EXHIBIT 99.1
Xianning Bozhuang Tea Products Co., Ltd.
Audited Financial Statements
December 31, 2018 and 2017
Contents | Page | |||
Report of Independent Registered Public Accounting Firm | 2 | |||
Balance Sheets | 3 | |||
Statements of Operations and Comprehensive Loss | 4 | |||
Statements of Stockholders’ Equity | 5 | |||
Statements of Cash Flows | 6 | |||
Notes to Financial Statements | 7 - 13 |
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To: | The Board of Directors and Stockholders of |
Xianning Bozhuang Tea Products Co., Ltd. |
Report of Independent Registered Public Accounting Firm
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Xianning Bozhuang Tea Products Co., Ltd. (the “Company”) as of December 31, 2018 and 2017, and the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2018, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company had incurred substantial losses during the year, and has a working capital deficit, which raises substantial doubt about its ability to continue as a going concern. Management’s plan in regards to these matters are described in Note 3. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ WWC, P.C.
Certified Public Accountants
San Mateo, California
July 24, 2019
We have served as the Company’s auditor since 2019.
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Xianning Bozhuang Tea Products Co., Ltd.
Balance Sheets
As of December 31, 2018 and 2017
2018 | 2017 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 34,446 | $ | 6,401 | ||||
Accounts receivable | 37,375 | 80,252 | ||||||
Other receivables | 623,812 | 316,123 | ||||||
Inventory | 1,259,496 | 1,436,297 | ||||||
Advances and prepayments to suppliers | 282,834 | 77,918 | ||||||
Total current assets | 2,237,963 | 1,916,991 | ||||||
Non-current assets | ||||||||
Property, plant and equipment, net | 1,307,499 | 1,446,986 | ||||||
Construction in progress, net | 1,316,078 | 1,368,805 | ||||||
Intangible assets | 37,277 | 44,610 | ||||||
Total Non-Current Assets | 2,660,854 | 2,860,401 | ||||||
Total Assets | $ | 4,898,817 | $ | 4,777,392 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities | ||||||||
Short term bank loans | 1,539,752 | 1,498,455 | ||||||
Accounts payable | 256,756 | 299,281 | ||||||
Taxes payable | 24,930 | 16,306 | ||||||
Accrued liabilities and other payables | 1,545,957 | 917,144 | ||||||
Customer deposits | 33,448 | 87,126 | ||||||
Total current liabilities | 3,400,843 | 2,818,312 | ||||||
Total Liabilities | 3,400,843 | 2,818,312 | ||||||
Commitments and Contingencies | ||||||||
Stockholders’ Equity | ||||||||
Paid in capital | 2,029,771 | 2,029,771 | ||||||
Accumulated deficit | (400,135 | ) | (24,548 | ) | ||||
Accumulated other comprehensive loss | (131,662 | ) | (46,143 | ) | ||||
Total Equity | 1,497,974 | 1,959,080 | ||||||
Total Liabilities and Equity | $ | 4,898,817 | $ | 4,777,392 |
See Accompanying Notes to the Financial Statements
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Xianning Bozhuang Tea Products Co., Ltd.
Statements of Operations and Comprehensive Loss
For the years ended December 31, 2018 and 2017
2018 | 2017 | |||||||
Net revenues | $ | 41,151 | $ | 114,946 | ||||
Cost of revenues | 49,828 | 110,118 | ||||||
Gross (loss) profit | (8,677 | ) | 4,828 | |||||
Operating expenses: | ||||||||
Selling and marketing expenses | 20,975 | 80,950 | ||||||
General and administrative expenses | 392,942 | 526,672 | ||||||
Total operating expenses | 413,917 | 607,622 | ||||||
Operating loss | (422,594 | ) | (602,794 | ) | ||||
Other income (expenses): | ||||||||
Interest expense | (230,287 | ) | (165,133 | ) | ||||
Other income | 277,755 | 698,875 | ||||||
Other expenses | (461 | ) | (8,366 | ) | ||||
Total other income and (expenses) | 47,007 | 525,376 | ||||||
Loss before taxes from operations | (375,587 | ) | (77,418 | ) | ||||
Provision for income taxes | ||||||||
Net loss | $ | (375,587 | ) | $ | (77,418 | ) | ||
Other comprehensive loss: | ||||||||
Foreign currency translation loss | (85,519 | ) | (52,220 | ) | ||||
Comprehensive loss | $ | (461,106 | ) | $ | (129,638 | ) |
See Accompanying Notes to the Financial Statements
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Xianning Bozhuang Tea Products Co., Ltd.
Statements of Stockholders’ Equity
For the years ended December 31, 2018 and 2017
Accumulated Other | ||||||||||||||||
Paid in | Accumulated | Comprehensive | ||||||||||||||
Capital | Deficit | Loss | Total | |||||||||||||
Balance, January 1, 2017 | $ | 2,759,342 | $ | 52,870 | $ | 6,076 | $ | 2,818,289 | ||||||||
Capital contribution | (729,571 | ) | - | - | (729,571 | ) | ||||||||||
Net loss | - | (77,418 | ) | (77,418 | ) | |||||||||||
Foreign currency translation adjustment | - | - | (52,220 | ) | (52,220 | ) | ||||||||||
Balance, December 31, 2017 | 2,029,771 | (24,548 | ) | (46,143 | ) | 1,959,080 | ||||||||||
Balance, January 1, 2018 | 2,029,771 | (24,548 | ) | (46,143 | ) | 1,959,080 | ||||||||||
Net loss | - | (375,587 | ) | - | (375,587 | ) | ||||||||||
Foreign currency translation adjustment | - | - | (85,519 | ) | (85,519 | ) | ||||||||||
Balance, December 31, 2018 | $ | 2,029,771 | $ | (400,135 | ) | $ | (131,662 | ) | $ | 1,497,974 |
See Accompanying Notes to the Financial Statements
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Xianning Bozhuang Tea Products Co., Ltd.
Statements of Cash Flows
For the years ended December 31, 2018 and 2017
2018 | 2017 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (375,587 | ) | $ | (77,418 | ) | ||
Amortization | 5,209 | 33,688 | ||||||
Depreciation | 119,450 | 55,722 | ||||||
Impairment loss | - | 210,158 | ||||||
Increase/(decrease) in accounts and other receivables | (302,054 | ) | 232,333 | |||||
Decrease in inventory | 105,126 | 247,657 | ||||||
Increase/(decrease) in prepayments and other current assets | (220,748 | ) | 301,372 | |||||
Decrease in payables and other current liabilities | 646,282 | 480,340 | ||||||
Net cash provided by (used in) operating activities | (22,322 | ) | 1,483,852 | |||||
Cash flows from investing activities | ||||||||
Purchase of plant and equipment and construction in progress | (76,352 | ) | (563,616 | ) | ||||
Net cash used in investing activities | (76,352 | ) | (563,616 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from injection of capital by owners | (954,171 | ) | ||||||
Receiving bank loans | 128,644 | |||||||
Repayment of borrowings | (37,803 | ) | ||||||
Net cash provided by financing activities | 128,644 | (991,974 | ) | |||||
Net increase of cash and cash equivalents | 29,970 | (71,738 | ) | |||||
Effect of foreign currency translation on cash and cash equivalents | (1,925 | ) | 3,817 | |||||
Cash and cash equivalents–beginning of year | 6,401 | 74,322 | ||||||
Cash and cash equivalents–end of year | $ | 34,446 | $ | 6,401 | ||||
Supplementary cash flow information: | ||||||||
Interest paid | $ | 230,287 | $ | 165,133 |
See Accompanying Notes to the Financial Statements
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Xianning Bozhuang Tea Products Co., Ltd.
Notes to Financial Statements
1. Organization and Principal Activities
Xianning Bozhuang Tea Products Co., Ltd. (the “Company”) is registered as a limited liability company in Xianning City, Huibei Province, People’s Republic of China. The Company’s primary business activities are to produce tea products and sell such products in China.
2. Summary of Significant Accounting Policies
Method of accounting
Management has prepared the accompanying financial statements and these notes in accordance to generally accepted accounting principles in the United States of America; the Company maintains its general ledger and journals with the accrual method accounting.
Use of estimates
The preparation of the financial statements 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 amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates.
Cash and cash equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less, and unencumbered bank deposits to be cash equivalents.
Accounts receivables
Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off against allowances.
Inventories
Inventories consist of raw materials and finished goods are stated at the lower of cost or market value. Finished goods costs include: materials, direct labor, inbound shipping costs, and allocated overhead. The Company applies the weighted average cost method to its inventory.
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Advances and prepayments to suppliers
The Company makes advance payment to suppliers and vendors for the procurement of raw materials. Upon physical receipt and inspection of the raw materials from suppliers the applicable amount is reclassified from advances and prepayments to suppliers to inventory.
Plant and equipment
Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. The Company’s typically applies a salvage value of 5%. The estimated useful lives of the plant and equipment are as follows:
Building | 20 years | |||
Machinery and equipment | 5-10 years | |||
Office Equipment | 5-20 years | |||
Vehicle | 5-10 years |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss are included in the Company’s results of operations. The costs of maintenance and repairs are recognized to expenses as incurred; significant renewals and betterments are capitalized.
Intangible assets
Intangible assets are carried at cost less accumulated amortization. Amortization is provided over their useful lives, using the straight-line method. The estimated useful lives of the intangible assets are as follows:
Land use rights | 50 years | |||
Software licenses | 2 years | |||
Trademarks | 10 years |
Construction in progress and prepayments for equipment
Construction in progress represents direct and indirect acquisition and construction costs for plants, and costs of acquisition and installation of related equipment. Amounts classified as construction in progress and prepayments for equipment are transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. Depreciation is not provided for assets classified in this account.
Accounting for the impairment of long-lived assets
The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize the long-lived assets to generate the adequate profits. Impairment is present if the carrying amount of an asset is less than its expected future undiscounted cash flows.
If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed are reported at the lower of the carrying amount or fair value less costs to sell.
Statutory reserves
Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital.
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Foreign currency translation
The accompanying financial statements are presented in United States dollars. The functional currencies of the Company are in Renminbi (RMB). The Company’s assets and liabilities are translated into United States dollars from RMB at year-end exchange rates, and its revenues and expenses are translated at the average exchange rate during the year. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.
2018 | 2017 | |||||||
Year end RMB: US$ exchange rate | 6.8764 | 6.5067 | ||||||
Annual average RMB: US$ exchange rate | 6.5137 | 6.6133 |
The RMB is not freely convertible into foreign currencies and all foreign exchange transactions must be conducted through authorized financial institutions.
Revenue recognition
The Company recognizes revenue when all the following criteria have been met: it has negotiated the terms of the transaction with the customer which includes setting a fixed sales price, it has transferred of possession of the product to the customer, the customer does not have the right to return the product, the customer is able to further sell or transfer the product onto others for economic benefit without any other obligation to be fulfilled by the Company, and the Company is reasonably assured that funds have been or will be collected from the customer. The Company’s the amount of revenue recognized to the books reflects the value of goods invoiced, net of any value-added tax (VAT) or excise tax.
Advertising
All advertising costs are expensed as incurred.
Shipping and handling
All outbound shipping and handling costs are expensed as incurred.
Research and development
All research and development costs are expensed as incurred.
Retirement benefits
Retirement benefits in the form of mandatory government sponsored defined contribution plans are charged to the either expenses as incurred or allocated to inventory as part of overhead.
Income taxes
The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of 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 if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.
Comprehensive income
The Company uses FASB ASC Topic 220, “Reporting Comprehensive Income”. Comprehensive income is comprised of net income and all changes to the statements of stockholders’ equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders.
Earnings per share
The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive effects of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of options or warrants are calculated using the treasury stock method. Securities that are potentially an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.
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Financial instruments
The Company’s financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:
● | Level 1 - inputs to the valuation methodology used quoted prices for identical assets or liabilities in active markets. | |
● | Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. | |
● | Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.
Commitments and contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
Recent accounting pronouncements
In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. We do not believe the adoption of this ASU would have a material effect on our financial statements.
We do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on our balance sheets, statements of operations and comprehensive loss and statements of cash flows.
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3. Going Concern
The accompanying financial statements have been prepared on a going-concern basis. The going-concern basis assumes that assets will be realized and liabilities will be settled in the ordinary course of business in the amounts disclosed in the financial statements. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. For the years ended December 31, 2018 and 2017, the Company incurred substantial losses of $375,587 and $77,418, respectively. As of December 31, 2018, the Company had a working capital deficit of approximately $1,162,880. These conditions raise substantial doubt as to whether the Company may continue as a going concern.
To improve its solvency, the Company is working to obtain new working capital through private placements of its common stock or convertible debt securities to qualified investors and loans from financial institutions.
4. Plant and Equipment
2018 | 2017 | |||||||
At Cost: | ||||||||
Building | $ | 884,341 | $ | 934,589 | ||||
Machinery and equipment | 543,504 | 520,002 | ||||||
Office Equipment | 28,796 | 30,432 | ||||||
Vehicle | 33,121 | 35,003 | ||||||
$ | 1,489,762 | $ | 1,520,026 | |||||
Less: Accumulated depreciation | (182,263 | ) | (73,040 | ) | ||||
$ | 1,307,499 | $ | 1,446,986 |
Depreciation expense for the years ended December 31, 2018 and 2017 was $ 119,450 and $ 55,722, respectively.
5. Intangible Assets
2018 | 2017 | |||||||
At Cost: | ||||||||
Land use rights | 14,542 | 15,369 | ||||||
Software licenses | 2,589 | 2,736 | ||||||
Trademark | 29,856 | 31,552 | ||||||
$ | 46,987 | $ | 49,657 | |||||
Less: Accumulated amortization | (9,710 | ) | (5,047 | ) | ||||
$ | 37,277 | $ | 44,610 |
Amortization expense for the years ended December 31, 2018 and 2017 was $ 5,209 and $33,688, respectively.
Impairment loss for the years ended December 31, 2018 and 2017 was $0 and $210,158, respectively.
6. Bank Loans
The Company had outstanding short-term loans with following financial institutions as detailed in the table below:
Lender | Due Date | Interest rate | 2018 | 2017 | ||||||||||
Hubei Xianning Rural Commercial Bank -Zhanggong Branch | 12/24/2019 | 9.24 | % | $ | 681,745 | $ | - | |||||||
Hubei Xianning Rural Commercial Bank -Zhanggong Branch | 9/11/2018 | 4.35 | % | 276,307 | 307,375 | |||||||||
Hubei Xianning Rural Commercial Bank -Zhanggong Branch | 11/30/2018 | 9.24 | % | - | 730,017 | |||||||||
Industrial & Commercial Bank of China-Xianning Quanshan Branch | 6/29/2019 | 4.35 | % | 145,425 | - | |||||||||
Xianning Enterprise Financial Service Company | 4/15/2019 | 8 | % | 436,275 | 461,063 | |||||||||
$ | 1,539,752 | $ | 1,498,455 |
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The loans from Bank of Hubei Xianning Rural Commercial Bank -Zhanggong Branch and Industrial & Commercial Bank of China-Xianning Quanshan Branch were guaranteed by Hubei Xianning Jinqiao Credit Guarantee Co., Ltd.
7. Equity
For the year ended December 31, 2017, the Company received paid in capital of RMB 12,849,827 (US$ 2,029,771).
For the year ended December 31, 2018, the Company received paid in capital of RMB 12,849,827 (US$ 2,029,771).
8. Income Taxes
The Company’s primary operations are located in the PRC. The corporate income tax rate in the PRC is 25%.
The following tables provide the reconciliation of the differences between the statutory and effective tax expenses for the years ended December 31, 2018 and 2017:
2018 | 2017 | |||||||
Loss attributed to PRC operations | $ | (375,587 | ) | $ | (77,418 | ) | ||
Loss before tax | (375,587 | ) | (77,418 | ) | ||||
PRC Statutory Tax at 25% Rate | - | - | ||||||
Effect of tax exemption granted | - | - | ||||||
Income tax | $ | - | $ | - |
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9. Risks
A. | Credit risk | |
The Company’s deposits are made with banks located in the PRC. They do not carry federal deposit insurance and may be subject to loss of the banks become insolvent.
Since the Company’s inception, the age of account receivables has been less than one year indicating that the Company is subject to minimal risk borne from credit extended to customers. | ||
B. | Interest risk | |
The company is subject to interest rate risk when short term loans become due and require refinancing. | ||
C. | 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 changes in the political, economic, and legal environments in the PRC. | ||
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 governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. | ||
D. | Environmental risks | |
The Company has procured environmental licenses required by the PRC government. The Company has both a water treatment facility for water used in its production process and secure transportation to remove waste off site. In the event of an accident, the Company has purchased insurance to cover potential damage to employees, equipment, and local environment. | ||
E. | Inflation Risk | |
Management monitors changes in prices levels. Historically inflation has not materially impacted the company’s financial statements; however, significant increases in the price of raw materials and labor that cannot be passed to the Company’s customers could adversely impact the Company’s results of operations. |
10. Subsequent Events
The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. The major shareholder of the Company made a cash contribution of total RMB 30,000,000 (USD 4,469,673) on April 12, April 15 and May 13 of 2019.
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