Common Stock and Additional Paid-In Capital |
3 Months Ended |
|---|---|
Mar. 31, 2025 | |
| Common Stock and Additional Paid-In Capital [Abstract] | |
| COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL | 15. COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL
In January 2023, 100 ordinary shares of Hongchang BVI were allotted and issued to the controlling stockholders, of par value US$1.00.
As per the Reorganization described in Note 1(b) History and reorganization of the Group, the consolidated financial statements were prepared as if the 100 shares had been in existence since the beginning of the periods presented. As per the Reverse merger described in Note 1(c), in the “Consolidated Statements of Stockholder’s Equity,” the 100 shares of the legal subsidiary (the accounting acquirer) were restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent (the accounting acquiree) issued in the reverse acquisition.
In preparation of the Merger Transactions, the following transactions were undertaken to reorganize the legal structure of Operating Entity. On January 13, 2023, Mr. Zengqiang Lin and Ms. Zhenzhu Lin, the existing stockholders of Hongchang Food established BVI-1 and BVI-2 in the British Virgin Islands, respectively. On January 18, 2023, Hongchang BVI was then incorporated by BVI-1 and BVI-2, which held 70% and 30% equity interests in Hongchang BVI, respectively. On February 6, 2023, Hongchang BVI incorporated a wholly owned subsidiary, Hongchang HK. On February 28, 2023, Hongchang HK incorporated WFOE in the PRC. WFOE then purchased 100% of the equity interests in Hongchang Food. After the Reorganization, Mr. Zengqiang Lin and Ms. Zhenzhu Lin held 70% and 30% of the equity interests in Hongchang Food through WFOE, respectively. As all the entities involved in the process of the Reorganization were under common ownership of Hongchang Food’s stockholders before and after the Reorganization, the Reorganization was accounted for in a manner similar to a pooling of interests with the assets and liabilities of the parties to the Reorganization carried over at their historical amounts. Therefore, the consolidated financial statements were prepared as if the 100 shares had been in existence since the beginning of the periods presented.
On August 21, 2023, the Company entered into the Share Exchange Agreement with Hongchang BVI and Hongchang BVI’s stockholders, the Selling Stockholders, in relation to the Hongchang Acquisition. BVI-1 is wholly owned by Mr. Zengqiang Lin and BVI-2 is wholly owned by Ms. Zhenzhu Lin. Mr. Zengqiang Lin has been a director of the Company since February 17, 2023, and Ms. Zhenzhu Lin is the sister of Mr. Zengqiang Lin. In accordance with the terms of the Share Exchange Agreement, the Selling Stockholders sold and transferred 100 shares of Hongchang BVI, constituting all of the issued and outstanding share capital of Hongchang BVI, to the Company in exchange for the Consideration Shares, of which 353,322,843 shares were issued to BVI-1 and 62,259,532 shares were issued to BVI-2. Therefore, in the “Consolidated Statements of Stockholders’ Equity,” the 100 shares of the legal subsidiary (the accounting acquirer) were restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent (the accounting acquiree) issued in the reverse acquisition.
In May 2023, Hongchang BVI received US$41,241,108 cash contribution from stockholders through its subsidiary Hongchang Food.
On September 1, 2023, upon closing the Merger Transactions, 100 shares of Hongchang BVI, par value US$1.00, constituting all of the issued and outstanding share capital of Hongchang BVI, were exchanged for the right to receive 415,582,375 shares of common stock of the Company, par value US$0.001. |