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JIALIJIA GROUP CORPORATION LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. Organization and Business

Jialijia Group Corporation Limited (the “Company”), formerly known as Rizzen, Inc., was incorporated as a corporation under the laws of the State of Nevada on October 21, 2015. The Company was in development stage and was seeking to acquire, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable share transaction or other similar business transactions with one or more operating businesses or assets. 

TheOn July 10, 2019, the Company completed a reverse merger subsequent to July 31, 2019 pursuant toentered into a share purchase/exchange agreement closed(the “Exchange Agreement”) with Huazhongyun Group Co., Limited (“Huazhongyun”), a company incorporated under the laws of Hong Kong, and Na Jin, the sole shareholder of Huazhongyun (the “Shareholder”) and the Chief Executive Officer of the Company. Huazhongyun owns 300,000 shares (the “Company Shares”) of the Company, which represented approximately 82% of the shares of the Company’s common stock, issued and outstanding, at the time of execution of the Exchange Agreement. The Shareholder owns an aggregate of 10,000 ordinary shares of Huazhongyun (“Huazhongyun Shares”), which constitute all of the issued and outstanding shares of Huazhongyun.

Pursuant to the Exchange Agreement, among other matters, the Shareholder will sell and transfer all of the Huazhongyun Shares in exchange for all of the Company Shares. As a result, the Shareholder will directly own the Company Shares, which represent approximately 82% of the issued and outstanding shares of the Company’s common stock at the time of execution of the Exchange Agreement and Huazhongyun will become a wholly-owned subsidiary of the Company.

Jialijia Jixiang Investment (Changzhou) Co., Ltd, (“Jialijia (Changzhou)”) is a company incorporated under the laws of the PRC on June 13, 2017. Huazhongyun owned all of the equity interests in Jialijia Jixiang Investment (Changzhou) Co., Ltd. (“WFOE”), a wholly-foreign owned entity formed under the laws of China. Rucheng Wenchuan Gas Co., Ltd. (“Rucheng Wenchuan”) was incorporated under the laws of the People’s Republic of China (the “PRC”) on March 31, 2006.

On January 7, 2019, Jialijia (Changzhou) entered into an equity transfer agreement (the “Equity Transfer”) with Mr. Jiannan Wu, the shareholder who owned 94.77% of Rucheng Wenchuan’s outstanding shares. Pursuant to the Equity Transfer, Mr. Jiannan Wu agreed to transfer 70% of his ownership of Rucheng Wenchuan to Jialijia (Changzhou), in exchange of RMB 1,000,000 and 143,000 common shares of the Company owned by Huazhongyun. Immediately after the equity transfer agreement, Jialijia (Changzhou) owns 70% of the ownership and becomes the controlling shareholder of Rucheng Wenchuan. Both Huazhongyun and Jialijia (Changzhou) are holding companies and have not carried out substantive business operations of their own. Rucheng Wenchuan is primarily engaged in the production and sale of gases for industrial and medical purposes, such as oxygen and nitrogen, in the PRC.

Pursuant to the Exchange Agreement, on August 29, 2019 (see Note 9).(the “Closing Date”), Na Jin sold and transferred all of the Huazhongyun Shares to the Company in exchange for all of the Company Shares and the Company received all of the outstanding Huazhongyun Shares. As a result, on the Closing Date, Na Jin directly owned Company Shares representing approximately 48% of the issued and outstanding shares of the Company’s common stock, Huazhongyun became a wholly-owned subsidiary of the Company and the Company owned 70% of the outstanding equity interest in Rucheng Wenchuan through Huazhongyun and WFOE.

The acquisition of Huazhongyun and WFOE was treated as a reverse merger (the “Reverse Merger”) for accounting purposes. As a result of the completionconsummation of the reverse merger,Reverse Merger on August 29, 2019, the Company, through its subsidiaries, entered into the business of producing and selling gases for industrial and medical purposes, such as oxygen and nitrogen, in the PRC. The Company has not commenced its gas production or generated any revenues.

Note2. Basis of Presentation

The consolidated balance sheets as of March 31, 2020 and December 31, 2019 and the consolidated statements of operations and comprehensive loss for the three months ended March 31, 2020 and 2019 combine the historical consolidated statements of balance sheets and income and comprehensive loss of the Company, Huazhongyun, Jialijia (Changzhou), and have been prepared as if the Reverse Merger had closed on January 1, 2019. Both the Company, and Huazhongyun and WFOE are under common control.

The consolidated financial information was prepared using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations.

The acquisition of Rucheng Wenchuan by Jialijia (Changzhou) is no longer a development stage company.accounted for under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”) with Jialijia (Changzhou) as the acquiring entity. In business combination transactions in which the consideration given is not in the form of cash (that is, in the form of non-cash assets, liabilities incurred, or equity interests issued), measurement of the acquisition consideration is based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable.

Under ASC 805, all of the Rucheng Wenchuan assets acquired and liabilities assumed in this business combination are recognized at their acquisition-date fair value. The excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.

These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on April 26, 2021.

Note3. Purchase Price

In connection with the acquisition of Rucheng Wenchuan, Jialijia (Changzhou) entered into an equity transfer agreement (the “Equity Transfer”) with Mr. Jiannan Wu, the shareholder who owned 94.77% of Rucheng Wenchuan’s outstanding shares on January 7, 2019. Pursuant to the Equity Transfer, Mr. Jiannan Wu agreed to transfer 70% of his ownership of Rucheng Wenchuan to Jialijia (Changzhou), in exchange of RMB 1,000,000, approximately $145,983, and 143,000 common shares of the Company owned by Huazhongyun. Immediately after the equity transfer agreement, Jialijia (Changzhou) owns 70% of the ownership and becomes the controlling shareholder of Rucheng Wenchuan.

Goodwill as a result of the acquisition of Rucheng Wenchuan is calculated as follows:

During the three months ended March 31, 2019, the Company has recorded goodwill impairment in full amount.

Note 2.4. Going Concern

The Company’sThese consolidated financial statements arehave been prepared using generally accepted accounting principles in the United States of America applicable toon a going concern basis, which contemplates the realization of assets and the satisfactionsettlement of liabilities and commitments in the normal course of business. TheAs reflected in the Company’s accompanying consolidated financial statements, for the three months ended March 31, 2020, the Company has incurred negative cash flows from operating activities, and continuinghad a net lossesloss of $13,119. Additionally, the Company had an accumulated deficit of $4,818,505 and working capital deficitsdeficit of $3,046,373 as of March 31, 2020, and has not yet generated revenues. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. The Company can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs.

If the Company is unable to successfully commence its business operations in a short period of time, or unable to raise additional capital or secure additional lending, the Company may need to curtail or cease its operations. The Company believes that these matters raise substantial doubt about itsthe Company’s ability to continue as a going concern. The Company’saccompanying financial statements do not reflectinclude any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might result frombe necessary should the outcome of this uncertainty.Company be unable to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’sManagement plans to obtain such resources for the Company include obtaining capital from the sale of its equity, securities, and loansshort-term and long-term borrowings from banks, stockholders or other related party(ies) when needed. The Company believes its current and future plans enable it to continue as a going concern. Management. However, management cannot provide any assurance that the Company will be successful in accomplishing theseany of its plans. These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts which may differ from those in the accompanying financial statements.

Note 3.5. Summary of Significant Accounting Policies

The management of the Company is responsible for the selection and use of appropriate accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

Basis of PresentationAccounting

The Company maintains its general ledger and journals with the accrual method of accounting for financial reporting purposes. The accompanying financial statements have beenand accompanying notes are prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) and in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Principles of consolidation

The consolidated financial statements include the financial statements of Jialijia Group Corporation Limited, Huazhongyun Group Co., Limited, Jialijia Jixiang Investment (Changzhou) Co., Ltd and its 70% owned subsidiary, Rucheng Wenchuan Gas Co., Ltd. All inter-company transactions and balances are eliminated in consolidation.

Use of estimatesEstimates

The preparation of the financial statements in conformity with U.S. GAAPaccounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amountsamount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; howevermade. However, actual results could differ materially from those estimates. results.

Cash and Cash Equivalents

The Company considers all cash on hand and in banks, certificates of deposit with banks and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. There is no insurance securing these deposits in the PRC. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Advances to Suppliers

The Company advances funds to certain suppliers for the purchase of machinery and equipment. Based on management’s evaluation, the Company has reserved allowance for advances to suppliers in the amount of $100,549 as of December 31, 2019 and write off the balance in full amount as of March 31, 2020.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation. Gains or losses on disposals are reflected as gain or loss in the period of disposal. All ordinary repair and maintenance costs are expensed as incurred.

Depreciation for financial reporting purposes is provided using the straight-line method over the estimated useful lives of the assets: 

Costs incurred in constructing new facilities, including progress payments and other costs related to construction, are capitalized and transferred to property, plant and equipment on completion, at which time depreciation commences.

Impairment of Long-lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows as the rate the Company utilizes to evaluate potential investments. The Company estimates fair value based on the information available, judgments and projections are considered necessary. No impairment loss was recorded for the three months ended March 31, 2020 and 2019, respectively.

Impairment of Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations under the purchase method of accounting. Goodwill is assessed for impairment annually or if an event occurs or circumstances change that would indicate the carrying amount may be impaired. The impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. During the three months ended March 31, 2019, the goodwill, in amount of $3,962,424, as a result of the acquisition of Rucheng Wenchuan (see Note 3), was fully recognized as impairment.

Income Taxes

The Company accounts for income taxes as outlinedusing an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in ASC 740, “Income Taxes”.future years. Under the asset and liability methodapproach, deferred taxes are provided for the net tax effects of ASC 740,temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets and liabilities areif it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

Under ASC 740, a tax position is recognized foras a benefit only if it is “more likely than not” that the estimated future tax consequences attributableposition would be sustained in a tax examination, with a tax examination being presumed to differences betweenoccur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statement carrying amountsstatements. A tax position is measured at the largest amount of existing assetsbenefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and liabilities and their respectiveinterest incurred related to underpayment of income tax bases. Deferredare classified as income tax assets and liabilities are measured using enacted tax ratesexpense in effect for the year in which those temporary differences are expected to be recovered or settled.incurred.

Loss per Share CalculationForeign Currency Translation

The Company complies with accountinguses the United States dollar (“U.S. dollars”) for financial reporting purposes. The functional currency of the Company and disclosure requirementsits subsidiaries is the Chinese Yuan or Renminbi (“RMB”). The Company’s subsidiaries maintain their books and records in their functional currency, being the primary currency of FASB ASC 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period.economic environment in which their operations are conducted. For the six months ended July 31, 2019Company and 2018,its subsidiaries whose functional currencies are other than the Company did not have any dilutive securitiesU.S. dollar, all asset and other contracts that could, potentially, be exercised or converted into common stockliability accounts were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at the historical rates and then shareitems in the earningsincome statement and cash flow statements are translated at the average rate in each applicable period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of shareholders’ equity. The resulting translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the Company. As a result, diluted loss per common share isfunctional currency are included in the sameresults of operations as basic loss per common share for the period.incurred.

Fair Values of Financial Instruments

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 – quoted prices in active markets for identical assets or liabilities.

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

ThereThe Company’s financial instruments primarily consist of cash and cash equivalents, other receivables, advances to suppliers, accrued expenses, other payables, and related party borrowings. As of the balance sheet dates, the estimated fair values of the financial instruments were no assets or liabilities measured at fair valuenot materially different from their carrying values as presented on a recurring basis subjectthe balance sheets. This is attributed to the disclosure requirementsshort maturities of ASC 820 asthe instruments and that interest rates on the borrowings approximate those that would have been available for loans of July 31, 2019similar remaining maturity and January 31, 2019.risk profile at respective balance sheet dates.

Recent Accounting Pronouncements

In August 2018,Management has considered all recent accounting pronouncements issued and their potential effect on the FASB issued Accounting Standards Update (ASU) 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement”, which changes the fair value measurement disclosure requirements of ASC 820. This update is effective for fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years.consolidated financial statements. The Company doesCompany’s management believes that these recent pronouncements will not expect the adoption of ASU 2018-13 to have a material impacteffect on its consolidated financial statements.

Note 4. Prepaid Expenses

As of July 31, 2019 and January 31, 2019, the Company had $4,000 and $10,000 in prepaid expenses, respectively, which consisted of prepaid professional service charges.

Note 5. Accrued Liabilities

As of July 31, 2019 and January 31, 2019 the Company had $10,825 and $0 in accrued liabilities, respectively, which consisted of accrued professional service charges.

Note 6. Property, Plant, and Equipment, Net

Property, plant, and equipment consisted of the following:

Depreciation expense for the three months ended March 31, 2020 and 2019 were $0 and $38,517, respectively.

Note 7. Accrued Expenses

Accrued expenses consist of the following:

Note 8. Income Tax

United States

The Company accountswas incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made, as there was no taxable income from U.S. operations for the three months ended March 31, 2020 and 2019. The U.S. Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. Effective in accordance with FASB Codification Topic 740-10-25, Accounting for Uncertainty in Income Taxes, which requires the use of an asset and liability approach in accounting for income taxes.  Under this approach, deferred tax assets and liabilities are measured based on differences between financial reporting and tax bases of assets and liabilities measured using enacted tax rates and laws that are expected to be in effect when differences are expected to reverse.

As of JulyDecember 31, 2019, the Tax Act reduces the U.S. statutory tax rate from 35% to 21%.

PRC

Effective on January 1, 2008, the PRC Enterprise Income Tax Law, EIT Law, and Implementing Rules impose an unified enterprise income tax rate of 25% on all domestic-invested enterprises and foreign investment enterprises in PRC, unless they qualify under certain limited exceptions. As such, starting from January 1, 2008, the Company’s subsidiaries in PRC are subject to an enterprise income tax rate of 25%. The Company had recorded no income tax provisions for the three months ended March 31, 2020 and 2019.

Provision for income tax expense (benefit) consists of the following:

The following is a net operating loss carry-forwardreconciliation of $167,028 and a deferred tax asset of approximately $35,076 using the statutory tax rate of 21%. to the effective tax rate:

The deferred tax asset may be recognized in future periods, but not exceeding 20 years. However,Company periodically evaluates the Company has provided a full valuation allowance on the deferred tax assets becauselikelihood of the uncertainty regarding its realizability. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or alland adjusts the carrying amount of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future generation of taxable income duringby the periods in which temporary differences representing net future deductible amounts become deductible. After consideration of allvaluation allowance to the information available, Management believesextent that significant uncertainty exists with respect tothe future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and has therefore establishedother relevant factors.

As of March 31, 2020 and December 31, 2019, based on the weight of available evidence, including cumulative losses in recent years and expectations of future taxable income, the Company determined that it was more likely than not that its deferred tax assets would not be realized and have a full100% valuation allowance.allowance associated with its deferred tax assets.

Note 9. Related Party Transactions and Balances

The significant componentrelated parties of deferred income tax assetsthe company with whom transactions are reported in these consolidated financial statements are as of July 31, 2019 and January 31, 2019 is as follows:

The difference between the effective rate reflected in the provision for income taxes on loss before taxes and the amounts determined by applying the applicable statutory U.S. tax rate are analyzed below: 

Note 7. Related Party TransactionsDue to related parties:

In support of

Due to related parties were advances from its related parties for the Company’s nominal operationpurchase of equipment and cash requirements, the Company relies on advances from related parties until when the Company can support its operations or attain adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers, directors, or shareholders. The advances from related party represent the amounts paid by related party on behalf of the Company in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.

During the six months ended July 31, 2019, the Company’s officer advanced $44,388 fordaily operating expenses. The balances of the loan from related party as of July 31, 2019 and January 31, 2019 were $128,503 and $84,115, respectively. The loan isare unsecured, non-interest bearing, and payable on demand and unsecured. demand.

Note 8.10. Equity

The Company has authorized 1,000,000,000 shares of Common Stock at par value of $0.001.

On May 28, 2020, by unanimous written consent in lieu of a meeting, the Board adopted resolutions authorizing a one (1)-for-twenty (20) reverse stock split and on June 24, 2020 filed Articles of Amendment to effect the reverse stock split with the Secretary of State of the State of Nevada. The reverse stock split becomes effective on June 19, 2020. All share and earnings per share information has been retroactively adjusted to reflect the reverse stock split.

As of JulyMarch 31, 20192020 and JanuaryDecember 31, 2019, the Company had 12,113,591635,296 and 7,285,000635,296 shares of common stock, issued and outstanding, respectively.

On May 15, 2019, the Company issued 817,10840,855 shares of its common stock at a price per share of $0.02$0.4 to nine (9) subscribers. InFrom July 22, 2019 to July 29, 2019, the Company revised the subscription agreements with each of the 9 subscribers, which cancelled 739 shares and issued additional 17,321 shares to changethe 9 subscribers. In addition, the Company revised the issuance price to $0.03$0.6 per share, and cancel 14,785 shares and issue additional 346,416 shares in aggregate. Such additional shares has been issued in August, 2019.share.

In July, 2019, the Company entered into a securities subscription agreement (the “Subscription Agreement”) with each of fifty-four (54) investors (the “Investors”) who purchased an aggregate of 3,011,483150,574 shares of the Company’s common stock at a price of $0.03$0.6 per share. Pursuant to each of the Subscription Agreements, the Company issued its shares of common stock to each Investor in the respective amounts as set forth in the Subscription Agreement.

In addition, on July 24, 2019, Ms. Na Jin, the Chief Executive Officer of the Company, purchased 1,000,00050,000 shares of the Company’s common stock at a price of $0.01$0.2 per share.

As of JulyDuring the year ended December 31, 2019, the Company entered into stock subscription agreements with 26 individuals, pursuant to which the Company agreed to issue an aggregate of 13,035 shares of the Company’s common stock for the purchase price of $0.6 per share. These shares were issued on November 24, 2019 and recorded theas subscriptions receivable resulted fromas of March 31, 2020 and December 31, 2019.

As of March 31, 2020, Huazhongyun owned 300,000 shares of the aforementionedCompany. These shares have been reclassified and recorded as treasury stock at the cost of $0.4 per share, issuances inas a result of the aggregate amount of $124,858.Reverse Merger.

Note 9.11. Subsequent Events

On July 10, 2019, the Company entered into a share purchase/exchange agreement (the “Exchange Agreement”) with Huazhongyun Group Co., Limited (“Huazhongyun”), a company incorporated under the laws of Hong Kong, and Na Jin, the sole shareholder of Huazhongyun (the “Shareholder”) and the Chief Executive Officer of the Company. Huazhongyun owns 6,000,000 shares (the “Company Shares”) of the Company, which represented approximately 82% of the shares of the Company’s common stock, issued and outstanding, at the time of execution of the Exchange Agreement. The Shareholder owns an aggregate of 10,000 ordinary shares of Huazhongyun (“Huazhongyun Shares”), which constitute all of the issued and outstanding shares of Huazhongyun.

Pursuant to the Exchange Agreement, among other matters, the Shareholder will sell and transfer all of the Huazhongyun Shares in exchange for all of the Company Shares. As a result, the Shareholder will directly own the Company Shares, which represent approximately 82% of the issued and outstanding shares of the Company’s common stock at the time of execution of the Exchange Agreement and Huazhongyun will become a wholly-owned subsidiary of the Company.

Jialijia Jixiang Investment (Changzhou) Co., Ltd, (“Jialijia (Changzhou)”) is a company incorporated under the laws of the PRC on June 13, 2017. Huazhongyun owned all of the equity interests inAugust 7, 2020, Jialijia Jixiang Investment (Changzhou) Co., Ltd. (“WFOE”), a wholly-foreign owned entity formed under the laws of China. Rucheng Wenchuan Gaschanged its name to Dajiwanqi Holding (Changzhou) Co., Ltd. (“Rucheng Wenchuan”) was incorporated under the laws of the People’s Republic of China (the “PRC”) on March 31, 2006.

On January 7, 2019, Jialijia (Changzhou)June 30, 2020, the Company entered into an equity transfer agreement (the “Equity Transfer”)stock subscription agreements with Mr. Jiannan Wu,7 individuals, pursuant to which the shareholder who owned 94.77% of Rucheng Wenchuan’s outstanding shares. Pursuant to the Equity Transfer, Mr. Jiannan WuCompany agreed to transfer 70%issue an aggregate of his ownership of Rucheng Wenchuan to Jialijia (Changzhou), in exchange of RMB 1,000,000 and 2,860,000 common shares of the Company owned by Huazhongyun. Immediately after the equity transfer agreement, Jialijia (Changzhou) owns 70% of the ownership and becomes the controlling shareholder of Rucheng Wenchuan. Both Huazhongyun and Jialijia (Changzhou) are holding companies and have not carried out substantive business operations of their own. Rucheng Wenchuan is primarily engaged in the production and sale of gases for industrial and medical purposes, such as oxygen and nitrogen, in the PRC.

Pursuant to the Exchange Agreement, on August 29, 2019 (the “Closing Date”), Na Jin sold and transferred all of the Huazhongyun Shares to the Company in exchange for all of the Company Shares and the Company received all of the outstanding Huazhongyun Shares. As a result, on the Closing Date, Na Jin directly owned Company Shares representing approximately 48% of the issued and outstanding12,410 shares of the Company’s common stock Huazhongyun became a wholly-owned subsidiaryfor the purchase price of the Company and the Company owned 70% of the outstanding equity interest in Rucheng Wenchuan through Huazhongyun and WFOE.

As a result of the consummation of the above merger$0.6 per share. These shares were issued on August 29, 2019, the Company, through its subsidiaries, is engaged in the production and sale of gases for industrial and medical purposes, such as oxygen and nitrogen, in the PRC. The Company’s operating subsidiary, Rucheng Wenchuan, is in the process of improving its facilities and has not commenced its gas production or generated any revenues.June 30, 2020.

The Company has evaluated subsequent events through the date which the consolidated financial statements were available to be issued. All subsequent events requiring recognition as of JulyMarch 31, 20192020 have been incorporated into these consolidated financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are currently a “shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating company.

Our principal business is to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. Based on proposed business activities, we are a “blank check” company. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements. 

We are in active discussions with an operating business affiliated with our executive officers regarding potential acquisition. There is no assurance that we will be able to successfully acquire such company or any company in the near future.

Jialijia Group Corporation Limited, formerly known as Rizzen, Inc. (the “Company”) was incorporated as a corporation under the laws of the State of Nevada on October 21, 20152015. On May 16, 2018, our Articles of Incorporation were amended to change our name to Jialijia Group Corporation Limited and has been inactive since our change in control on December 30, 2016. Following our change,increase the Company now has only minimal assets and liabilities. Its operations are focused on seekingnumber of authorized shares the corporation from 75,000,000 to acquire an operating business with strong growth potential. From and after the change of control, unless and until the Company completes an acquisition, its expenses are expected to consist solely of legal, accounting and compliance costs, including those related to complying with reporting obligations under the Exchange Act.1,000,000,000.

InEffective as of December 15, 2018, the Company identified, negotiated,appointed: (i) Mr. Dongzhi Zhang as the Chairman of the Board; (ii) Mr. Jiannan Wu as the Company’s General Manager and reached two business acquisition agreements with two target companies (see “Material Agreements” below). Our principal business objective forDirector; and (iii) Ms. Weixia Hu as the past 12 months,Company’s Chinese Region Chief Representative. Ms. Na Jin is our CEO, CFO, Secretary and beyond such time, have been and will be to achieve long-term growth potential through acquisitions of these operating businesses.a director. 

On July 10, 2019, the Company entered into a share purchase/exchange agreement (the “Share Exchange Agreement”) with Huazhongyun Group Co., Limited (“Huazhongyun,” formerly known as “JLJ Group Corporation Limited”), a company formed under the laws of the Hong Kong Special Administrative Region, and Na Jin, the sole shareholder of Huazhongyun and the Chief Executive Officer and Chief Financial Officer of the Company. Na Jin, through Huazhongyun, owned 6,000,000 shares (the “Company Shares”) of the Company, which represented approximately 82% of the shares of the Company’s common stock, issued and outstanding, par value $0.001 per share, as of the date of execution of the Share Exchange Agreement. Na Jin owned an aggregate of 10,000 ordinary shares of Huazhongyun (“Huazhongyun Shares”), which constituted all of the issued and outstanding ordinary shares of Huazhongyun. On the date of execution of the Share Exchange Agreement, Huazhongyun owned all of the equity interests in Jialijia Jixiang Investment (Changzhou) Co., Ltd. (“WFOE”), a wholly-foreign owned entity formed under the laws of China, which in turn held seventy percent (70%) of the outstanding equity interest in Rucheng Wenchuan Gas Co., Ltd. (the “Target” or “Target Company”“Rucheng Wenchuan”), a company formed under the laws of China.

Pursuant to the Share Exchange Agreement, on August 29, 2019 (the “Closing Date”), Na Jin sold and transferred all of the Huazhongyun Shares to the Company in exchange for all of the Company Shares and the Company received all of the outstanding Huazhongyun Shares. As a result, on the Closing Date, Na Jin directly owned Company Shares representing approximately 48% of the issued and outstanding shares of the Company’s common stock, Huazhongyun became a wholly-owned subsidiary of the Company, and the Company owned 70% of the outstanding equity interest in the Target CompanyRucheng Wenchuan through Huazhongyun and WFOE. The financial statements contained herein do not reflect the reverse merger that was consummated after the period ended July 31, 2019.

From July 22, 2019 to July 29, 2019, the Company entered into a securities subscription agreement (the “Subscription Agreement”) with fifty-four (54) investors (the “Investors”) who reside outside the United States where the Investors purchased an aggregate of 3,011,483 shares of the Company’s common stock, par value $0.001 per share, at a price of $0.03 per share. Pursuant to each of the Subscription Agreements, the Company issued its shares of common stock to each Investor in the respective amounts as set forth in the Subscription Agreement and received the funds in the corresponding amounts as set forth therein. In addition, on April 20, 2019, Ms. Na Jin, the Chief Executive Officer of the Company, entered into a Subscription Agreement to purchase 1,000,000 shares of the Company’s common stock at a price of $0.01 per share, and on July 24, 2019, wired thefor a total purchase price of $10,000, to the Company.which purchase was consummated on July 24, 2019.

As a result of the consummation of the above merger on August 29, 2019, we entered into the business of producing and selling gases, such as oxygen and nitrogen, for industrial and medical purposes in the PRC. In 2020, the COVID-19 pandemic materially and adversely affected economic conditions and our operating results. As a result, we were unable to obtain the financing necessary to pursue this business.