Organization

12 Months Ended

Dec. 31, 2023

Organization [Abstract]

ORGANIZATION

1. ORGANIZATION

(a) Nature of operations

Hongchang International Co., Ltd (the “Company”) was incorporated in the state of Nevada on May 18, 1987. The Company is a holding company. The immediate and ultimate holding company of the Company is Zengqiang Investment Limited, a business company incorporated in the BVI which owns 70.0% of its common stocks, and Hong Jin Investment Limited, a business company incorporated in the BVI which owns 30.0% of its common stocks.

On September 4, 2023, Heyu Biological Technology Corporation (“HYBT”), the Company’s predecessor, completed the merger and other related transactions (the “Merger Transactions”) with Hongchang Global Investment Holdings Limited (“Hongchang BVI”), as a result of which Hongchang BVI became a wholly-owned subsidiary of HYBT and HYBT assumed and began conducting the principal business of Hongchang BVI. The name of the Company was changed from “Heyu Biological Technology Corporation” to “Hongchang International Co., Ltd.” (HCIL).

The “Group” means (i) prior to the completion of the Reorganization, Hongchang BVI and its subsidiaries that engage in businesses of food trade and biotechnology in China (ii) upon and after completion of the Merger Transactions, the Company and its subsidiaries that engage in businesses of food trade and biotechnology in China.

(b) History and reorganization of the Group

In preparation of the Merger Transactions, the following transactions were undertaken to reorganize the legal structure of Operating Entity (“Reorganization”). On January 13, 2023, Mr. Zengqiang Lin and Ms. Zhenzhu Lin, the existing stockholders of Fuqing Hongchang Food Co., Ltd (“Hongchang Food”) established two wholly-owned subsidiaries (“BVI-1” and “BVI-2”) in British Virgin Island, respectively. On January 18, 2023, Hong Chang Global Investment Holdings Limited (“Hongchang BVI”) was then incorporated by BVI-1 and BVI-2 which held 70% and 30% equity interest of Hongchang BVI, respectively. On February 6, 2023, Hongchang BVI incorporated a wholly-owned subsidiary, Hong Chang Biotechnologies (HK) Limited (“Hongchang HK”). On February 28, 2023, Hongchang HK incorporated a wholly-owned subsidiary, Fujian Hongjin Biotechnology Co., Ltd. (“WFOE”) in the People’s Republic of China (“PRC”). WFOE then purchased the total equity interest of Hongchang Food. After the Reorganization, Mr. Zengqiang Lin and Ms. Zhenzhu Lin hold 70% and 30% equity interest of Hongchang Food through WFOE, respectively. As all the entities involved in the process of the Reorganization are under common ownership of Hongchang Food’s stockholders before and after the Reorganization, the Reorganization is 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 accompanying consolidated financial statements were prepared as if the corporate structure of the Group had been in existence since the beginning of the periods presented.

(c) Reverse merger

On August 21, 2023, HYBT entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Hongchang BVI and Hongchang BVI’s stockholders, Zengqiang Investment Limited, a business company incorporated in the BVI, and Hong Jin Investment Limited, a business company incorporated in the BVI (the “Selling Stockholders” and each a “Selling Stockholder”), in relation to the acquisition of Hongchang BVI by HYBT (the “Hongchang Acquisition”). Zengqiang Investment Limited is wholly-owned by Mr. Zengqiang Lin and Hong Jin Investment Limited is wholly-owned by Ms. Zhenzhu Lin. Mr. Zengqiang Lin has been a director of HYBT 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 HYBT in exchange for an aggregate of 415,582,375 new shares of HYBT’s common stock (the “Consideration Shares”), of which 353,322,843 shares were issued to Zengqiang Investment Limited and 62,259,532 shares were issued to Hong Jin Investment Limited.

Immediately following the closing of the Hongchang Acquisition, HYBT had a total of 518,831,367 issued and outstanding shares of common stock. The 415,582,375 Consideration Shares constitute 80.1% of its enlarged share capital following the closing of the Hongchang Acquisition. The exchange consideration for the Hongchang Acquisition was determined on an arms’ length basis based on our valuation of Hongchang BVI and its subsidiaries and its assets.

As HYBT, the legal acquirer and accounting acquiree, does not meet the definition of a business, management concluded that the Merger should be accounted for as a continuation of the financial statements of Hongchang BVI (the legal subsidiary), together with a deemed issue of shares and a re-capitalization of the equity of Hongchang BVI. Hongchang BVI is the continuing entity and is deemed to have issued shares in exchange for the identifiable net assets held by HYBT together with the listing status of HYBT. Management concluded that September 4, 2023 is the acquisition date of the Merger.

Upon the reverse merge, the Company has set up a few new subsidiaries：Fujian Hongchang Global Food Co., Ltd (“Hongchang Global Food”), Fujian Hongchang Global Import & Export Co., Ltd (“Hongchang Import & Export”), and Fujian Hongchang Global Supply Chain Co., Ltd (“Hongchang Supply Chain”), in order for the company to develop different businesses. As date of this report, these subsidiaries have not generated significant revenue.

Based on above transactions, the accompanying consolidated financial statements reflect the activities of each of the following entities:

Entity	Place of incorporation	Percentage of direct or indirect ownership by the Company	Principal activities
Subsidiaries:
Hong Chang Global Investment Holdings Limited (Hongchang BVI)	British Virgin Island	100%	Investment holding
Hong Chang Biotechnologies (HK) Limited (Hongchang HK)	Hong Kong	100%	Investment holding
Fujian Hongjin Biotechnology Co., Ltd.(WFOE)	PRC	100%	Provision of technical and consultation services
Fuqing Hongchang Food Co., Ltd(Hongchang Food)	PRC	100%	Provision of food trade and biotechnology
Fujian Hongchang Global Food Co., Ltd (“Hongchang Global Food”)	PRC	100%	Provision of food trade and biotechnology
Fujian Hongchang Global Import & Export Co., Ltd(“Hongchang Import&Export”)	PRC	100%	Provision of food trade and biotechnology
Fujian Hongchang Global Supply Chain Co., Ltd(“Hongchang Supply Chain”)	PRC	100%	Provision of food trade and biotechnology