Meiwu Technology(WNW) - 2025 Q2 - Quarterly Report

Financial Performance - Net revenue for the six months ended June 30, 2025, was $2,477,852, a significant increase from $86,159 in the same period of 2024, representing a growth of approximately 2,782%[5] - Gross profit for the same period was $317,723, compared to $44,070 in 2024, indicating a substantial increase in profitability[5] - The net loss for the six months ended June 30, 2025, was $1,361,018, compared to a net loss of $345,611 in 2024, marking an increase in losses of approximately 294%[5] - The company incurred a cash outflow from operating activities of $6,727,940 for the six months ended June 30, 2025, compared to an outflow of $12,853,862 in 2024, indicating an improvement in cash flow management[10] - The loss from operations for the skincare segment was $1,375,342 for the six months ended June 30, 2025, compared to a loss of $728,493 for the same period in 2024[165] - The total segment (loss) profit for the skincare products was $(1,361,018) for the first half of 2025, compared to $(345,611) for the clean food platform in 2024[165] Assets and Liabilities - Cash and cash equivalents decreased to $33,341,081 as of June 30, 2025, down from $43,396,977 at the end of 2024, a decline of about 23%[4] - Total current assets decreased to $44,762,583 as of June 30, 2025, from $60,945,135 at the end of 2024, representing a reduction of approximately 26.5%[4] - Total liabilities decreased to $1,725,006 as of June 30, 2025, from $1,967,772 at the end of 2024, a decrease of about 12.3%[4] - The company's working capital decreased to $43.16 million as of June 30, 2025, from $60.27 million as of December 31, 2024[45] - As of June 30, 2025, accounts receivable net amounted to $684,139, an increase from nil as of December 31, 2024[118] - Advances to suppliers net decreased to $9,643,135 as of June 30, 2025, down from $16,546,521 as of December 31, 2024[119] Shareholder Equity and Capital Structure - The weighted average shares outstanding for the basic and diluted loss per share increased to 33,431,259 in 2025 from 3,152,212 in 2024, reflecting a substantial increase in share count due to share consolidation[5] - The Company completed a share consolidation on November 27, 2023, consolidating every 35 shares into 1 share[145] - The Company also approved a share consolidation on March 5, 2025, consolidating every 20 shares into 1 share[146] - As of June 30, 2025, the Company had 3,168,133 Ordinary Shares issued and outstanding, compared to 63,361,823 as of December 31, 2024[144] Acquisitions and Subsidiaries - On March 31, 2022, the company agreed to acquire Dalian Yundian Zhiteng Technology Company Limited for a total consideration of $8.1 million, to be paid in ordinary shares[28] - The company established a new subsidiary, Shenzhen Jiayuan Liquor Sales Co., Ltd, with a registered capital of RMB 1.8 million (approximately $252,180) on May 4, 2023[33] - On December 12, 2022, the company entered into a Stock Purchase Agreement to acquire Hunan Yuanxing Chanrong Technology Co., Ltd for $9.6 million, to be paid in ordinary shares[32] - The Company agreed to acquire 100% of Yundian BVI for a total consideration of US$8.1 million, paid in 9,000,000 Ordinary Shares at US$0.9 per share[137] - The Company entered into an SPA to acquire Mahao BVI for US$6 million, issuing 10,000,000 Ordinary Shares at US$0.6 per share[138] - The acquisition of Yuanxing BVI was completed for US$9.6 million, with 12,000,000 Ordinary Shares issued at US$0.8 per share[141] Revenue Recognition and Taxation - The Company recognizes revenue from sales of functional skincare and health products on a gross basis, fulfilling the promise to provide desired products to customers[80] - Revenue is recognized in accordance with ASC 606, with fixed price contracts and a single performance obligation, recognizing revenue upon customer acceptance of goods at delivery[81] - The VAT rate applicable to product sales and services revenues was reduced to 1% as of June 30, 2025[96] - The effective tax rate for the six months ended June 30, 2025, was 0%, compared to 52% for the same period in 2024[160] - The Company has a full valuation allowance against deferred tax assets, with net deferred tax assets of $0 as of June 30, 2025[163] Operational Highlights - The company has a strategic transition to expand into the sales of functional skincare products as disclosed on September 3, 2024[35] - Offline sales commenced in the second half of 2024, focusing on non-retail customers, including functional skincare and health products[79] - The Company has three operating segments: Clean Food platform, restaurant, and others, as per ASC 280[164] Legal and Subsequent Events - As of June 30, 2025, there were no pending legal proceedings that would materially affect the company's business or cash flows[167] - The company evaluated subsequent events through November 5, 2025, and found no additional reportable events beyond those disclosed[169]