| DISCONTINUED OPERATIONS |
NOTE 4 – DISCONTINUED OPERATIONS
The Company’s subsidiary REIT Holdings (China) Limited (“REIT
Holdings”) and its subsidiaries were primarily engaged in municipal construction material sales business, municipal construction
projects and equipment manufacture and sales business. On December 31, 2024, the Company, with the Board approval, sold its 100% ownership
interest in REIT Holdings to a third-party buyer (the “Buyer”), a less-than 5% Class A shareholder of the Company, for a cash
consideration of $80,000 (based on the valuation assessed by a third party valuation firm), which was fully paid by the Buyer by December
31, 2024. The disposition was completed on December 31, 2024. The Company recorded a loss from the disposition of $3,577,279 for the year
ended December 31, 2024.
The discontinued operations represent a strategic
shift that has a major effect on the Company’s operations and financial results, which triggers discontinued operations accounting
in accordance with ASC 205-20-45. The results of operations related to the discontinued operations for the years ended December 31, 2022
and 2023 were reported as loss from discontinued operations.
The results of discontinued operations of REIT
Holdings for the years ended December 31, 2024, 2023 and 2022 are as follows:
| | |
For the Year Ended December 31, | |
| | |
2024 | | |
2023 | | |
2022 | |
| Revenues | |
$ | 2,429,726 | | |
$ | 3,225,505 | | |
$ | 6,269,178 | |
| Cost of revenues | |
| 1,249,372 | | |
| 3,016,974 | | |
| 5,463,660 | |
| Gross profit | |
| 1,180,354 | | |
| 208,531 | | |
| 805,518 | |
| Operating expenses | |
| 897,658 | | |
| 5,070,857 | | |
| 10,186,565 | |
| Gain (loss) from discontinued operations | |
| 282,696 | | |
| (4,862,326 | ) | |
| (9,381,047 | ) |
| Other income (loss), net | |
| (373,467 | ) | |
| (4,697,061 | ) | |
| 454,782 | |
| Loss before tax | |
| (90,771 | ) | |
| (9,559,387 | ) | |
| (8,926,265 | ) |
| Income tax benefit | |
| (16,424 | ) | |
| (16,639 | ) | |
| (17,562 | ) |
| Net loss from discontinued operations | |
$ | (74,347 | ) | |
$ | (9,542,748 | ) | |
$ | (8,908,703 | ) |
Assets and liabilities of the discontinued operations of REIT Holdings
as of December 31, 2023 were as follows
| | |
As of
December 31, | |
| | |
2023 | |
| Cash | |
$ | 1,261,182 | |
| Accounts receivable, net | |
| 1,062,237 | |
| Accounts receivable - related party | |
| 108,188 | |
| Advance to suppliers, net | |
| 5,291,192 | |
| Advances to suppliers - related party | |
| 1,807,965 | |
| Prepaid expenses and other current assets | |
| 179,714 | |
| Inventories | |
| 136,191 | |
| Current assets of discontinued operations | |
| 9,846,669 | |
| Property and equipment, net | |
| 7,723,749 | |
| Intangible assets, net | |
| 4,449,857 | |
| Long-term investment | |
| 2,337,451 | |
| Right of use assets | |
| 194,478 | |
| Non-current assets of discontinued operations | |
| 14,705,535 | |
| Total assets of discontinued operations | |
$ | 24,552,204 | |
| | |
| | |
| Short term bank loans, net | |
$ | 5,387,400 | |
| Third-party loan | |
| 852,125 | |
| Advances from customers | |
| 1,711,034 | |
| Advances from customers - related party | |
| 344,051 | |
| Deferred grant - current portion | |
| 191 | |
| Accounts payable | |
| 2,939,439 | |
| Taxes payable | |
| 1,732,802 | |
| Accrued liabilities and other payables | |
| 1,848,218 | |
| Deferred tax liabilities | |
| 299,622 | |
| Lease liabilities - current | |
| 89,500 | |
| Current liabilities of discontinued operations | |
| 15,204,382 | |
| Long-term third-party loans | |
| 2,864,488 | |
| Lease liabilities - non-current | |
| 103,830 | |
| Non-current liabilities of discontinued operations | |
| 2,968,318 | |
| Total liabilities of discontinued operations | |
$ | 18,172,700 | |
|