v3.26.1
Discontinued Operations and Deconsolidation
 12 Months Ended
Dec. 31, 2025
Discontinued Operations and Deconsolidation [Abstract]  
DISCONTINUED OPERATIONS AND DECONSOLIDATION

NOTE 3 — DISCONTINUED OPERATIONS AND DECONSOLIDATION

 

In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major impact on an entity’s operations and financial results when the components of an entity meets the criteria in ASC paragraph 205-20-45-10. In the period in which the component meets the held for sale or discontinued operations criteria the major assets, other assets, current liabilities and non-current liabilities shall be reported as a component of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the income (loss) of continuing operations.

 

Disposition of a Subsidiary:

 

On December 22, 2025, the Company and Hua Chen Intelligent Technology Co., Limited, a company formed under the laws of Hong Kong and a subsidiary of the Company (the “Target”) entered into a share purchase agreement (the “Agreement”) with an unrelated third party, Chen Yi San (the “Buyer”). Pursuant to the Agreement, the Company agreed to sell and the Buyer agreed to purchase all the issued and outstanding shares of the Target at a purchase price of $50,000, which sale includes the sale of the Target’s subsidiaries, including Huachen AI Technology (Zhejiang) Co., Ltd., Zhejiang Huachen Technology Co., Ltd., Shanghai Tiandidaochuan Parking Equipment Manufacturing Co., Ltd., Zhejiang Tiandidaochuan Parking Equipment Co., Ltd., Shanghai Tiandiricheng Parking Lots Management Co., Ltd., Shanghai Yufeng Information Technology Co., Ltd., Shanghai Tiandi Puji Parking Management Co., Ltd. Shanghai Tiandidaochuan Parking Equipment Installation Co., Ltd., and Zhejiang Xinfeng Trade Co., Ltd. Except as a party to the Agreement, the Buyer has no current or prior relationship with the Company and has no family relationship with any of the Company’s directors or officers.

 

The subsidiary comprises our market development and clinical-related business operating segment. As a result of the planned disposition of the subsidiary, the market development and clinical-related business operating segment meets the held for sale criteria of ASC 205-20. Accordingly, the historical results of operations of the market development and clinical-related business operating segment has been reflected as discontinued operations in our consolidated financial statement for all periods prior to the Agreement on December 22, 2025.

 

As a result of the sale of the subsidiary completed during the period ended December 31, 2025, the Company deconsolidated the subsidiary as of December 31, 2025. Therefore, the Company reported no assets or liabilities of the subsidiary as of December 31, 2025 and recognized a net loss on deconsolidation of $22,119,583, which has been reflected as a component of other (expense) income on the accompanying consolidated statements of operations and comprehensive income (loss).

 

Summary Reconciliation of Discontinued Operations

 

The following tables present the balance sheets and the results of operations of the Company classified as discontinued operations for the periods presented:

   As of
December 31,
2025		   As of
December 31,
2024		 
   US$   US$ 
ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents  $
        -
   $28,145 
Accounts receivable, net   
-
    19,498,525 
Other receivables - related parties   
-
    1,204,797 
Other receivables, net   
-
    3,857,418 
Prepayments   
-
    8,650,189 
Inventories, net   
-
    1,427,716 
TOTAL CURRENT ASSETS   
-
    34,666,790 
           
Plant and equipment, net   
-
    8,904,131 
Right-of-use asset, net   
-
    13,826 
Deferred tax assets   
-
    187,392 
Land-use rights, net   
-
    2,068,275 
Intangible assets, net   
-
    11,849 
TOTAL NON-CURRENT ASSETS   
-
    11,185,473 
TOTAL ASSETS  $
-
   $45,852,263 
           
CURRENT LIABILITIES:          
Short-term bank loans  $
-
   $8,624,210 
Accounts payable   
-
    2,680,301 
Accrued liabilities and other payables   
-
    929,387 
Deposit received   
-
    29,275 
Taxes payable   
-
    842,332 
Other payables - related parties   
-
    101,380 
Lease liability   
-
    14,770 
TOTAL CURRENT LIABILITIES   
-
    13,221,655 
           
Long-term bank loan   
-
    2,920,942 
Long-term account payable   
-
    1,654,129 
TOTAL NON-CURRENT LIABILITIES   
-
    4,575,071 
TOTAL LIABILITIES   
-
    17,796,726 
           
SHAREHOLDERS’ EQUITY          
Additional paid-in capital   
-
    3,862,919 
Retained earnings   
-
    16,952,112 
Accumulated other comprehensive loss   
-
    (4,792,129)
TOTAL HUACHEN CAYMAN SHAREHOLDERS’ EQUITY   
-
    16,022,902 
Non-controlling interest   
-
    12,032,635 
TOTAL SHAREHOLDERS’ EQUITY   
-
    28,055,537 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $
-
   $45,852,263 
   For the Years Ended
December 31,		 
   2025   2024   2023 
REVENUE            
Revenue  $8,319,958   $40,944,770    34,279,022 
                
Total revenue   8,319,958    40,944,770    34,279,022 
                
COST OF REVENUE AND RELATED TAX   5,606,134    35,226,302    28,072,748 
                
GROSS PROFIT   2,713,824    5,718,468    6,206,274 
                
OPERATING EXPENSES               
Selling and marketing expenses   489    172,677    159,303 
General and administrative expenses   1,278,226    2,830,090    2,991,355 
 Research and development expenses   43,860    378,793    457,523 
Total operating expenses   1,322,575    3,381,560    3,608,181 
                
INCOME FROM OPERATIONS   1,391,249    2,336,908    2,598,093 
                
OTHER INCOME (EXPENSE)               
                
Interest expense, net   (22,494)   (608,851)   (815,657)
Other income, net   56,376    183,866    234,884 
Total other income(expense), net   33,882    (424,985)   (580,773)
INCOME BEFORE INCOME TAX PROVISION   1,425,131    1,911,923    2,017,320 
                
INCOME TAXE EXPENSE   6    322,414    1,220 
                
INCOME FROM DISCONTINUED OPERATIONS   1,425,125    1,589,509    2,016,100 
                
Net income attributable to the noncontrolling interest   331,626    15,880    195,140 
                
Net income attributable to common shareholders   1,093,499    1,573,629    1,820,960 
OTHER COMPREHENSIVE INCOME               
Foreign currency translation loss   (4,792,129)   (395,067)   (1,770,360)
Other comprehensive loss, net of tax   (4,792,129)   (395,067)   (1,770,360)
TOTAL COMPREHENSIVE (LOSS) INCOME FROM DISCONTINUED OPERATIONS   (3,367,004)  $1,194,442    245,740