $1,417,736 (RMB10 million)  

   A wholly owned subsidiary of Shanghai Jianchi
         
Hainan Jianchi Import and Export Co., Ltd. (“Hainan Jianchi”)  

A PRC limited liability company

Incorporated on December 21, 2020

Registered capital of $7,632,772 (RMB50 million) with registered capital of $0 (RMB0) paid-up

   A wholly owned subsidiary of Shanghai Jianchi

Shenzhen Baiyu Jucheng Data Techonology Co., Ltd. (“Shenzhen Baiyu Jucheng”)  

A PRC limited liability company

Incorporated on December 30, 2013

Registered capital of $1,417,736 (RMB10 million) with registered capital fully paid-up

   VIE of Hao Limo Technology (Beijing) Co., Ltd. before June 25, 2020, and a wholly owned subsidiary of Shanghai Jianchi
         
Shenzhen Qianhai Baiyu Supply Chain Co., Ltd. (“Qianhai Baiyu”)  

A PRC limited liability company

Incorporated on August 17, 2016

Registered capital of $4,523,857 (RMB30 million) with registered capital of $736,506 (RMB5 million) paid-up

   A wholly owned subsidiary of Shenzhen Baiyu Jucheng
         
Shenzhen Tongdow Internet Technology Co., Ltd. (“Shenzhen Tongdow”)  

A PRC limited liability company

Incorporated on November 11, 2014

Registered capital of $1,628,320 (RMB10 million) with registered capital of $1,628,320 (RMB10 million) paid-up

   VIE of Shenzhen Baiyu Jucheng
         
Yangzhou Baiyu Venture Capital Co. Ltd. (“Yangzhou Baiyu Venture”)  

A PRC limited liability company

Incorporated on April 19, 2021

Registered capital of $30 million with registered capital of $7 million paid-up

   WFOE, 100% owned by Tongdow HK
         
Yangzhou Baiyu Cross-broder E-commerce Co., Ltd. (“Yangzhou Baiyu E-commerce”)  

A PRC limited liability company

Incorporated on May 14, 2021

Registered capital of $30 million (RMB200 million) with registered capital of $7 million (RMB48 million) paid-up

   100% owned by Yangzhou Baiyu Venture
         
Zhejiang Baiyu Lightweight New Material Co., Ltd. (“Zhejiang Baiyu”)    

 A PRC limited liability company

Incorporated on August 5, 2022

Registered capital of $1,483,569 (RMB10 million)

   100% owned by Yangzhou Baiyu E-commerce
         
Baiyu International Supply Chain PTE. LTD    A Singapore company Incorporated on June 28, 2023   100% owned by HC High BVI
         
Beijing Baiyu Jucheng Technology Co., LTD   

A PRC limited liability company Incorporated on January 19, 2024

Registered capital of $140,515 (RMB1 million)

   100% owned by Qianhai Baiyu
         
Electra New Energy Vehicle Inc   A Delaware, USA corporation company incorporated on April 10, 2024   100% owned by HC High BVI

 

The following diagram illustrates our corporate structure as of September 30, 2024.

 

 

 

(1) A variable interest entity.
v3.24.3
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2024
Summary of Significant Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

(a) Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

 

The unaudited interim condensed consolidated financial information as of September 30, 2024 and for the nine months ended September 30, 2024 and 2023 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual condensed consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K for the fiscal year ended December 31, 2023 previously filed with the SEC on March 22, 2024.

 

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed consolidated financial position as of September 30, 2024 and its unaudited condensed consolidated results of operations for the nine months ended September 30, 2024 and 2023, and its unaudited condensed consolidated cash flows for the nine months ended September 30, 2024 and 2023, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the fiscal year or any future period.

 

(b) Use of estimates

 

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. Significant accounting estimates reflected in the financial statements include: (i) useful lives and residual value of long-lived assets; (ii) the impairment of long-lived assets and investments; (iii) the valuation allowance of deferred tax assets; (iv) estimates of allowance for doubtful accounts, including loans receivable from third parties and related parties; (v) valuation of Inventory; and (vi) contingencies and litigation.

 

(c) Foreign currency translation

 

The Company’s financial information is presented in U.S. dollars (“USD”). The functional currency of the Company is the Chinese Yuan Renminbi (“RMB”), the currency of PRC. Any transactions which are denominated in currencies other than RMB are translated into RMB at the exchange rate quoted by the People’s Bank of China prevailing at the dates of the transactions, and exchange gains and losses are included in the statements of operations as foreign currency transaction gain or loss. The consolidated financial statements of the Company have been translated into U.S. dollars in accordance with ASC 830, Foreign Currency Matters. The financial information is first prepared in RMB and then translated into U.S. dollars at period-end exchange rates for assets and liabilities and average exchange rates for revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

 

(d) Convertible promissory notes

 

Convertible promissory notes are recognized initially at fair value, net of upfront fees, debt discounts or premiums, debt issuance costs and other incidental fees. Upfront fees, debt discounts or premiums, debt issuance costs and other incidental fees are recorded as a reduction of the proceeds received and the related accretion is recorded as interest expense in the consolidated income statements over the estimated term of the facilities using the effective interest method.

 

(e) Beneficial conversion feature

 

The Company evaluates the conversion feature to determine whether it was beneficial as described in ASC 470-20. The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible notes payable and may not be settled in cash upon conversion, is treated as a discount to the convertible notes payable. This discount is amortized over the period from the date of issuance to the date the notes are due using the effective interest method. If the notes payable are retired prior to the end of their contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the shares of common stock at the commitment date to be received upon conversion.

(f) Recent accounting pronouncement

 

In November 2023, the FASB issued guidance to enhance disclosure of expenses of a public entity’s reportable segments. The new guidance requires a public entity to disclose: (1) on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, (2) on an annual and interim basis, an amount for other segment items (the difference between segment revenue less the significant expenses disclosed under the significant expense principle and each reported measure of segment profit or loss), including a description of its composition, (3) on an annual and interim basis, information about a reportable segment’s profit or loss and assets previously required to be disclosed only on an annual basis, and (4) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and how to allocate resources. The new guidance also clarifies that if the CODM uses more than one measure of a segment’s profit or loss, one or more of those measures may be reported and requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this update and all existing segment disclosures. The guidance is effective for the current fiscal year 2024 annual reporting, and in the first quarter of 2025 for interim period reporting, with early adoption permitted. Upon adoption, this guidance should be applied retrospectively to all prior periods presented. We do not expect the adoption of this accounting standard to have an impact on our Consolidated Financial Statements.

 

In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures. On an annual basis, the new guidance requires a public entity to disclose: (1) specific categories in the rate reconciliation, (2) additional information for reconciling items that are equal to or greater than 5% of the amount computed by multiplying income (or loss) from continuing operations before income tax expense (or benefit) by the applicable statutory income tax rate, (3) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, with foreign taxes disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5% of total income taxes paid, (4) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (5) income tax expense (or benefit) from continuing operations disaggregated between federal (national), state and foreign. The guidance is effective for fiscal year 2025 annual reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. We do not expect the adoption of this accounting standard to have an impact on our Consolidated Financial Statements but will require certain additional disclosures.

 

In July 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The adoption of this guidance did not have a material impact on its financial position, results of operations and cash flows.

 

In December 2023, the FASB issued ASU 2023-08: Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60). For annual and interim reporting periods, the amendments in this Update require that an entity, including an entity that is subject to industry-specific guidance, disclose the following information: (1) The name, cost basis, fair value, and number of units for each significant crypto asset holding and the aggregate fair values and cost bases of the crypto asset holdings that are not individually significant, (2) For crypto assets that are subject to contractual sale restrictions, the fair value of those crypto assets, the nature and remaining duration of the restriction(s), and the circumstances that could cause the restriction(s) to lapse.

 

Other accounting standards that have been issued or proposed 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.
v3.24.3
Loans Receivable from Third Parties
 9 Months Ended
Sep. 30, 2024
Loans Receivable from Third Parties [Abstract]  
LOANS RECEIVABLE FROM THIRD PARTIES

3. LOANS RECEIVABLE FROM THIRD PARTIES

 

   September 30,
2024		   December 31,
2023		 
Loans receivable from third parties  $301,335,694   $240,430,865 
           

 

As of September 30, 2024, the Company has fourteen loan agreements compared with thirteen loan agreements on December 31, 2023. The Company provided loans aggregating $109,311,498 for the purpose of making use of idle cash and maintaining long-term customer relationship and collected $51,521,185 during the nine months ended September 30, 2024. These loans will mature from July 2024 through July 2025, and charge an interest rate of 10.95% per annum on these customers. The company has the right to pledge account receivable or inventory.

 

Interest income of $20,113,673 and $14,481,640 was accrued for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31, 2023, the Company recorded an interest receivable of $8,194,485 and $5,931,541 as reflected under “other current assets” in the condensed consolidated balance sheets.

 

As of September 30, 2024 and December 31, 2023, there was no allowance recorded as the Company considers all of the loans receivable fully collectible.
v3.24.3
Inventories, Net
 9 Months Ended
Sep. 30, 2024
Inventories, Net [Abstract]  
INVENTORIES, NET

4. INVENTORIES, NET

 

The Company’s inventories consist of aluminum ingots, etc., that were purchased from third parties for resale to third parties. Inventories consisted of the following:

 

   September 30,
2024		   December 31,
2023		 
Aluminum ingots  $278,129   $259,806 
Inventories, net  $278,129   $259,806 

 

For the nine months ended September 30, 2024, the Company did not accrue or charge back any impairment as the impaired inventories have been sold.
v3.24.3
Other Current Assets
 9 Months Ended
Sep. 30, 2024
Other Current Assets [Abstract]  
OTHER CURRENT ASSETS

5. OTHER CURRENT ASSETS

 

   September 30,
2024		   December 31,
2023		 
Other current assets:        
Deposit  $40,608   $35,888 
Interest receivables   8,194,485    5,931,541 
Prepayments   4,728,998    4,089,210 
Others   107,682    78,190 
Total  $13,071,773   $10,134,829 
v3.24.3
Plant and Equipment, Net
 9 Months Ended
Sep. 30, 2024
Plant and Equipment, Net [Abstract]  
PLANT AND EQUIPMENT, NET

6. PLANT AND EQUIPMENT, NET

 

   September 30,
2024		   December 31,
2023		 
Cost:        
Office equipment  $44,399   $43,999 
Accumulated depreciation:          
Office equipment  $(21,149)  $(11,909)
Plant and equipment, net  $23,250   $32,090 

 

Depreciation expense was $9,488, and currency translation difference was negative $248 for the nine months ended September 30, 2024. Depreciation expense was $6,289, and currency translation difference was negative $231 for the nine months ended September 30, 2023.
v3.24.3
Goodwill
 9 Months Ended
Sep. 30, 2024
Goodwill [Abstract]  
GOODWILL

7. GOODWILL

 

Changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2024, and years ended December 31, 2023 were as follows:

 

   Acquisition
of Qianhai
Baiyu		   Contractual
arrangement
with
Tongdow Internet
Technology		   Total 
             
Balance as of December 31, 2022  $65,022,402   $95,191,148   $160,213,550 
Foreign currency translation adjustments   (1,084,211)   (1,587,258)   (2,671,469)
Balance as of December 31, 2023   63,938,191    93,603,890    157,542,081 
Foreign currency translation adjustments  $593,134   $868,332   $1,461,466 
Balance as of September 30, 2024   64,531,325    94,472,222    159,003,547 

 

Based on an assessment of the qualitative factors, management determined that it is more-likely-than-not that the fair value of the reporting unit is in excess of its carrying amount. Therefore, management concluded that it was not necessary to proceed with the two-step goodwill impairment test. No impairment loss or other changes were recorded, except for the influence of foreign currency translation for the nine months ended September 30, 2024 and the year ended December 31, 2023.
v3.24.3
Intangible Assets
 9 Months Ended
Sep. 30, 2024
Intangible Assets [Abstract]  
INTANGIBLE ASSETS

8. INTANGIBLE ASSETS

 

   September 30,
2024		   December 31,
2023		 
Customer relationships  $18,727,200   $18,555,071 
Software copyright   47,452,121    47,015,968 
Total   66,179,321    65,571,039 
           
Less: accumulative amortization   (26,473,836)   (20,285,422)
Intangible assets, net  $39,705,485   $45,285,617 

The Company’s intangible assets consist of customer relationships and software copyrights. Customer relationships are generally recorded in connection with acquisitions at their fair value, one kind of software copyright was purchased in March 2021 and the other kind of software copyright was recorded in connection with the contractual arrangement with Shenzhen Tongdow Internet Technology Co., Ltd. in October 2022. Intangible assets with estimable lives are amortized, generally on a straight-line basis, over their respective estimated useful lives: 6.2 years for customer relationships, 6.83 years for one kind of software copyright purchased in March 2021 and 10 years for the other kind of software copyright recorded in connection with the contractual arrangement with Shenzhen Tongdow Internet Technology Co., Ltd, to their estimated residual values and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

 

Amortization expense for the nine months ended September 30, 2024 and 2023 was $6,634,441 and $6,002,628, respectively. The currency translation difference was negative $446,027 and $514,654 for the nine months ended September 30, 2024 and 2023, respectively.

 

No impairment loss was made against the intangible assets during the nine months ended September 30, 2024.

 

The estimated amortization expense for these intangible assets in the next five years and thereafter is as follows:

 

Period ending September 30, 2024:  Amount 
current year  $6,000,233 
2025   8,000,310 
2026   6,481,888 
2027   4,616,921 
2028   4,274,966 
Thereafter   10,331,167 
Total:  $39,705,485 
v3.24.3
Bank Borrowings
 9 Months Ended
Sep. 30, 2024
Bank Borrowings [Abstract]  
BANK BORROWINGS

9. BANK BORROWINGS

 

Bank borrowings represent the amounts due to Baosheng County Bank that are due within one year. As of September 30, 2024 and December 31, 2023, bank loans consisted of the following: 

 

   September 30,
2024		   December 31,
2023		 
Short-term bank loans:        
Loan from Baosheng County Bank  $997,492   $988,324 
Loan from Bank of Communications   
-
    69,324 
Total  $997,492   $1,057,648 

 

In August 2022, Qianhai Baiyu entered into five loan agreements with Baosheng County Bank to borrow a total amount of RMB7.0 million as working capital for a one-year term, maturing in August 2023. In August 2023, the company and the bank renewed the contract, extending the loan term to August 2025. The five loans bear a fixed interest rate of 7.8% per annum and are guaranteed by Shenzhen Herun Investment Co., Ltd, Li Hongbin and Wang Shuang.

 

In August 2023, Qianhai Baiyu entered into a loan agreement with the Bank of Communications, borrowing a total of RMB 0.49 million as one-year working capital. This loan carried a fixed interest rate of 4.15% per annum and was fully repaid on April 2, 2024. 
v3.24.3
Leases
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
LEASES

10. LEASES

 

The Company leases an office space under non-cancelable operating leases, with a term of 24 months. The Company considers renewal or termination options that are reasonably certain to be exercised when determining the lease term and the initial measurement of right of use assets and lease liabilities. The amortization of right of use assets for lease payment is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

 

The Company determines whether a contract is, or contains, a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

 

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 

Supplemental consolidated balance sheet information related to the operating lease was as follows:

 

   September 30,
2024		   December 31,
2023		 
         
Right-of-use assets, net  $15,300   $83,375 
           
Lease Liabilities-current  $16,186   $86,691 
Total  $16,186   $86,691 

 

The weighted average remaining lease terms and discount rates for the operating lease were as follows as of September 30, 2024:

 

Remaining lease term and discount rate:    
Weighted average remaining lease term (years) 
 
 
Weighted average discount rate   4.75%

 

For the nine months ended September 30, 2024 and 2023, the Company charged total amortization of right-of-use assets of $68,075 and $88,416 respectively. For the three months ended September 30, 2024 and 2023, the Company charged total amortization of right-of-use assets of $22,355 and $7,737 respectively.

 

The following is a schedule, by fiscal quarter, of maturities of lease liabilities as of September 30, 2024:

 

Period ended September 30, 2024:   Amount  
current year   $ 18,139  
Total lease payments     18,139  
Less: imputed interest     1,953  
Present value of lease liabilities     16,186  
v3.24.3
Other Current Liabilities
 9 Months Ended
Sep. 30, 2024
Other Current Liabilities [Abstract]  
OTHER CURRENT LIABILITIES

11. OTHER CURRENT LIABILITIES

 

   September 30,
2024		   December 31,
2023		 
Accrued payroll and benefit  $1,828,464   $3,210,615 
Other tax payable   5,457,777    3,352,643 
Accrued expenses   550,911    14,949 
Others   145    142 
Total  $7,837,297   $6,578,349 
v3.24.3
Convertible Promissory Notes
 9 Months Ended
Sep. 30, 2024
Convertible Promissory Notes [Abstract]  
CONVERTIBLE PROMISSORY NOTES

12. CONVERTIBLE PROMISSORY NOTES

 

   September 30,
2024		   December 31,
2023		 
Convertible promissory notes – principal  $2,443,358   $3,043,358 
Convertible promissory notes – discount   
-
    (159,219)
Convertible promissory notes – interest   1,724,946    1,400,483 
Convertible promissory notes, net  $4,168,304   $4,284,622 

 

On May 6, 2022, the Company entered into a securities purchase agreement with Streeterville Capital, LLC (“Streeterville”), a Utah limited liability company, pursuant to which the Company issued Streeterville a convertible promissory note in the original principal amount of $3,320,000, convertible into shares of Common Stock, $0.001 par value per share, of the Company, for $3,000,000 in gross proceeds. By written consent dated May 10, 2022, as permitted by Section 228 of the Delaware General Corporation Law and Section 8 of Article II of our bylaws, the stockholders who have the authority to vote a majority of the outstanding shares of Common Stock approved the following corporate actions: (i) the entry into a purchase agreement dated as of May 6, 2022 by and between the Company and Streeterville, pursuant to which the Company issued the note dated as of May 6, 2022 to Streeterville and (ii) the issuance of shares of Common Stock in excess of 19.99% of the currently issued and outstanding shares of Common Stock of the Company upon the conversion of the note. The Company settled a convertible promissory note of $375,000 on November 16, 2022, and issued 445,749 shares of the Company’s Common Stock on November 17, 2022. The Company settled convertible promissory notes of $200,000 on January 18, 2023, $200,000 on February 3, 2023, $175,000 on February 8, 2023, $250,000 on February 15, 2023, $250,000 on March 8, 2023, $125,000 on March 24, 2023,$150,000 on September 14, 2023, $200,000 on October 7, 2023 and $175,000 on November 8, 2023, respectively, and issued 4,719, 4,688, 4,102, 5,860, 5,591, 2,913, 3,496, 131,585 and 115,137 shares of the Company’s common stock on January 19, 2023, February 6, 2023, February 8, 2023, February 15, 2023, March 15, 2023, March 29, 2023, September 14, 2023, October 7, 2023 and November 8, 2023, respectively for the year ended December 31, 2023.

 

On March 13, 2023, the Company entered into a securities purchase agreement with Streeterville, pursuant to which the Company issued Streeterville a convertible promissory note in the original principal amount of $3,320,000, convertible into shares of Common Stock, $0.001 par value per share, of the Company, for $3,000,000 in gross proceeds. By written consent dated March 6, 2023, as permitted by Section 228 of the Delaware General Corporation Law and Section 8 of Article II of our bylaws, the stockholders who have the authority to vote a majority of the outstanding shares of Common Stock approved the following corporate actions: (i) the entry into a purchase agreement, with terms substantially the same as the agreement attached in the aforesaid purchase agreement, by and between the Company and Streeterville, pursuant to which the Company issued an unsecured convertible promissory to Streeterville; and (ii) the issuance of shares of Common Stock in excess of 19.99% of the currently issued and outstanding shares of Common Stock of the Company upon the conversion of the note. The Company settled convertible promissory notes of $300,000 on September 7, 2023, $200,000 on October 10, 2023, $175,000 on October 13, 2023, $150,000 on November 16, 2023, $150,000 on December 5, 2023, and $150,000 on December 29, 2023, respectively, and issued 41,829, 41,736, 36,920, 109,075, 109,075, and 137,644, shares of the Company’s common stock on September 12, 2023, October 11, 2023, October 13, 2023, November 20, 2023, December 7, 2023, and December 29, 2023, respectively, for the year ended December 31, 2023. The Company settled convertible promissory notes of $150,000 on February 1, 2024, $150,000 on February 15, 2024 and $150,000 on April 18, 2024, respectively, and issued 160,174, 152,620 and 159,547 shares of the Company’s common stock on February 1, 2024, February 10, 2024, and April 23, 2024, respectively, for the nine months ended September 30, 2024.

 

The above two unsettled convertible promissory notes, issued on May 6, 2022 and March 13, 2023, have a maturity date of 12 months with an interest rate of 10% per annum. The Company retains the right to prepay the note at any time prior to conversion with an amount in cash equal to 125% of the principal that the Company elects to prepay at any time six months after the issue date, subject to maximum monthly redemption amount of $375,000 and $375,000, respectively. On or before the close of business on the third trading day of redemption, the Company should deliver conversion shares via “DWAC” (DTC’s Deposit/Withdrawal at Custodian system). The Company will be required to pay the redemption amount in cash, or chooses to satisfy a redemption in registered stock or unregistered stock, such stock shall be issued at 80% of the average of the lowest “VWAP” (the volume-weighted average price of the Common Stock on the principal market for a particular Trading Day or set of Trading Days) during the fifteen trading days immediately preceding the redemption notice is delivered.

 

For the above two unsettled convertible promissory notes, upon evaluation, the Company determined that the Agreements contained embedded beneficial conversion features which met the definition of Debt with Conversion and Other Options covered under the Accounting Standards Codification topic 470 (“ASC 470”). According to ASC 470, an embedded beneficial conversion feature present in a convertible instrument shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. Pursuant to the agreements, the Company shall recognize embedded beneficial conversion features three months after commitment date of $913,000 and $913,000 respectively. Beneficial conversion features have been recognized into discount on convertible promissory notes and additional paid-in capital and such discount will be amortized in 12 months until the notes will be settled. For the year ended December 31, 2023, the Company recognized the amortization of beneficial conversion feature $218,750 and $820,448 to profit with respect to these two unsettled convertible promissory notes. For the nine months ended September 30, 2024, the Company has recognized the amortization of beneficial conversion feature of $nil and $92,552 to profit for the above two unsettled convertible promissory notes.
v3.24.3
Equity
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
EQUITY

13. EQUITY

 

Common stock issued in private placements

 

On January 9, 2023, the Company entered into a certain securities purchase agreement with Ms. Huiwen Hu, an affiliate of the Company, and certain other purchasers who are non-U.S. Persons (as defined in Regulation S under the Securities Act of 1933, as amended), pursuant to which the Company agreed to sell an aggregate of 700,000 shares of its common stock, at a purchase price of $60.5 per share (“January 2023 PIPE”). The gross proceeds to the Company from the January 2023 PIPE were $42.35 million. Since Ms. Huiwen Hu is an affiliate of the Company, the January 2023 PIPE has been approved by the Audit Committee as well as the Board of Directors of the Company.

 

On July 31, 2023, the Company entered into a certain securities purchase agreement with Mr. Wenhao Cui, an affiliate of the Company, and certain other purchasers who are non-U.S. Persons (as defined in Regulation S under the Securities Act of 1933, as amended), pursuant to which the Company agreed to sell an aggregate of 560,000 shares of its common stock, at a purchase price of $17.50 per share (“August 2023 PIPE”). The gross proceeds to the Company from the January 2023 PIPE were $9.8 million.

 

On November 16, 2023, the Company entered into a certain securities purchase agreement with certain purchasers who are non-U.S. Persons (as defined in Regulation S under the Securities Act of 1933, as amended), pursuant to which the Company agreed to sell an aggregate of 15,000,000 shares of its common stock, at a purchase price of $2.09 per share (“November 2023 PIPE”). The gross proceeds to the Company from the November 2023 PIPE were $31.35 million.

 

Solely for accounting purposes, the number of shares and the purchase price per share discussed above have been retroactively restated to reflect the reverse stock split. Please refer to “Note 13 - Reverse Stock Split of Common Stock” for further details.

 

On June 7, 2024, the Company entered into a certain securities purchase agreement with certain purchasers who are non-U.S. Persons (as defined in Regulation S under the Securities Act of 1933, as amended), pursuant to which the Company agreed to sell an aggregate of 30,000,000 shares of its common stock, at a purchase price of $1.23 per share (“June 2024 PIPE”). The gross proceeds to the Company from the June 2024 PIPE were $36.90 million.

 

Common stock issued pursuant to the conversion of convertible promissory notes

 

On March 13, 2023, the Company entered into a securities purchase agreement with Streeterville, pursuant to which the Company issued Streeterville a convertible promissory note in the original principal amount of $3,320,000, convertible into shares of Common Stock, $0.001 par value per share, of the Company, for $3,000,000 in gross proceeds. The Company settled convertible promissory notes issued on March 13, 2023 of $300,000 on September 7, 2023, $200,000 on October 10, 2023, $175,000 on October 13, 2023, $150,000 on November 16, 2023, $150,000 on December 5, 2023, and $150,000 on December 29, 2023, respectively, and issued 41,829, 41,736, 36,920, 109,075, 109,075, and 137,644, shares of the Company’s common stock on September 12, 2023, October 11, 2023, October 13, 2023, November 20, 2023, December 7, 2023, and December 29, 2023, respectively, for the year ended December 31, 2023. The Company settled convertible promissory notes of $150,000 on February 1, 2024, $150,000 on February 15, 2024 and $150,000 on April 18,2024 respectively, and issued 160,174, 152,620 and 159,547 shares of the Company’s common stock on February 1, 2024, February 10, 2024, and April 23, 2024 respectively, for the nine months ended September 30, 2024.

 

Solely for accounting purposes, the number of shares and the purchase price per share have been retroactively restated to reflect the reverse stock split. Please refer to “Note 13 - Reverse Stock Split of Common Stock” for further details.

 

Reverse stock split of common stock

 

On October 30, 2023, The Company completed a 1-for-50 reverse stock split, where every fifty (50) shares of the Company’s pre-split issued and outstanding common stock, par value $0.001 per share, were combined into one (1) share of the Company’s post-split common stock, without any change in par value per share.

 

The reverse stock split applied to the issued shares of the Company on the date of the reverse stock split and does not have any retroactive effect on the Company’s shares prior to that date. However, for accounting purposes only, references to our ordinary shares in this quarterly report are stated as having been retroactively adjusted and restated to give effect to the reverse stock split, as if the reverse stock split had occurred by the relevant earlier date.

 

Share Issuances to Service Providers

 

 For the nine months ended September 30, 2023, the Company issued under its 2023 Stock Incentive Plan a total of 220,000 shares of common stock to certain service providers, and recorded $5,698,000 in stock-based compensation expenses.

 

There were no issuances of securities from the 2023 Stock Incentive Plan for the nine months ended September 30, 2024 and as such, no stock-based compensation expense was recognized for the period.

 

Common stocks issued for exercise of warrants by holders of warrants

 

Warrants

 

A summary of warrants activity for the nine months ended September 30, 2024 was as follows:

 

   Number of
shares		   Weighted
average life		   Weighted
average
exercise
price		   Intrinsic
Value		 
                 
Balance of warrants outstanding as of December 31, 2023   77,093    3.70 years   $7.15    
-
 
Granted   
-
    -    
-
    
-
 
Exercised   
-
    -   $
-
    
-
 
Balance of warrants outstanding as of September 30, 2024   77,093    3.70 years   $7.15    
-
 

 

As of September 30, 2024, the Company had 77,093 shares of warrants, among which 1,093 shares of warrants were issued to two individuals in private placements, and 76,000 shares of warrants were issued in three private placements closed on September 22, 2021.

 

In connection with 76,000 shares of warrants, the Company issued warrants to investors to purchase a total of 76,000 ordinary shares with a warrant term of five (5) years. The warrants have an exercise price of $28.75 per share.

 

The Warrants ended on September 30, 2024 are subject to anti-dilution provisions to reflect stock dividends and splits or other similar transactions, but not as a result of future securities offerings at lower prices. The warrants did not meet the definition of liabilities or derivatives, and as such they are classified as equity.
v3.24.3
Income Per Share
 9 Months Ended
Sep. 30, 2024
Income Per Share [Abstract]  
INCOME PER SHARE

14. INCOME PER SHARE

 

Basic income per share is computed by dividing the net profit or loss by the weighted average number of common shares outstanding during the period. As of September 30, 2024, the principal amount and interest expense of convertible promissory notes are $2,443,358 and $1,724,946. Total obligations of $4,168,304 may be dilutive common shares in the future.

 

The number of warrants is excluded from the computation as the anti-dilutive effect.

 

The following table sets forth the computation of basic and diluted loss per common share for the nine months ended September 30, 2024 and 2023 respectively:

 

   For the Nine Months Ended
September 30,		 
   2024   2023 
Net income (loss)  $7,752,844   $(3,707,295)
           
Weighted Average Shares Outstanding-Basic   16,671,646    3,074,862 
Weighted Average Shares Outstanding-Diluted   22,035,982    4,006,649 
Net income (loss) per share - basic and diluted          
Net income (loss) per share – basic  $0.47   $(1.21)
Net income (loss) per share – diluted  $0.35   $(0.93)
v3.24.3
Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Taxes [Abstract]  
INCOME TAXES

15. INCOME TAXES

 

The Enterprise Income Tax Law of the People’s Republic of China (“PRC tax law”), which was effective on January 1, 2008, stipulates those domestic enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%. Under the PRC tax law, companies are required to make quarterly estimate payments based on 25% tax rate; companies that received preferential tax rates are also required to use a 25% tax rate for their installment tax payments. The overpayment, however, will not be refunded and can only be used to offset future tax liabilities.

  

The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits and measures the unrecognized benefits associated with the tax positions. For the nine months ended September 30, 2024, the Company had no unrecognized tax benefits. Due to uncertainties surrounding future utilization, the Company estimates there will not be sufficient future income to realize the deferred tax assets for certain subsidiaries and a VIE. As of September 30, 2024 and December 31, 2023, the Company had deferred tax assets of $11,691,760 and $11,294,960, respectively. The Company maintains a full valuation allowance on its net deferred tax assets as of September 30, 2024 and December 31, 2023.

 

The Company does not anticipate any significant increase in its liability for unrecognized tax benefit within the next 12 months. The Company will classify interest and penalties related to income tax matters, if any, in income tax expense.

 

For the nine months ended September 30, 2024 and 2023, the Company had current income tax expenses of $3,744,060 and $3,444,639, respectively, and deferred income tax expense of $554,652 and benefit of $569,559 in the connection of intangible assets generated from acquisitions.

 

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. The Company is subject to income taxes in the PRC. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. There were no uncertain tax positions as of September 30, 2024 and December 31, 2023, and the Company does not believe that its unrecognized tax benefits will change over the next twelve months.
v3.24.3
Related Party Transactions and Balances
 9 Months Ended
Sep. 30, 2024
Related Party Transactions and Balances [Abstract]  
RELATED PARTY TRANSACTIONS AND BALANCES

16. RELATED PARTY TRANSACTIONS AND BALANCES

 

1) Nature of relationships with related parties

 

Name   Relationship with the Company
Guangzhou Chengji Investment Development Co., Ltd. (“Guangzhou Chengji”)   Controlled by Mr. Weicheng Pan, who is a former independent director of the Company.
Yunfeihu International E-commerce Group Co., Ltd (“Yunfeihu”)   An affiliate of the Company, over which an immediate family member of Chief Executive Officer owns equity interest and plays the role of director and senior management
Shenzhen Tongdow International Trade Co., Ltd. (“TD International Trade”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Beijing Tongdow E-commerce Co., Ltd. (“Beijing TD”)   Wholly owned by TD E-commerce, which is controlled by an immediate family member of Chief Executive Officer of the Company
Shanghai Tongdow Supply Chain Management Co., Ltd.
(“Shanghai TD”)		   Controlled by an immediate family member of Chief Executive Officer of the Company
Guangdong Tongdow Xinyi Cable New Material Co., Ltd. (“Guangdong TD”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Yangzhou Lishunwu E-commerce Co., Ltd. (Formerly named: Yangzhou Tongdow E-commerce Co., Ltd.)
(“Yangzhou TD”)		   Controlled by an immediate family member of Chief Executive Officer of the Company
Ningbo Xinwurong Supply Chain Management Co., Ltd. (Formerly named: Tongdow (Zhejiang) Supply Chain Management Co., Ltd.)
(“Zhejiang TD”)		   Controlled by an immediate family member of Chief Executive Officer of the Company
Shenzhen Meifu Capital Co., Ltd. (“Shenzhen Meifu”)   Controlled by Chief Executive Officer of the Company
Shenzhen Tiantian Haodian Technology Co., Ltd. (“TTHD”)   Wholly owned by Shenzhen Meifu
Hainan Tongdow International Trade Co., Ltd. (“Hainan TD”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Yunfeihu modern logistics Co., Ltd. (“Yunfeihu Logistics”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Shenzhen Tongdow Jingu Investment Holding Co., Ltd. (“Shenzhen Jingu”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Tongdow E-commerce Group Co., Ltd. (“TD E-commerce”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Katie Ou   Shareholder of BAIYU Holdings Inc.

 

2) Balances with related parties

 

- Due to related party

 

   September 30,
2024		   December 31,
2023		 
TD E-commerce  $38,474,692   $38,121,056 
Total due to related party  $38,474,692   $38,121,056 

 

The amount due to related parties is non-trade in nature, unsecured, non-interest bearing and is not expected to be repaid in the next twelve months.
v3.24.3
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES

17. COMMITMENTS AND CONTINGENCIES

 

1) Commitments

 

a non-cancellable operating leases

 

The following table sets forth our contractual obligations as of September 30, 2024:

 

   Payment due by September 30 
   Total   2024   2025   2026 
Operating lease commitments for property management expenses under lease agreements  $1,662   $1,662   $
          -
   $
           -
 

 

2) Contingencies

 

None.
v3.24.3
Risks and Uncertainties
 9 Months Ended
Sep. 30, 2024
Risks and Uncertainties [Abstract]  
Risks and uncertainties

18. Risks and uncertainties

 

(1) Credit risk

 

Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash and cash equivalents and trade receivables with its customers. The maximum exposure of such assets to credit risk is their carrying amount as of the balance sheet dates. As of September 30, 2024, approximately $82,591 was primarily deposited in financial institutions located in Mainland China, which were uninsured by the government authority. To limit exposure to credit risk relating to deposits, the Company primarily place cash deposits with large financial institutions in China, which management believes are of high credit quality. The Company considers the credit standing of customers when making sales to manage the credit risk. Considering the nature of the business at current, the Company believes that the credit risk is not material to its operations.

 

The Company’s operations are carried out in Mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation, and the extraction of mining resources, among other factors.

 

(2) Liquidity risk

 

The Company is also exposed to liquidity risk which is the risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.

  

(3) Foreign currency risk

 

Substantially all of the Company’s operating activities and the Company’s major assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts.

 

The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Where there is a significant change in value of RMB, the gains and losses resulting from translation of financial statements of a foreign subsidiary will be significantly affected.

Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods:

 

   September 30,   December 31, 
   2024   2023 
Balance sheet items, except for equity accounts   7.0176    7.0827 

 

   For the nine months ended
September 30,		 
   2024   2023 
Items in the statements of operations and comprehensive income (loss), and statements of cash flows   7.2043    7.0148 

 

(4) Economic and political risks

 

The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

 

(5) Risks related to industry

 

The Company sells precious products to customers through our industrial relationship. Sales contracts are entered into with each customer. The Company is the principal under the precious metal direct sales model as the Company controls the products with the ability to direct the use of, and obtain all the remaining benefits from the precious metal products substantially before they are sold to its customers. The Company has a single performance obligation to sell metal products to the buyers. The Company estimates the amount of variable consideration, including sales return using the expected value method and includes variable consideration in the transaction price to the extent that it is probable that a significant reversal will not occur. Revenue for precious metal trading under the direct sales model is recognized at a point in time when the single performance obligation is satisfied when the products are delivered to the customer. We are under the risk of the economic environment in general and specific to the precious metal industry and China as well as changes to the existing governmental regulations.

 

Commodity trading in China is subject to seasonal fluctuations, which may cause our revenues to fluctuate from quarter to quarter. We generally experience less user traffic and purchase orders during national holidays in China, particularly during the Chinese New Year holiday season in the first quarter of each year. Consequently, the first quarter of each calendar year generally contributes the smallest portion of our annual revenues. Furthermore, as we are substantially dependent on sales of precious metals, our quarterly revenues and results of operations are likely to be affected by price fluctuation under macroeconomic circumstances these years.

 

As our revenues have grown rapidly in recent years, these factors are difficult to discern based on our historical results, which, therefore, should not be relied on to predict our future performance. Our financial condition and results of operations for future periods may continue to fluctuate. As a result, the trading price of our stock may fluctuate from time to time due to seasonality.
v3.24.3
Subsequent Events
 9 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

19. SUBSEQUENT EVENTS

 

The Company has reviewed its operations for potential disclosure or financial statement impacts related to events occurring after September 30, 2024, but prior to the release of the unaudited consolidated financial statements contained in this quarterly report on Form 10-Q were issued.

 

On October 4, 2024, the Company received a notification letter from the staff at the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the Staff has determined to delist the Company’s common stock from Nasdaq pursuant to Nasdaq Listing Rule 5101 and IM-5101-1. On October 7, 2024, the Company filed a request for hearing to appeal the Staff’s determination.

 

On October 28, 2024, BMYA New Energy Technology Inc., a subsidiary of the Company, entered into a Supplementary Agreement to the Purchase and Sale Contract with Feng’s Auto Parts Inc., which clarifies certain commercial arrangements between the parties under that certain Contracts of Purchase and Sale entered into by and between the parties dated August 23, 2024.

 

The Company has determined that there are no other items to disclose or require adjustments.
v3.24.3
Pay vs Performance Disclosure - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Pay vs Performance Disclosure        
Net Income (Loss) $ 3,539,462 $ 1,062,214 $ 8,878,549 $ (2,540,738)
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Sep. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.3
Accounting Policies, by Policy (Policies)
 9 Months Ended
Sep. 30, 2024
Summary of Significant Accounting Policies [Abstract]  
Basis of presentation

(a) Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

The unaudited interim condensed consolidated financial information as of September 30, 2024 and for the nine months ended September 30, 2024 and 2023 have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures, which are normally included in annual condensed consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K for the fiscal year ended December 31, 2023 previously filed with the SEC on March 22, 2024.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited condensed consolidated financial position as of September 30, 2024 and its unaudited condensed consolidated results of operations for the nine months ended September 30, 2024 and 2023, and its unaudited condensed consolidated cash flows for the nine months ended September 30, 2024 and 2023, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the fiscal year or any future period.

 
Use of estimates

(b) Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. Significant accounting estimates reflected in the financial statements include: (i) useful lives and residual value of long-lived assets; (ii) the impairment of long-lived assets and investments; (iii) the valuation allowance of deferred tax assets; (iv) estimates of allowance for doubtful accounts, including loans receivable from third parties and related parties; (v) valuation of Inventory; and (vi) contingencies and litigation.
Foreign currency translation

(c) Foreign currency translation

The Company’s financial information is presented in U.S. dollars (“USD”). The functional currency of the Company is the Chinese Yuan Renminbi (“RMB”), the currency of PRC. Any transactions which are denominated in currencies other than RMB are translated into RMB at the exchange rate quoted by the People’s Bank of China prevailing at the dates of the transactions, and exchange gains and losses are included in the statements of operations as foreign currency transaction gain or loss. The consolidated financial statements of the Company have been translated into U.S. dollars in accordance with ASC 830, Foreign Currency Matters. The financial information is first prepared in RMB and then translated into U.S. dollars at period-end exchange rates for assets and liabilities and average exchange rates for revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.
Convertible promissory notes

(d) Convertible promissory notes

Convertible promissory notes are recognized initially at fair value, net of upfront fees, debt discounts or premiums, debt issuance costs and other incidental fees. Upfront fees, debt discounts or premiums, debt issuance costs and other incidental fees are recorded as a reduction of the proceeds received and the related accretion is recorded as interest expense in the consolidated income statements over the estimated term of the facilities using the effective interest method.
Beneficial conversion feature

(e) Beneficial conversion feature

The Company evaluates the conversion feature to determine whether it was beneficial as described in ASC 470-20. The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible notes payable and may not be settled in cash upon conversion, is treated as a discount to the convertible notes payable. This discount is amortized over the period from the date of issuance to the date the notes are due using the effective interest method. If the notes payable are retired prior to the end of their contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the shares of common stock at the commitment date to be received upon conversion.
Recent accounting pronouncement

(f) Recent accounting pronouncement

In November 2023, the FASB issued guidance to enhance disclosure of expenses of a public entity’s reportable segments. The new guidance requires a public entity to disclose: (1) on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, (2) on an annual and interim basis, an amount for other segment items (the difference between segment revenue less the significant expenses disclosed under the significant expense principle and each reported measure of segment profit or loss), including a description of its composition, (3) on an annual and interim basis, information about a reportable segment’s profit or loss and assets previously required to be disclosed only on an annual basis, and (4) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and how to allocate resources. The new guidance also clarifies that if the CODM uses more than one measure of a segment’s profit or loss, one or more of those measures may be reported and requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this update and all existing segment disclosures. The guidance is effective for the current fiscal year 2024 annual reporting, and in the first quarter of 2025 for interim period reporting, with early adoption permitted. Upon adoption, this guidance should be applied retrospectively to all prior periods presented. We do not expect the adoption of this accounting standard to have an impact on our Consolidated Financial Statements.

In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures. On an annual basis, the new guidance requires a public entity to disclose: (1) specific categories in the rate reconciliation, (2) additional information for reconciling items that are equal to or greater than 5% of the amount computed by multiplying income (or loss) from continuing operations before income tax expense (or benefit) by the applicable statutory income tax rate, (3) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, with foreign taxes disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5% of total income taxes paid, (4) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (5) income tax expense (or benefit) from continuing operations disaggregated between federal (national), state and foreign. The guidance is effective for fiscal year 2025 annual reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. We do not expect the adoption of this accounting standard to have an impact on our Consolidated Financial Statements but will require certain additional disclosures.

In July 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in ASU 2023-07 improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The adoption of this guidance did not have a material impact on its financial position, results of operations and cash flows.

In December 2023, the FASB issued ASU 2023-08: Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60). For annual and interim reporting periods, the amendments in this Update require that an entity, including an entity that is subject to industry-specific guidance, disclose the following information: (1) The name, cost basis, fair value, and number of units for each significant crypto asset holding and the aggregate fair values and cost bases of the crypto asset holdings that are not individually significant, (2) For crypto assets that are subject to contractual sale restrictions, the fair value of those crypto assets, the nature and remaining duration of the restriction(s), and the circumstances that could cause the restriction(s) to lapse.

Other accounting standards that have been issued or proposed 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.
v3.24.3
Organization and Business Description (Tables)
 9 Months Ended
Sep. 30, 2024
Organization and Business Description [Abstract]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services The Company primarily conducts business through Shenzhen Baiyu Jucheng Data Technology Co., Ltd., Shenzhen Qianhai Baiyu Supply Chain Co., Ltd., Hainan Jianchi Import and Export Co., Ltd., and Shenzhen Tongdow Internet Technology Co., Ltd. to offer the commodity trading business and supply chain management services to customers in the PRC. Supply chain management services consist of loan recommendation services and commodity product distribution services.
Name   Background   Ownership
HC High Summit Holding Limited (“HC High BVI”)  

A BVI company

Incorporated on March 22, 2018

A holding company

   100% owned by the Company
         
TD Internet of Things Technology Company Limited (“TD Internet Technology”) (Formerly Named: Tongdow Block Chain Information Technology Company Limited)  

A Hong Kong company

Incorporated on February 14, 2020

A holding company

   100% owned by HC High BVI 
         
Hainan Baiyu Cross-border E-commerce Co., Ltd. (“Hainan Baiyu”)  

A Hong Kong company

Incorporated on June 19, 2002

A holding company

   WFOE, 100% owned by Tongdow HK
         
Zhong Hui Dao Ming Investment Management Limited (“ZHDM HK”)  

A Hong Kong company

Incorporated on June 19, 2002

A holding company

   100% owned by HC High BVI
         
Hong Kong Tongyuan Energy Storage Smart Electric Co., Ltd (“Tongdow HK”) (Formerly Named: Tongdow E-trade Limited)  

A Hong Kong company

Incorporated on November 25, 2010

A holding company

   100% owned by HC High BVI
         
Shanghai Jianchi Supply Chain Co., Ltd. (“Shanghai Jianchi”)  

A PRC company and deemed a wholly foreign owned enterprise (“WFOE”)

Incorporated on April 2, 2020

Registered capital of $10 million

A holding company

   WFOE, 100% owned by TD Internet Technology
         
Tongdow (Hainan) Data Technology Co., Ltd. (“Tondow Hainan”)  

A PRC limited liability company

Incorporated on July 16, 2020

Registered capital of $1,417,736 (RMB10 million)  

   A wholly owned subsidiary of Shanghai Jianchi
         
Hainan Jianchi Import and Export Co., Ltd. (“Hainan Jianchi”)  

A PRC limited liability company

Incorporated on December 21, 2020

Registered capital of $7,632,772 (RMB50 million) with registered capital of $0 (RMB0) paid-up

   A wholly owned subsidiary of Shanghai Jianchi

Shenzhen Baiyu Jucheng Data Techonology Co., Ltd. (“Shenzhen Baiyu Jucheng”)  

A PRC limited liability company

Incorporated on December 30, 2013

Registered capital of $1,417,736 (RMB10 million) with registered capital fully paid-up

   VIE of Hao Limo Technology (Beijing) Co., Ltd. before June 25, 2020, and a wholly owned subsidiary of Shanghai Jianchi
         
Shenzhen Qianhai Baiyu Supply Chain Co., Ltd. (“Qianhai Baiyu”)  

A PRC limited liability company

Incorporated on August 17, 2016

Registered capital of $4,523,857 (RMB30 million) with registered capital of $736,506 (RMB5 million) paid-up

   A wholly owned subsidiary of Shenzhen Baiyu Jucheng
         
Shenzhen Tongdow Internet Technology Co., Ltd. (“Shenzhen Tongdow”)  

A PRC limited liability company

Incorporated on November 11, 2014

Registered capital of $1,628,320 (RMB10 million) with registered capital of $1,628,320 (RMB10 million) paid-up

   VIE of Shenzhen Baiyu Jucheng
         
Yangzhou Baiyu Venture Capital Co. Ltd. (“Yangzhou Baiyu Venture”)  

A PRC limited liability company

Incorporated on April 19, 2021

Registered capital of $30 million with registered capital of $7 million paid-up

   WFOE, 100% owned by Tongdow HK
         
Yangzhou Baiyu Cross-broder E-commerce Co., Ltd. (“Yangzhou Baiyu E-commerce”)  

A PRC limited liability company

Incorporated on May 14, 2021

Registered capital of $30 million (RMB200 million) with registered capital of $7 million (RMB48 million) paid-up

   100% owned by Yangzhou Baiyu Venture
         
Zhejiang Baiyu Lightweight New Material Co., Ltd. (“Zhejiang Baiyu”)    

 A PRC limited liability company

Incorporated on August 5, 2022

Registered capital of $1,483,569 (RMB10 million)

   100% owned by Yangzhou Baiyu E-commerce
         
Baiyu International Supply Chain PTE. LTD    A Singapore company Incorporated on June 28, 2023   100% owned by HC High BVI
         
Beijing Baiyu Jucheng Technology Co., LTD   

A PRC limited liability company Incorporated on January 19, 2024

Registered capital of $140,515 (RMB1 million)

   100% owned by Qianhai Baiyu
         
Electra New Energy Vehicle Inc   A Delaware, USA corporation company incorporated on April 10, 2024   100% owned by HC High BVI

 
v3.24.3
Loans Receivable from Third Parties (Tables)
 9 Months Ended
Sep. 30, 2024
Loans Receivable from Third Parties [Abstract]  
Schedule of Loans Receivable from Third Parties
   September 30,
2024		   December 31,
2023		 
Loans receivable from third parties  $301,335,694   $240,430,865 
           
v3.24.3
Inventories, Net (Tables)
 9 Months Ended
Sep. 30, 2024
Inventories, Net [Abstract]  
Schedule of Inventories The Company’s inventories consist of aluminum ingots, etc., that were purchased from third parties for resale to third parties. Inventories consisted of the following:
   September 30,
2024		   December 31,
2023		 
Aluminum ingots  $278,129   $259,806 
Inventories, net  $278,129   $259,806 
v3.24.3
Other Current Assets (Tables)
 9 Months Ended
Sep. 30, 2024
Other Current Assets [Abstract]  
Schedule of Other Current Assets
   September 30,
2024		   December 31,
2023		 
Other current assets:        
Deposit  $40,608   $35,888 
Interest receivables   8,194,485    5,931,541 
Prepayments   4,728,998    4,089,210 
Others   107,682    78,190 
Total  $13,071,773   $10,134,829 
v3.24.3
Plant and Equipment, Net (Tables)
 9 Months Ended
Sep. 30, 2024
Plant and Equipment, Net [Abstract]  
Schedule of Plant and Equipment, Net
   September 30,
2024		   December 31,
2023		 
Cost:        
Office equipment  $44,399   $43,999 
Accumulated depreciation:          
Office equipment  $(21,149)  $(11,909)
Plant and equipment, net  $23,250   $32,090 
v3.24.3
Goodwill (Tables)
 9 Months Ended
Sep. 30, 2024
Goodwill [Abstract]  
Schedule of Carrying Amount of Goodwill by Segment Changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2024, and years ended December 31, 2023 were as follows:
   Acquisition
of Qianhai
Baiyu		   Contractual
arrangement
with
Tongdow Internet
Technology		   Total 
             
Balance as of December 31, 2022  $65,022,402   $95,191,148   $160,213,550 
Foreign currency translation adjustments   (1,084,211)   (1,587,258)   (2,671,469)
Balance as of December 31, 2023   63,938,191    93,603,890    157,542,081 
Foreign currency translation adjustments  $593,134   $868,332   $1,461,466 
Balance as of September 30, 2024   64,531,325    94,472,222    159,003,547 
v3.24.3
Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2024
Intangible Assets [Abstract]  
Schedule of Intangible Assets
   September 30,
2024		   December 31,
2023		 
Customer relationships  $18,727,200   $18,555,071 
Software copyright   47,452,121    47,015,968 
Total   66,179,321    65,571,039 
           
Less: accumulative amortization   (26,473,836)   (20,285,422)
Intangible assets, net  $39,705,485   $45,285,617 
Schedule of Estimated Amortization Expense for these Intangible Assets The estimated amortization expense for these intangible assets in the next five years and thereafter is as follows:
Period ending September 30, 2024:  Amount 
current year  $6,000,233 
2025   8,000,310 
2026   6,481,888 
2027   4,616,921 
2028   4,274,966 
Thereafter   10,331,167 
Total:  $39,705,485 
v3.24.3
Bank Borrowings (Tables)
 9 Months Ended
Sep. 30, 2024
Bank Borrowings [Abstract]  
Schedule of Bank Borrowings Bank borrowings represent the amounts due to Baosheng County Bank that are due within one year. As of September 30, 2024 and December 31, 2023, bank loans consisted of the following:
   September 30,
2024		   December 31,
2023		 
Short-term bank loans:        
Loan from Baosheng County Bank  $997,492   $988,324 
Loan from Bank of Communications   
-
    69,324 
Total  $997,492   $1,057,648 
v3.24.3
Leases (Tables)
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Schedule of Supplemental Balance Sheet Information Related to Operating Lease Supplemental consolidated balance sheet information related to the operating lease was as follows:
   September 30,
2024		   December 31,
2023		 
         
Right-of-use assets, net  $15,300   $83,375 
           
Lease Liabilities-current  $16,186   $86,691 
Total  $16,186   $86,691 
Schedule of Weighted Average Remaining Lease Terms and Discount Rates for the Operating Lease The weighted average remaining lease terms and discount rates for the operating lease were as follows as of September 30, 2024:
Remaining lease term and discount rate:    
Weighted average remaining lease term (years) 
 
 
Weighted average discount rate   4.75%
Schedule of Maturities of Lease Liabilities The following is a schedule, by fiscal quarter, of maturities of lease liabilities as of September 30, 2024:
Period ended September 30, 2024:   Amount  
current year   $ 18,139  
Total lease payments     18,139  
Less: imputed interest     1,953  
Present value of lease liabilities     16,186  
v3.24.3
Other Current Liabilities (Tables)
 9 Months Ended
Sep. 30, 2024
Other Current Liabilities [Abstract]  
Schedule of Other Current Liabilities
   September 30,
2024		   December 31,
2023		 
Accrued payroll and benefit  $1,828,464   $3,210,615 
Other tax payable   5,457,777    3,352,643 
Accrued expenses   550,911    14,949 
Others   145    142 
Total  $7,837,297   $6,578,349 
v3.24.3
Convertible Promissory Notes (Tables)
 9 Months Ended
Sep. 30, 2024
Convertible Promissory Notes [Abstract]  
Schedule of Convertible Promissory Notes
   September 30,
2024		   December 31,
2023		 
Convertible promissory notes – principal  $2,443,358   $3,043,358 
Convertible promissory notes – discount   
-
    (159,219)
Convertible promissory notes – interest   1,724,946    1,400,483 
Convertible promissory notes, net  $4,168,304   $4,284,622 
v3.24.3
Equity (Tables)
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Schedule of Warrants Activity A summary of warrants activity for the nine months ended September 30, 2024 was as follows:
   Number of
shares		   Weighted
average life		   Weighted
average
exercise
price		   Intrinsic
Value		 
                 
Balance of warrants outstanding as of December 31, 2023   77,093    3.70 years   $7.15    
-
 
Granted   
-
    -    
-
    
-
 
Exercised   
-
    -   $
-
    
-
 
Balance of warrants outstanding as of September 30, 2024   77,093    3.70 years   $7.15    
-
 
v3.24.3
Income Per Share (Tables)
 9 Months Ended
Sep. 30, 2024
Income Per Share [Abstract]  
Schedule of Basic and Diluted Loss Per Common Share The following table sets forth the computation of basic and diluted loss per common share for the nine months ended September 30, 2024 and 2023 respectively:
   For the Nine Months Ended
September 30,		 
   2024   2023 
Net income (loss)  $7,752,844   $(3,707,295)
           
Weighted Average Shares Outstanding-Basic   16,671,646    3,074,862 
Weighted Average Shares Outstanding-Diluted   22,035,982    4,006,649 
Net income (loss) per share - basic and diluted          
Net income (loss) per share – basic  $0.47   $(1.21)
Net income (loss) per share – diluted  $0.35   $(0.93)
v3.24.3
Related Party Transactions and Balances (Tables)
 9 Months Ended
Sep. 30, 2024
Related Party Transactions and Balances [Abstract]  
Schedule of Relationship with Related Parties Nature of relationships with related parties
Name   Relationship with the Company
Guangzhou Chengji Investment Development Co., Ltd. (“Guangzhou Chengji”)   Controlled by Mr. Weicheng Pan, who is a former independent director of the Company.
Yunfeihu International E-commerce Group Co., Ltd (“Yunfeihu”)   An affiliate of the Company, over which an immediate family member of Chief Executive Officer owns equity interest and plays the role of director and senior management
Shenzhen Tongdow International Trade Co., Ltd. (“TD International Trade”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Beijing Tongdow E-commerce Co., Ltd. (“Beijing TD”)   Wholly owned by TD E-commerce, which is controlled by an immediate family member of Chief Executive Officer of the Company
Shanghai Tongdow Supply Chain Management Co., Ltd.
(“Shanghai TD”)		   Controlled by an immediate family member of Chief Executive Officer of the Company
Guangdong Tongdow Xinyi Cable New Material Co., Ltd. (“Guangdong TD”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Yangzhou Lishunwu E-commerce Co., Ltd. (Formerly named: Yangzhou Tongdow E-commerce Co., Ltd.)
(“Yangzhou TD”)		   Controlled by an immediate family member of Chief Executive Officer of the Company
Ningbo Xinwurong Supply Chain Management Co., Ltd. (Formerly named: Tongdow (Zhejiang) Supply Chain Management Co., Ltd.)
(“Zhejiang TD”)		   Controlled by an immediate family member of Chief Executive Officer of the Company
Shenzhen Meifu Capital Co., Ltd. (“Shenzhen Meifu”)   Controlled by Chief Executive Officer of the Company
Shenzhen Tiantian Haodian Technology Co., Ltd. (“TTHD”)   Wholly owned by Shenzhen Meifu
Hainan Tongdow International Trade Co., Ltd. (“Hainan TD”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Yunfeihu modern logistics Co., Ltd. (“Yunfeihu Logistics”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Shenzhen Tongdow Jingu Investment Holding Co., Ltd. (“Shenzhen Jingu”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Tongdow E-commerce Group Co., Ltd. (“TD E-commerce”)   Controlled by an immediate family member of Chief Executive Officer of the Company
Katie Ou   Shareholder of BAIYU Holdings Inc.
Schedule of Due to Related Parties Due to related party
   September 30,
2024		   December 31,
2023		 
TD E-commerce  $38,474,692   $38,121,056 
Total due to related party  $38,474,692   $38,121,056 
v3.24.3
Commitments and Contingencies (Tables)
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies [Abstract]  
Schedule of Contractual Obligations The following table sets forth our contractual obligations as of September 30, 2024:
   Payment due by September 30 
   Total   2024   2025   2026 
Operating lease commitments for property management expenses under lease agreements  $1,662   $1,662   $
          -
   $
           -
 
v3.24.3
Risks and Uncertainties (Tables)
 9 Months Ended
Sep. 30, 2024
Risks and Uncertainties [Abstract]  
Schedule of Translation of Amounts Translation of amounts from RMB into US$ has been made at the following exchange rates for the respective periods:
   September 30,   December 31, 
   2024   2023 
Balance sheet items, except for equity accounts   7.0176    7.0827 
   For the nine months ended
September 30,		 
   2024   2023 
Items in the statements of operations and comprehensive income (loss), and statements of cash flows   7.2043    7.0148 
v3.24.3
Organization and Business Description (Details) - Schedule of Loan Recommendation Services and Commodity Product Distribution Services
 9 Months Ended
Sep. 30, 2024
HC High Summit Holding Limited (“HC High BVI”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A BVI company Incorporated on March 22, 2018 A holding company
Ownership 100% owned by the Company
TD Internet of Things Technology Company Limited (“TD Internet Technology”) (Formerly Named: Tongdow Block Chain Information Technology Company Limited) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A Hong Kong company Incorporated on February 14, 2020 A holding company
Ownership 100% owned by HC High BVI
Hainan Baiyu Cross-border E-commerce Co., Ltd. (“Hainan Baiyu”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A Hong Kong company Incorporated on June 19, 2002 A holding company
Ownership WFOE, 100% owned by Tongdow HK
Zhong Hui Dao Ming Investment Management Limited (“ZHDM HK”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A Hong Kong company Incorporated on June 19, 2002 A holding company
Ownership 100% owned by HC High BVI
Hong Kong Tongyuan Energy Storage Smart Electric Co., Ltd (“Tongdow HK”) (Formerly Named: Tongdow E-trade Limited) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A Hong Kong company Incorporated on November 25, 2010 A holding company
Ownership 100% owned by HC High BVI
Shanghai Jianchi Supply Chain Co., Ltd. (“Shanghai Jianchi”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A PRC company and deemed a wholly foreign owned enterprise (“WFOE”) Incorporated on April 2, 2020 Registered capital of $10 million A holding company
Ownership WFOE, 100% owned by TD Internet Technology
Tongdow (Hainan) Data Technology Co., Ltd. (“Tondow Hainan”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A PRC limited liability company Incorporated on July 16, 2020 Registered capital of $1,417,736 (RMB10 million)
Ownership A wholly owned subsidiary of Shanghai Jianchi
Hainan Jianchi Import and Export Co., Ltd. (“Hainan Jianchi”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A PRC limited liability company Incorporated on December 21, 2020 Registered capital of $7,632,772 (RMB50 million) with registered capital of $0 (RMB0) paid-up
Ownership A wholly owned subsidiary of Shanghai Jianchi
Shenzhen Baiyu Jucheng Data Techonology Co., Ltd. (“Shenzhen Baiyu Jucheng”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A PRC limited liability company Incorporated on December 30, 2013 Registered capital of $1,417,736 (RMB10 million) with registered capital fully paid-up
Ownership VIE of Hao Limo Technology (Beijing) Co., Ltd. before June 25, 2020, and a wholly owned subsidiary of Shanghai Jianchi
Shenzhen Qianhai Baiyu Supply Chain Co., Ltd. (“Qianhai Baiyu”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A PRC limited liability company Incorporated on August 17, 2016 Registered capital of $4,523,857 (RMB30 million) with registered capital of $736,506 (RMB5 million) paid-up
Ownership A wholly owned subsidiary of Shenzhen Baiyu Jucheng
Shenzhen Tongdow Internet Technology Co., Ltd. (“Shenzhen Tongdow”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A PRC limited liability company Incorporated on November 11, 2014 Registered capital of $1,628,320 (RMB10 million) with registered capital of $1,628,320 (RMB10 million) paid-up
Ownership VIE of Shenzhen Baiyu Jucheng
Yangzhou Baiyu Venture Capital Co. Ltd. (“Yangzhou Baiyu Venture”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A PRC limited liability company Incorporated on April 19, 2021 Registered capital of $30 million with registered capital of $7 million paid-up
Ownership WFOE, 100% owned by Tongdow HK
Yangzhou Baiyu Cross-broder E-commerce Co., Ltd. (“Yangzhou Baiyu E-commerce”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A PRC limited liability company Incorporated on May 14, 2021 Registered capital of $30 million (RMB200 million) with registered capital of $7 million (RMB48 million) paid-up
Ownership 100% owned by Yangzhou Baiyu Venture
Zhejiang Baiyu Lightweight New Material Co., Ltd. (“Zhejiang Baiyu”) [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A PRC limited liability company Incorporated on August 5, 2022 Registered capital of $1,483,569 (RMB10 million)
Ownership 100% owned by Yangzhou Baiyu E-commerce
Baiyu International Supply Chain PTE. LTD [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A Singapore company Incorporated on June 28, 2023
Ownership 100% owned by HC High BVI
Beijing Baiyu Jucheng Technology Co., LTD [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A PRC limited liability company Incorporated on January 19, 2024 Registered capital of $140,515 (RMB1 million)
Ownership 100% owned by Qianhai Baiyu
Electra New Energy Vehicle Inc [Member]  
Schedule of Loan Recommendation Services and Commodity Product Distribution Services [Line Items]  
Background A Delaware, USA corporation company incorporated on April 10, 2024
Ownership 100% owned by HC High BVI
v3.24.3
Summary of Significant Accounting Policies (Details)
 1 Months Ended
Dec. 31, 2023
Summary of Significant Accounting Policies [Abstract]  
Tax benefit rate 5.00%
Income tax percentage 5.00%
v3.24.3
Loans Receivable from Third Parties (Details) - USD ($)
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Loans Receivable from Third Parties [Line Items]      
Collected from customer $ 51,521,185    
Interest rate 10.95%    
Interest income $ 20,113,673 $ 14,481,640  
Interest receivable 8,194,485   $ 5,931,541
Loans Receivable [Member]      
Loans Receivable from Third Parties [Line Items]      
Loans made to third parties $ 109,311,498    
v3.24.3
Loans Receivable from Third Parties (Details) - Schedule of Loans Receivable from Third Parties - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Schedule of Loans Receivable from Third Parties [Abstract]    
Loans receivable from third parties $ 301,335,694 $ 240,430,865
v3.24.3
Inventories, Net (Details) - Schedule of Inventories - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Schedule of Inventories [Abstract]    
Aluminum ingots $ 278,129 $ 259,806
Inventories, net $ 278,129 $ 259,806
v3.24.3
Other Current Assets (Details) - Schedule of Other Current Assets - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Other current assets:    
Deposit $ 40,608 $ 35,888
Interest receivables 8,194,485 5,931,541
Prepayments 4,728,998 4,089,210
Others 107,682 78,190
Total $ 13,071,773 $ 10,134,829
v3.24.3
Plant and Equipment, Net (Details) - USD ($)
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Plant and Equipment, Net [Abstract]    
Depreciation expense $ 9,488 $ 6,289
Currency translation difference $ 248 $ 231
v3.24.3
Plant and Equipment, Net (Details) - Schedule of Plant and Equipment, Net - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Schedule of Plant and Equipment, Net [Abstract]    
Office equipment $ 44,399 $ 43,999
Office equipment (21,149) (11,909)
Plant and equipment, net $ 23,250 $ 32,090
v3.24.3
Goodwill (Details) - Schedule of Carrying Amount of Goodwill by Segment - USD ($)
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Schedule of Carrying Amount of Goodwill by Segment [Line Items]    
Balance at beginning $ 157,542,081 $ 160,213,550
Foreign currency translation adjustments 1,461,466 (2,671,469)
Balance at ending 159,003,547 157,542,081
Acquisition of Qianhai Baiyu [Member]    
Schedule of Carrying Amount of Goodwill by Segment [Line Items]    
Balance at beginning 63,938,191 65,022,402
Foreign currency translation adjustments 593,134 (1,084,211)
Balance at ending 64,531,325 63,938,191
Contractual arrangement with Tongdow Internet Technology [Member]    
Schedule of Carrying Amount of Goodwill by Segment [Line Items]    
Balance at beginning 93,603,890 95,191,148
Foreign currency translation adjustments 868,332 (1,587,258)
Balance at ending $ 94,472,222 $ 93,603,890
v3.24.3
Intangible Assets (Details) - USD ($)
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Intangible Assets [Line Items]    
Estimated useful life term 5 years  
Amortization expense $ 6,634,441 $ 6,002,628
Currency translation amounts $ 446,027 $ 514,654
Customer Relationships [Member]    
Intangible Assets [Line Items]    
Estimated useful life term 6 years 2 months 12 days  
Software Copyright [Member]    
Intangible Assets [Line Items]    
Estimated useful life term 6 years 9 months 29 days  
Other Software Copyright [Member]    
Intangible Assets [Line Items]    
Estimated useful life term 10 years  
v3.24.3
Intangible Assets (Details) - Schedule of Intangible Assets - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount $ 66,179,321 $ 65,571,039
Less: accumulative amortization (26,473,836) (20,285,422)
Intangible assets, net 39,705,485 45,285,617
Customer relationships [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount 18,727,200 18,555,071
Software copyright [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross carrying amount $ 47,452,121 $ 47,015,968
v3.24.3
Intangible Assets (Details) - Schedule of Estimated Amortization Expense for these Intangible Assets
Sep. 30, 2024
USD ($)
Schedule of Estimated Amortization Expense for these Intangible Assets [Abstract]  
current year $ 6,000,233
2025 8,000,310
2026 6,481,888
2027 4,616,921
2028 4,274,966
Thereafter 10,331,167
Total: $ 39,705,485
v3.24.3
Bank Borrowings (Details)
¥ in Thousands
Sep. 30, 2024
USD ($)
Dec. 31, 2023
USD ($)
Aug. 31, 2023
CNY (¥)
Aug. 31, 2022
CNY (¥)
Bank Borrowings [Line Items]        
Total borrowings | $ $ 997,492 $ 1,057,648    
Baosheng County Bank [Member]        
Bank Borrowings [Line Items]        
Total borrowings | ¥       ¥ 7,000
Interest rate       7.80%
Bank of Communications [Member]        
Bank Borrowings [Line Items]        
Total borrowings $ 69,324 ¥ 490  
Interest rate     4.15%  
v3.24.3
Bank Borrowings (Details) - Schedule of Bank Borrowings
¥ in Thousands
Sep. 30, 2024
USD ($)
Dec. 31, 2023
USD ($)
Aug. 31, 2023
CNY (¥)
Short-term bank loans:      
Loan $ 997,492 $ 1,057,648  
Baosheng County Bank [Member]      
Short-term bank loans:      
Loan 997,492 988,324  
Bank of Communications [Member]      
Short-term bank loans:      
Loan $ 69,324 ¥ 490
v3.24.3
Leases (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Leases [Line Items]        
Lease term 24 months   24 months  
Amortization of right of use assets $ 22,355 $ 7,737 $ 68,075 $ 88,416
v3.24.3
Leases (Details) - Schedule of Supplemental Balance Sheet Information Related to Operating Lease - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Schedule of Supplemental Balance Sheet Information Related to Operating Lease [Abstract]    
Right-of-use assets, net $ 15,300 $ 83,375
Lease Liabilities-current 16,186 86,691
Total $ 16,186 $ 86,691
v3.24.3
Leases (Details) - Schedule of Weighted Average Remaining Lease Terms and Discount Rates for the Operating Lease
Sep. 30, 2024
Schedule of Weighted Average Remaining Lease Terms and Discount Rates for the Operating Lease [Abstract]  
Weighted average remaining lease term (years)
Weighted average discount rate 4.75%
v3.24.3
Leases (Details) - Schedule of Maturities of Lease Liabilities - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Schedule of Maturities of Lease Liabilities [Abstract]    
current year $ 18,139  
Total lease payments 18,139  
Less: imputed interest 1,953  
Present value of lease liabilities $ 16,186 $ 86,691
v3.24.3
Other Current Liabilities (Details) - Schedule of Other Current Liabilities - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Schedule of Other Current Liabilities [Abstract]    
Accrued payroll and benefit $ 1,828,464 $ 3,210,615
Other tax payable 5,457,777 3,352,643
Accrued expenses 550,911 14,949
Others 145 142
Total $ 7,837,297 $ 6,578,349
v3.24.3
Convertible Promissory Notes (Details) - USD ($)
 9 Months Ended 12 Months Ended
Apr. 23, 2024
Feb. 10, 2024
Feb. 01, 2024
Dec. 29, 2023
Dec. 07, 2023
Nov. 20, 2023
Nov. 08, 2023
Oct. 13, 2023
Oct. 11, 2023
Oct. 07, 2023
Sep. 14, 2023
Sep. 12, 2023
Mar. 29, 2023
Mar. 15, 2023
Mar. 13, 2023
Feb. 15, 2023
Feb. 08, 2023
Feb. 06, 2023
Jan. 19, 2023
Nov. 17, 2022
May 06, 2022
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Apr. 18, 2024
Feb. 15, 2024
Dec. 05, 2023
Nov. 16, 2023
Oct. 16, 2023
Oct. 10, 2023
Sep. 07, 2023
Mar. 24, 2023
Mar. 08, 2023
Feb. 03, 2023
Jan. 18, 2023
Nov. 16, 2022
Convertible Promissory Notes [Line Items]                                                                        
Common Stock, par value (in Dollars per share)                             $ 0.001             $ 0.001 [1]   $ 0.001 [1]                        
Gross proceeds                             $ 3,000,000           $ 3,000,000 $ 13,025,243                          
Common stock excess percentage issued                                         19.99%                              
Common stock excess percentage outstanding                                         19.99%                              
Convertible promissory note     $ 150,000 $ 150,000     $ 175,000 $ 175,000   $ 200,000 $ 150,000         $ 250,000 $ 175,000               $ 150,000 $ 150,000 $ 150,000 $ 150,000 $ 150,000 $ 200,000   $ 125,000 $ 250,000 $ 200,000 $ 200,000 $ 375,000
Shares issued upon conversion (in Shares)             115,137     131,585 3,496   2,913 5,591   5,860 4,102 4,688 4,719 445,749                                
Original principal amount                             $ 3,320,000                                          
Issuance of common stock issued percentage                             19.99%                                          
Issuance of common stock outstanding percentage                             19.99%                                          
Amortization of beneficial conversion feature                                           $ 92,552 $ 713,292                          
Securities Purchase Agreement [Member]                                                                        
Convertible Promissory Notes [Line Items]                                                                        
Principal amount                                         $ 3,320,000                              
Common Stock, par value (in Dollars per share)                                         $ 0.001                              
Atlas Sciences, LLC [Member]                                                                        
Convertible Promissory Notes [Line Items]                                                                        
Convertible promissory note                                                             $ 300,000          
Shares issued upon conversion (in Shares)       137,644 109,075 109,075   36,920 41,736     41,829                                                
Convertible Promissory Notes [Member]                                                                        
Convertible Promissory Notes [Line Items]                                                                        
Convertible promissory note                                                             $ 300,000          
Shares issued upon conversion (in Shares) 159,547 152,620 160,174                                                                  
Unsettled Convertible Promissory Notes One [Member]                                                                        
Convertible Promissory Notes [Line Items]                                                                        
Interest rate                                         10.00%                              
Principal percentage                                           125.00%                            
Redemption amount                                           $ 375,000                            
Percentage of stock issued                                           80.00%                            
Beneficial conversion feature amount                                           $ 913,000                            
Amortization of beneficial conversion feature                                             $ 218,750                        
Unsettled Convertible Promissory Notes Two [Member]                                                                        
Convertible Promissory Notes [Line Items]                                                                        
Interest rate                             10.00%                                          
Redemption amount                                           $ 375,000                            
Percentage of stock issued                                           80.00%                            
Beneficial conversion feature amount                                           $ 913,000                            
Amortization of beneficial conversion feature                                           $ 92,552   $ 820,448                        
[1] On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.
v3.24.3
Convertible Promissory Notes (Details) - Schedule of Convertible Promissory Notes - Convertible Promissory Notes [Member] - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Mar. 13, 2023
Schedule of Convertible Promissory Notes [Line Items]      
Convertible promissory notes – principal $ 2,443,358 $ 3,043,358 $ 3,320,000
Convertible promissory notes – discount (159,219)  
Convertible promissory notes – interest 1,724,946 1,400,483  
Convertible promissory notes, net $ 4,168,304 $ 4,284,622  
v3.24.3
Equity (Details) - USD ($)
 1 Months Ended 9 Months Ended
Jun. 07, 2024
Apr. 23, 2024
Feb. 10, 2024
Feb. 01, 2024
Dec. 29, 2023
Dec. 07, 2023
Nov. 20, 2023
Nov. 16, 2023
Nov. 08, 2023
Oct. 30, 2023
Oct. 13, 2023
Oct. 11, 2023
Oct. 07, 2023
Sep. 14, 2023
Sep. 12, 2023
Jul. 31, 2023
Mar. 29, 2023
Mar. 15, 2023
Mar. 13, 2023
Feb. 15, 2023
Feb. 08, 2023
Feb. 06, 2023
Jan. 19, 2023
Jan. 09, 2023
Nov. 17, 2022
May 06, 2022
Sep. 22, 2021
Sep. 30, 2024
Sep. 30, 2023
Apr. 18, 2024
Feb. 15, 2024
Dec. 31, 2023
Dec. 05, 2023
Oct. 16, 2023
Oct. 10, 2023
Sep. 07, 2023
Mar. 24, 2023
Mar. 08, 2023
Feb. 03, 2023
Jan. 18, 2023
Nov. 16, 2022
Equity [Line Items]                                                                                  
Issuance of common stock (in Dollars)                                                       $ 559,073                        
Gross proceeds (in Dollars)                                     $ 3,000,000             $ 3,000,000   $ 13,025,243                        
Amount settled for convertible promissory note (in Dollars)       $ 150,000 $ 150,000     $ 150,000 $ 175,000   $ 175,000   $ 200,000 $ 150,000           $ 250,000 $ 175,000                 $ 150,000 $ 150,000   $ 150,000 $ 150,000 $ 200,000   $ 125,000 $ 250,000 $ 200,000 $ 200,000 $ 375,000
Shares issue upon conversion                 115,137       131,585 3,496     2,913 5,591   5,860 4,102 4,688 4,719   445,749                                
Reverse stock split                   1-for-50 reverse stock split                                                              
Reverse stock split (in Dollars per share)                                     $ 0.001                 $ 0.001 [1]       $ 0.001 [1]                  
Issued warrants                                                       76,000                          
Warrant term                                                       5 years                          
Warrant [Member]                                                                                  
Equity [Line Items]                                                                                  
Warrants shares                                                       77,093                          
Exercise price (in Dollars per share)                                                       $ 28.75                          
Convertible Promissory Notes [Member]                                                                                  
Equity [Line Items]                                                                                  
Principal amount (in Dollars)                                     $ 3,320,000                 $ 2,443,358       $ 3,043,358                  
Amount settled for convertible promissory note (in Dollars)                                                                       $ 300,000          
Shares issue upon conversion   159,547 152,620 160,174                                                                          
Common Stock [Member]                                                                                  
Equity [Line Items]                                                                                  
Shares issue upon conversion   159,547 152,620 160,174 137,644 109,075 109,075                                                                    
January 2023 PIPE [Member]                                                                                  
Equity [Line Items]                                                                                  
Agreed to sell shares                                               700,000                                  
Purchase price per share (in Dollars per share)                                               $ 60.5                                  
Issuance of common stock (in Dollars)                                               $ 42,350,000                                  
August 2023 PIPE [Member]                                                                                  
Equity [Line Items]                                                                                  
Agreed to sell shares                               560,000                                                  
Purchase price per share (in Dollars per share)                               $ 17.5                                                  
Issuance of common stock (in Dollars)                               $ 9,800,000                                                  
November 2023 PIPE [Member]                                                                                  
Equity [Line Items]                                                                                  
Agreed to sell shares               15,000,000                                                                  
Purchase price per share (in Dollars per share)               $ 2.09                                                                  
Issuance of common stock (in Dollars)               $ 31,350,000                                                                  
June 2024 PIPE [Member]                                                                                  
Equity [Line Items]                                                                                  
Agreed to sell shares 30,000,000                                                                                
Purchase price per share (in Dollars per share) $ 1.23                                                                                
Issuance of common stock (in Dollars) $ 36,900,000                                                                                
First Purchase Notice [Member]                                                                                  
Equity [Line Items]                                                                                  
Common stock shares purchase                                     0.001                                            
Common Stock [Member]                                                                                  
Equity [Line Items]                                                                                  
Shares issue upon conversion                     36,920 41,736     41,829                                                    
Common Stock [Member]                                                                                  
Equity [Line Items]                                                                                  
Reverse stock split (in Dollars per share)                   $ 0.001                                                              
Received proceeds (in Dollars)                                                       $ 5,698,000                          
Issued warrants                                                       76,000                          
2023 Stock Incentive Plan [Member]                                                                                  
Equity [Line Items]                                                                                  
Received proceeds (in Dollars)                                                       $ 220,000                          
Private Placement [Member]                                                                                  
Equity [Line Items]                                                                                  
Warrants shares                                                     76,000 1,093                          
[1] On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.
v3.24.3
Equity (Details) - Schedule of Warrants Activity - Warrant [Member] - USD ($)
 9 Months Ended
Dec. 31, 2023
Sep. 30, 2024
Schedule of Warrants Activity [Line Items]    
Number of shares, Granted  
Weighted average exercise price, Granted  
Intrinsic Value, Granted  
Number of shares, Exercised  
Weighted average exercise price, Exercised  
Intrinsic Value, Exercised  
Number of shares balance of warrants outstanding 77,093 77,093
Weighted average life granted 3 years 8 months 12 days 3 years 8 months 12 days
Weighted average exercise exercised price Balance of warrants outstanding $ 7.15 $ 7.15
Intrinsic Value balance of warrants outstanding
v3.24.3
Income Per Share (Details)
 9 Months Ended
Sep. 30, 2024
USD ($)
Income Per Share [Line Items]  
Principal amount $ 2,443,358
Total obligations 4,168,304
Convertible Promissory Notes [Member]  
Income Per Share [Line Items]  
Interest expense of convertible promissory notes $ 1,724,946
v3.24.3
Income Per Share (Details) - Schedule of Basic and Diluted Loss Per Common Share - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Schedule of Basic and Diluted Loss Per Common Share [Abstract]        
Net income (loss) $ 3,173,257 $ 679,658 $ 7,752,844 $ (3,707,295)
Weighted Average Shares Outstanding-Basic [1] 38,782,001 3,016,281 16,671,646 3,074,862
Weighted Average Shares Outstanding-Diluted [1] 44,146,337 3,948,068 22,035,982 4,006,649
Net income (loss) per share - basic and diluted        
Net income (loss) per share – basic [1] $ 0.08 $ 0.23 $ 0.47 $ (1.21)
Net income (loss) per share – diluted [1] $ 0.07 $ 0.17 $ 0.35 $ (0.93)
[1] On October 30, 2023, the Company completed a 50:1 reverse stock split of our common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the reverse stock split. See Note 13 - Reverse stock split of common stock.
v3.24.3
Income Taxes (Details)
 9 Months Ended
Sep. 30, 2024
USD ($)
Sep. 30, 2024
CNY (¥)
Sep. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Income Taxes [Abstract]        
Uniform tax rate 25.00% 25.00%    
Estimate payments tax rate, percentage 25.00% 25.00%    
Tax payments, percentage 25.00% 25.00%    
Deferred tax assets $ 11,691,760     $ 11,294,960
Current income tax expenses 3,744,060   $ 3,444,639  
Deferred income tax benefit $ 554,652   $ 569,559  
Tax benefit percentage 50.00% 50.00%    
Underpayment of taxes (in Yuan Renminbi) | ¥   ¥ 100,000    
v3.24.3
Related Party Transactions and Balances (Details) - Schedule of Relationship with Related Parties
 9 Months Ended
Sep. 30, 2024
Guangzhou Chengji Investment Development Co., Ltd. (“Guangzhou Chengji”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by Mr. Weicheng Pan, who is a former independent director of the Company.
Yunfeihu International E-commerce Group Co., Ltd (“Yunfeihu”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company An affiliate of the Company, over which an immediate family member of Chief Executive Officer owns equity interest and plays the role of director and senior management
Shenzhen Tongdow International Trade Co., Ltd. (“TD International Trade”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by an immediate family member of Chief Executive Officer of the Company
Beijing Tongdow E-commerce Co., Ltd. (“Beijing TD”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Wholly owned by TD E-commerce, which is controlled by an immediate family member of Chief Executive Officer of the Company
Shanghai Tongdow Supply Chain Management Co., Ltd. (“Shanghai TD”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by an immediate family member of Chief Executive Officer of the Company
Guangdong Tongdow Xinyi Cable New Material Co., Ltd. (“Guangdong TD”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by an immediate family member of Chief Executive Officer of the Company
Yangzhou Lishunwu E-commerce Co., Ltd. (Formerly named: Yangzhou Tongdow E-commerce Co., Ltd.) (“Yangzhou TD”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by an immediate family member of Chief Executive Officer of the Company
Ningbo Xinwurong Supply Chain Management Co., Ltd. (Formerly named: Tongdow (Zhejiang) Supply Chain Management Co., Ltd.) (“Zhejiang TD”)* [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by an immediate family member of Chief Executive Officer of the Company
Shenzhen Meifu Capital Co., Ltd. (“Shenzhen Meifu”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by Chief Executive Officer of the Company
Shenzhen Tiantian Haodian Technology Co., Ltd. (“TTHD”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Wholly owned by Shenzhen Meifu
Hainan Tongdow International Trade Co.,Ltd. (“Hainan TD”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by an immediate family member of Chief Executive Officer of the Company
Yunfeihu modern logistics Co., Ltd. (“Yunfeihu Logistics”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by an immediate family member of Chief Executive Officer of the Company
Shenzhen Tongdow Jingu Investment Holding Co., Ltd. (“Shenzhen Jingu”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by an immediate family member of Chief Executive Officer of the Company
Tongdow E-commerce Group Co., Ltd. (“TD E-commerce”) [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Controlled by an immediate family member of Chief Executive Officer of the Company
Katie Ou [Member]  
Schedule of Relationship with Related Parties [Line Items]  
Relationship with the Company Shareholder of BAIYU Holdings Inc.
v3.24.3
Related Party Transactions and Balances (Details) - Schedule of Due to Related Parties - USD ($)
Sep. 30, 2024
Dec. 31, 2023
TD E-commerce [Member]    
Schedule of Due to Related Parties [Line Items]    
Due to related party $ 38,474,692 $ 38,121,056
Related Party [Member]    
Schedule of Due to Related Parties [Line Items]    
Due to related party $ 38,474,692 $ 38,121,056
v3.24.3
Commitments and Contingencies (Details) - Schedule of Contractual Obligations
Sep. 30, 2024
USD ($)
Schedule of Contractual Obligations [Abstract]  
2024 $ 1,662
2025
2026
Total $ 1,662
v3.24.3
Risks and Uncertainties (Details)
Sep. 30, 2024
USD ($)
Risks and Uncertainties [Abstract]  
Deposited amount $ 82,591
v3.24.3
Risks and Uncertainties (Details) - Schedule of Translation of Amounts
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Schedule of Translation of Amounts [Abstract]      
Balance sheet items, except for equity accounts 7.0176   7.0827
Items in the statements of operations and comprehensive income (loss), and statements of cash flows 7.2043 7.0148  
BAIYU (NASDAQ:BYU)
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