Company: QSJC
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0001683168-25-001892
Chunk: 223

Company: TANCHENG GROUP CO., LTD.
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1C
Chunk 223
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 parties.

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    In 2024, management has strategically focused on selling high-margin product, resulting in improved gross profit and operating cash flows. Management anticipates that this trend will continue to enhance overall profitability, positively impacting the Company’s financial health by generating sustainable operating cash flows and supporting future growth.

The board of directors believes the Company has
adequate financial resources to continue in operational existence for the foreseeable future, a period of at least 12 months from the
date of this report. Accordingly, the going concern basis of accounting continues to be used in the preparation of the consolidated financial
statements for the year ended December 31, 2024.

(b) Economic and Political Risks

The Company’s operations are conducted in
the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political,
economic and legal environment in the PRC, and by the general state of the PRC economy.

The Company’s operations in the PRC are
subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These
include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s
results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in government policies
with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

(c) Use of Estimates

The preparation of financial statements in conformity
with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related
disclosures of contingent liabilities at the balance sheet date, and revenue and expenses in the financial statements and accompanying
notes. Significant accounting estimates reflected in the Company’s consolidated financial statements include economic lives and
impairment of property, plant and equipment and allowance for doubtful accounts. Actual results could differ from those estimates and
such differences could affect the results of operations reported in future periods.

(d) Cash and Cash Equivalents

The Company considers all highly liquid investments
purchased with original maturities of three months or less to be cash equivalents. All cash and cash equivalents relate to cash on hand
and cash at bank deposited in bank accounts in mainland China at December 31, 2024 and 2023. Cash balance in bank accounts in mainland
China are insured by the People’s Bank of China Financial Stability Department (“FSD”) where there