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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 8/25/22 Roan Holdings Group Co., Ltd. 6-K 6/30/22 86:5M EdgarAgents LLC/FA |
Document/Exhibit Description Pages Size 1: 6-K Report of Foreign Private Issuer HTML 32K 2: EX-99.1 Unaudited Condensed Consolidated Financial HTML 644K Statements for the Six Months Ended June 30, 2022 and 2021 3: EX-99.2 Management's Discussion and Analysis of Financial HTML 72K Condition and Results of Operations 4: EX-99.3 Press Release Dated August 24, 2022 HTML 127K 10: R1 Document And Entity Information HTML 39K 11: R2 Condensed Consolidated Balance Sheets HTML 175K 12: R3 Condensed Consolidated Balance Sheets HTML 44K (Parentheticals) 13: R4 Condensed Consolidated Statements of Operations HTML 136K and Comprehensive Income (Loss) (Unaudited) 14: R5 Condensed Consolidated Statements of Operations HTML 32K and Comprehensive Income (Loss) (Unaudited) (Parentheticals) 15: R6 Condensed Consolidated Statements of Changes in HTML 61K Shareholders? Equity (Deficit) 16: R7 Condensed Consolidated Statements of Cash Flows HTML 120K (Unaudited) 17: R8 Organization and Principal Activities HTML 55K 18: R9 Liquidity HTML 30K 19: R10 Summary of Significant Accounting Policies HTML 30K 20: R11 Restricted Cash HTML 29K 21: R12 Accounts Receivable, Net HTML 33K 22: R13 Other Receivables HTML 28K 23: R14 Loans Due From Third Parties HTML 33K 24: R15 Property and Equipment, Net HTML 31K 25: R16 Intangible Assets, Net HTML 33K 26: R17 Accrued Expenses and Other Current Liabilities HTML 29K 27: R18 Income Tax and Tax Payables HTML 47K 28: R19 Earnings (Loss) Per Share HTML 32K 29: R20 Related Party Transactions and Balances HTML 30K 30: R21 Redeemable Convertible Preferred Shares HTML 39K 31: R22 Equity HTML 56K 32: R23 Segment Reporting HTML 48K 33: R24 Commitments and Contingencies HTML 36K 34: R25 Subsequent Events HTML 27K 35: R26 Accounting Policies, by Policy (Policies) HTML 35K 36: R27 Organization and Principal Activities (Tables) HTML 45K 37: R28 Restricted Cash (Tables) HTML 28K 38: R29 Accounts Receivable, Net (Tables) HTML 34K 39: R30 Other Receivables (Tables) HTML 27K 40: R31 Loans Due From Third Parties (Tables) HTML 32K 41: R32 Property and Equipment, Net (Tables) HTML 30K 42: R33 Intangible Assets, Net (Tables) HTML 34K 43: R34 Accrued Expenses and Other Current Liabilities HTML 29K (Tables) 44: R35 Income Tax and Tax Payables (Tables) HTML 44K 45: R36 Earnings (Loss) Per Share (Tables) HTML 30K 46: R37 Equity (Tables) HTML 39K 47: R38 Segment Reporting (Tables) HTML 43K 48: R39 Commitments and Contingencies (Tables) HTML 33K 49: R40 Organization and Principal Activities (Details) HTML 56K 50: R41 Organization and Principal Activities (Details) - HTML 82K Schedule of activities of the company and its subsidiaries 51: R42 Liquidity (Details) HTML 48K 52: R43 Restricted Cash (Details) HTML 30K 53: R44 Restricted Cash (Details) - Schedule of company?s HTML 28K restricted cash 54: R45 Accounts Receivable, Net (Details) - Schedule of HTML 30K accounts receivable 55: R46 Accounts Receivable, Net (Details) - Schedule of HTML 30K movement of allowance for doubtful accounts 56: R47 Other Receivables (Details) - Schedule of other HTML 29K receivables 57: R48 Loans Due From Third Parties (Details) HTML 55K 58: R49 Loans Due From Third Parties (Details) - Schedule HTML 28K of loans due from third parties 59: R50 Loans Due From Third Parties (Details) - Schedule HTML 27K of allowance for credit losses 60: R51 Property and Equipment, Net (Details) HTML 25K 61: R52 Property and Equipment, Net (Details) - Schedule HTML 39K of property and equipment, net 62: R53 Intangible Assets, Net (Details) HTML 26K 63: R54 Intangible Assets, Net (Details) - Schedule of HTML 37K intangible assets 64: R55 Intangible Assets, Net (Details) - Schedule of HTML 39K amortization expenses 65: R56 Accrued Expenses and Other Current Liabilities HTML 33K (Details) - Schedule accrued expenses and other current liabilities 66: R57 Income Tax and Tax Payables (Details) HTML 32K 67: R58 Income Tax and Tax Payables (Details) - Schedule HTML 30K of income tax expense 68: R59 Income Tax and Tax Payables (Details) - Schedule HTML 38K of reconciliation of the statutory tax rate to the effective tax rate 69: R60 Income Tax and Tax Payables (Details) - Schedule HTML 45K of deferred tax assets (liabilities), net 70: R61 Earnings (Loss) Per Share (Details) - Schedule of HTML 39K computation of basic and diluted loss per common share 71: R62 Related Party Transactions and Balances (Details) HTML 69K 72: R63 Redeemable Convertible Preferred Shares (Details) HTML 61K 73: R64 Equity (Details) HTML 82K 74: R65 Equity (Details) - Schedule of warrants activity HTML 57K 75: R66 Equity (Details) - Schedule of fair value of HTML 36K series A warrants 76: R67 Segment Reporting (Details) HTML 26K 77: R68 Segment Reporting (Details) - Schedule of segment HTML 64K reporting 78: R69 Commitments and Contingencies (Details) HTML 33K 79: R70 Commitments and Contingencies (Details) - Schedule HTML 33K of operating lease related assets and liabilities 80: R71 Commitments and Contingencies (Details) - Schedule HTML 34K of maturities of lease liabilities 81: R72 Subsequent Events (Details) HTML 27K 84: XML IDEA XML File -- Filing Summary XML 164K 82: XML XBRL Instance -- ea164063-6k_roanholdings_htm XML 981K 83: EXCEL IDEA Workbook of Financial Reports XLSX 140K 6: EX-101.CAL XBRL Calculations -- rahgf-20220630_cal XML 125K 7: EX-101.DEF XBRL Definitions -- rahgf-20220630_def XML 662K 8: EX-101.LAB XBRL Labels -- rahgf-20220630_lab XML 1.31M 9: EX-101.PRE XBRL Presentations -- rahgf-20220630_pre XML 660K 5: EX-101.SCH XBRL Schema -- rahgf-20220630 XSD 235K 85: JSON XBRL Instance as JSON Data -- MetaLinks 346± 498K 86: ZIP XBRL Zipped Folder -- 0001213900-22-050871-xbrl Zip 232K
Exhibit 99.1
ROAN HOLDINGS GROUP CO., LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollar, except for the number of shares)
June 30, 2022 |
December 31, 2021 |
|||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | i 1,035,674 | $ | i 1,947,142 | ||||
Restricted cash | i 26,339,708 | i 29,693,689 | ||||||
Accounts receivable, net | i 7,122,604 | i 6,929,529 | ||||||
Inventories | i 3,027 | i 33,598 | ||||||
Loan receivables due from third parties, net | i 26,375,018 | i 23,751,471 | ||||||
Due from related parties | i 1,325 | i 5,941 | ||||||
Other current assets | i 72,250 | i 70,910 | ||||||
Other receivables, net | i 745,964 | i 656,835 | ||||||
Total current assets | i 61,695,570 | i 63,089,115 | ||||||
Pledged deposits | i 15,329 | i 48,752 | ||||||
Property and equipment, net | i 64,146 | i 77,073 | ||||||
Intangible assets, net | i 2,519,491 | i 3,123,394 | ||||||
Right of use assets | i 103,801 | i 37,313 | ||||||
Goodwill | i 267,331 | i 267,331 | ||||||
Total non-current assets | i 2,970,098 | i 3,553,863 | ||||||
Total Assets | $ | i 64,665,668 | $ | i 66,642,978 | ||||
LIABILITIES | ||||||||
Customer pledged deposits | $ | - | $ | i 7,846 | ||||
Unearned income | i 69,099 | i 72,523 | ||||||
Reserve for financial guarantee losses | i 430,179 | i 651,341 | ||||||
Dividends payable | i 480,000 | i 480,000 | ||||||
Tax payable | i 3,012,439 | i 2,614,257 | ||||||
Due to related parties | i 123,785 | i 123,117 | ||||||
Warrant liabilities | - | i 16,998 | ||||||
Operating lease liabilities, current portion | i 58,269 | i 65,498 | ||||||
Accrued expenses and other liabilities | i 1,488,507 | i 1,155,903 | ||||||
Bank loans | i 5,671,758 | i 5,961,460 | ||||||
Total current liabilities | i 11,334,036 | i 11,148,943 | ||||||
Operating lease liabilities, noncurrent portion | i 61,172 | - | ||||||
Deferred tax liabilities | i 456,118 | i 544,355 | ||||||
Total non-current Liabilities | i 517,290 | i 544,355 | ||||||
Total Liabilities | $ | i 11,851,326 | $ | i 11,693,298 | ||||
Commitments and Contingencies | - | - | ||||||
Shareholders’ Equity | ||||||||
Ordinary Share, no par value, unlimited shares authorized; i i 25,287,851 / and i i 25,287,851 / shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | - | - | ||||||
Class A convertible preferred shares, no par value, unlimited shares authorized; i i 715,000 / and i i 715,000 / shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | $ | i 12,052,106 | $ | i 11,711,727 | ||||
Class B convertible preferred shares, no par value, unlimited shares authorized; i i 291,795,150 / and i i 291,795,150 / shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | i 31,087,732 | i 31,087,732 | ||||||
Additional paid-in capital | i 3,312,189 | i 3,312,189 | ||||||
Statutory reserve | i 362,797 | i 362,797 | ||||||
Accumulated deficit | ( i 14,824,176 | ) | ( i 14,805,802 | ) | ||||
Accumulated other comprehensive income | i 1,437,234 | i 3,128,086 | ||||||
Total Roan Holdings Group Co., Ltd.’s Shareholders’ Equity | $ | i 33,427,882 | $ | i 34,796,729 | ||||
Noncontrolling interests | i 19,386,460 | i 20,152,951 | ||||||
Total Equity | i 52,814,342 | i 54,949,680 | ||||||
Total Liabilities and Equity | $ | i 64,665,668 | $ | i 66,642,978 |
The accompanying notes are an integral part of the condensed interim consolidated financial statements
C: 1
ROAN HOLDINGS GROUP CO., LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Expressed in U.S. dollar, except for the number of shares)
For the Six Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
(Unaudited) | (Unaudited) | |||||||
Revenue from services | $ | i 1,111,651 | $ | i 330,788 | ||||
Revenue from healthcare service packages | i 26,209 | - | ||||||
Cost of revenue | ( i 18,616 | ) | - | |||||
Net revenue of services | i 1,119,244 | i 330,788 | ||||||
Commission and fees on financial guarantee services | i 185,634 | i 191,920 | ||||||
(Provision) recovery of provision for financial guarantee services | i 195,915 | ( i 15,586 | ) | |||||
Commission and fee income on guarantee services, net | i 381,549 | i 176,334 | ||||||
Interest and fees income | ||||||||
Interest income on loans due from third parties | i 1,112,816 | i 998,827 | ||||||
Interest income on deposits with banks | i 178,214 | i 271,212 | ||||||
Total interest and fees income | i 1,291,030 | i 1,270,039 | ||||||
Operating income | i 2,791,823 | i 1,777,161 | ||||||
Operating expenses | ||||||||
Salaries and employee surcharges | i 658,544 | i 564,110 | ||||||
Other operating expenses | i 1,184,588 | i 1,514,281 | ||||||
Changes in fair value of warrant liabilities | ( i 16,998 | ) | i 27,729 | |||||
Total operating expenses | i 1,826,134 | i 2,106,120 | ||||||
Other income (expenses) | ||||||||
Other income (expenses), net | ( i 147,823 | ) | ( i 155,633 | ) | ||||
Interest income (expenses), net | i 91,887 | i 11,127 | ||||||
Total other expenses | ( i 55,936 | ) | ( i 144,506 | ) | ||||
Income (loss) before income taxes | i 909,753 | ( i 473,465 | ) | |||||
Income tax (expenses) benefit | ( i 346,381 | ) | i 13,068 | |||||
Net (loss) income | i 563,372 | ( i 460,397 | ) | |||||
Less: Net income attributable to noncontrolling interests | i 241,367 | i 67,030 | ||||||
Net income (loss) attributable to Roan Holding Group Co., Ltd.’s shareholders | $ | i 322,005 | $ | ( i 527,427 | ) | |||
Comprehensive income (loss) | ||||||||
Net income (loss) | i 563,372 | ( i 460,397 | ) | |||||
Foreign currency translation | ( i 2,698,710 | ) | i 529,793 | |||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | ( i 766,491 | ) | i 226,482 | |||||
Total comprehensive loss attributable to Roan Holdings Group Co., Ltd.’s shareholders | $ | ( i 1,368,847 | ) | $ | ( i 157,086 | ) | ||
Weighted average number of ordinary share outstanding | ||||||||
Basic and Diluted* | i 25,287,887 | i 25,287,887 | ||||||
Loss per share | ||||||||
Net income (loss) per share – Basic and Diluted | $ | i 0.01 | $ | ( i 0.02 | ) |
* | The Company used net loss as the control number to determine whether the warrants, Class A and Class B preferred shares are anti-dilutive. Because the Company suffered loss, the number of warrants, Class A preferred shares and Class B preferred shares are excluded from the computation as the anti-dilutive effect. |
The accompanying notes are an integral part of the condensed interim consolidated financial statements
2
ROAN HOLDINGS GROUP CO., LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIT)
(Expressed in U.S. dollar, except for the number of shares)
Six months ended June 30, 2022
Attributable to Roan Holdings Group Co., Ltd.’s Shareholders | ||||||||||||||||||||||||||||||||||||||||||||||||
Ordinary Share | Class
A Preferred Shares |
Class
B Preferred Shares |
Additional paid-in |
Statutory | Retained earnings (Accumulated |
Accumulated other comprehensive (loss) |
Non- controlling |
Total | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | capital | Reserve | Deficit) | income | interest | equity | |||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | i 25,287,851 | $ | - | i 715,000 | $ | i 11,711,727 | i 291,795,150 | $ | i 31,087,732 | $ | i 3,312,189 | $ | i 362,797 | $ | ( i 14,805,802 | ) | i 3,128,086 | i 20,152,951 | i 54,949,680 | |||||||||||||||||||||||||||||
Net income | - | - | - | - | - | - | - | - | i 322,005 | - | i 241,367 | i 563,372 | ||||||||||||||||||||||||||||||||||||
Dividend to shareholders | - | - | - | i 340,379 | - | - | - | - | ( i 340,379 | ) | - | - | - | |||||||||||||||||||||||||||||||||||
Transfer to statutory reserve | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | - | - | - | - | - | - | - | - | - | ( i 1,690,852 | ) | ( i 1,007,858 | ) | ( i 2,698,710 | ) | |||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 (unaudited) | i 25,287,851 | $ | - | i 715,000 | $ | i 12,052,106 | i 291,795,150 | $ | i 31,087,732 | $ | i 3,312,189 | $ | i 362,797 | $ | ( i 14,824,176 | ) | i 1,437,234 | i 19,386,460 | i 52,814,342 |
Six months ended June 30, 2021
Attributable to Roan Holdings Group Co., Ltd.’s Shareholders | ||||||||||||||||||||||||||||||||||||||||||||||||
Ordinary Share | Class
A Preferred Shares |
Class
B Preferred Shares |
Additional paid-in |
Statutory | Retained earnings (Accumulated |
Accumulated other comprehensive (loss) |
Non- controlling |
Total | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | capital | Reserve | Deficit) | income | interest | equity | |||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | i 25,287,851 | $ | - | i 715,000 | $ | i 11,025,327 | i 291,795,150 | $ | i 31,087,732 | $ | i 3,312,189 | $ | i 202,592 | $ | ( i 14,330,288 | ) | i 2,310,369 | i 19,278,508 | i 52,886,429 | |||||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | ( i 527,427 | ) | - | i 67,030 | ( i 460,397 | ) | ||||||||||||||||||||||||||||||||||
Deconsolidation of subsidiaries | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
Dividend to shareholders | - | - | - | i 343,200 | - | - | - | - | ( i 343,200 | ) | - | - | ||||||||||||||||||||||||||||||||||||
Transfer to statutory reserve | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | - | - | - | - | - | - | - | - | - | i 303,311 | i 226,482 | i 529,793 | ||||||||||||||||||||||||||||||||||||
Balance as of June 30,2021 (unaudited) | i 25,287,851 | $ | - | i 715,000 | $ | i 11,368,527 | i 291,795,150 | $ | i 31,087,732 | $ | i 3,312,189 | $ | i 202,592 | $ | ( i 15,200,915 | ) | i 2,613,680 | i 19,572,020 | i 52,955,825 |
The accompanying notes are an integral part of the condensed interim consolidated financial statements
3
ROAN HOLDINGS GROUP CO., LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollar, except for the number of shares)
For the Six Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
(Unaudited) | (Unaudited) | |||||||
Cash Flows from Operating Activities: | ||||||||
Net (loss) income | $ | i 563,372 | $ | ( i 460,397 | ) | |||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Depreciation and amortization expenses | i 530,060 | i 539,327 | ||||||
Bad debt provision | i 21,149 | i 330,573 | ||||||
Provision (recovery of provision) for financial guarantee losses | ( i 195,915 | ) | i 15,586 | |||||
Deferred tax benefits | ( i 63,872 | ) | ( i 219,226 | ) | ||||
Changes in fair value of warrant liabilities | ( i 16,998 | ) | i 27,730 | |||||
Loss from lease modification | - | i 20,386 | ||||||
Accretion of finance leases | i 1,654 | i 4,900 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivables | ( i 157,705 | ) | i 1,112,931 | |||||
Inventories | i 30,571 | ( i 2,330 | ) | |||||
Other current assets | ( i 1,340 | ) | i 3,419,669 | |||||
Other receivables | ( i 92,457 | ) | i 2,997,179 | |||||
Pledged deposits and other non-current assets | i 33,423 | i 82,099 | ||||||
Advances from customers | ( i 3,424 | ) | ( i 19,159 | ) | ||||
Tax payable | i 398,182 | i 304,981 | ||||||
Accrued expenses and other liabilities | i 332,604 | i 67,147 | ||||||
Customer Pledged assets | ( i 7,846 | ) | - | |||||
Operating lease assets and liabilities | ( i 1,370 | ) | - | |||||
Net Cash Provided by Operating Activities | i 1,370,088 | i 8,221,396 | ||||||
Cash Flows from Investing Activities: | ||||||||
Repayment of loans to third parties | ( i 3,962,433 | ) | ( i 3,433,781 | ) | ||||
Payment (disbursement) of due from related party | i 5,284 | ( i 11,160 | ) | |||||
Net Cash Used in Investing Activities | ( i 3,957,149 | ) | ( i 3,444,941 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Repayment of bank loans | - | ( i 2,942,152 | ) | |||||
Disbursement of lease liabilities | ( i 62,562 | ) | ( i 13,320 | ) | ||||
Net Cash Used in Financing Activities | ( i 62,562 | ) | ( i 2,955,472 | ) | ||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash in banks | ( i 1,615,826 | ) | i 564,020 | |||||
Net increase (decrease) in cash, cash equivalents, and restricted cash in banks | ( i 4,265,449 | ) | i 2,385,003 | |||||
Cash, cash equivalents, and restricted cash in banks at beginning of year | i 31,640,831 | i 30,807,604 | ||||||
Cash, cash equivalents, and restricted cash in banks at end of year | $ | i 27,375,382 | $ | i 33,192,607 | ||||
Supplemental Cash Flow Information | ||||||||
Cash paid for interest expense | $ | i 128,035 | $ | i 146,215 | ||||
Cash paid for income taxes | $ | - | $ | - |
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statement of financial position that sum to the total of the same amounts shown in the consolidated statements of cash flows:
June 30, 2022 |
||||||||
Cash and cash equivalents | $ | i 1,035,674 | i 2,258,679 | |||||
Restricted cash in banks | i 26,339,708 | i 30,933,928 | ||||||
Total cash, cash equivalents and restricted cash | $ | i 27,375,382 | i 33,192,607 |
The accompanying notes are an integral part of the condensed interim consolidated financial statements
4
ROAN HOLDINGS GROUP CO., LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND PRINCIPAL ACTIVITIES
Roan Holdings Group Co., Ltd. (formerly known as China Lending Corporation or DT Asia Investments Limited) (“Roan”, or the “Company”) is a holding company incorporated on April 8, 2014, under the laws of the British Virgin Islands. On November 27, 2019, the BVI Registrar of Corporate Affairs approved the Company’s name change to Roan Holdings Group Co., Ltd., and on January 8, 2020, the Financial Industry Regulatory Authority (“FINRA”) accepted the Company’s request for the following changes on the Over the Counter Bulletin Board (“OTCBB”): 1) the name change from China Lending Corporation to Roan Holdings Group Co., Ltd., and 2) the ticker symbol change from “CLDOF” to “RAHGF” for its ordinary shares and from “CLDCF” to “RONWF” for its warrants. The new CUSIPS of the Company’s ordinary shares and warrants are G7606D 115 and G7606D 107, respectively.
On December 30, 2019, the Company set up Fortis Industrial Group Limited (former name “Fortis Health Industrial Group Limited”) in Hong Kong, which is a holding company of several direct and indirect subsidiaries and as such, does not currently have any business operations. Fortis Industrial Group Limited directly owns i 100% of the equity in Zhongtan Future Industrial Operation (Hangzhou) Co., Ltd., which was incorporated on June 23, 2022. Zhongtan provides industrial operation services focusing on new energy storage, new materials and the semiconductor industry.
On February 28, 2020, a new wholly-owned subsidiary, Ningbo Zeshi Insurance Technology Co., Ltd. (“Zeshi Insurance”), was incorporated under the laws of the PRC. Its principal business is providing insurance technology services and related services.
On March 3, 2020, a new wholly-owned subsidiary, Zeshi (Hangzhou) Health Management Co., Ltd. (“Zeshi Health”), was incorporated under the laws of the PRC. Zeshi Health provides services in health management, health big data management and blockchain technology-based health information management.
On June 23, 2022, a new wholly-owned subsidiary, Zhongtan Future Industrial Operation (Hangzhou) Co., Ltd. (“Zhongtan Industrial Operation”), was incorporated under the laws of the PRC, which provides industrial operation services focusing on new energy storage, new materials and semiconductor industry.
Incorporation of joint ventures
On April 2, 2022, the Company’s subsidiary, Hangzhou Zeshi Investment Partnership (Limited Partnership) (杭州泽时投资合伙企业(有限合伙) ) (“Hangzhou Zeshi”), invested RMB i 22 million (approximately $ i 3.41 million) to a joint venture, Zhongxin Future (Hangzhou) Semiconductor Technology Industry Development Co., Ltd. (中芯未来(杭州)半导体科技产业发展有限公司) (“ZhongXin”) and holds i 22% of the equity in the joint venture. ZhongXin provides industrial operation solutions and will set up industrial parks by collaborating with local government in multiple areas for the manufacturing, marketing and distribution of the semiconductor products and new materials.
On December 16, 2021, Hangzhou Zeshi invested RMB i 2 million (approximately $ i 0.31 million) in Zhongtan Future New Energy Industry Development (Zhejiang) Co., Ltd. (中碳未来新能源产业发展(浙江)有限公司) (“Zhongtan Future”), and held i 2% its equity. On June 1, 2022, a shareholder of Zhongtan Future agreed to transfer i 8% of its equity interest in Zhongtan Future to Hangzhou Zeshi. After the transfer, Hangzhou Zeshi owns i 10% of the equity interest in Zhongtan Future.
On November 8, 2021,the Company set up a joint venture company, FINE C+ Interactive Technology (Hangzhou) Limited (乐享未来互动科技(杭州)有限公司) (“FINE C+ Interactive”) to provide cultural and tourism services, education development industry business and personal financial services. The Company and the Company’s business partner, Shuzhiyun Holdings (Beijing) Co., Ltd. (“Shuzhiyun”) hold i 35% and i 14% of the equity in the joint venture, respectively.
On October 14, 2021, the Company’s subsidiary, Yifu Health Industry (Ningbo) Co., Ltd. (“Yi Fu”) set up a joint venture company, FINE C+ Health (Hangzhou) Technology Limited (乐享未来健康科技(杭州)有限公司) (“FINE C+ Health”), to provide online medical consultation and traditional Chinese medicine. Yi Fu and the business partner of the Company, Shuzhiyun, hold i 40% and i 30% of the equity in the joint venture, respectively.
As of the date of this report, none of above investments in joint ventures had been paid.
Disposition of China Roan Industrial-Financial Holdings Group Co., Ltd. (“Roan HK”) in fiscal year 2021.
On September 30, 2021, the Company sold 100% of the equity interest it held in China Roan Industrial-Financial Holdings Group Co., Ltd. (“Roan HK”), a holding company that has no business operations, to Yuanjia Asset Management Co., Ltd., a BVI company (“Yuanjia”), for a total of approximately $282 (HK$2,200). The net assets of Roan HK were negative $492,495 as of September 30, 2021, resulting in a gain on deconsolidation of $492,777 and other comprehensive loss of $2,494. Roan HK’s subsidiary, Jing Kai was disposed at the same time.
As of June 30, 2022, the Company was mainly engaged in industrial financial services, which included financial guarantee services and financial consulting services, and industrial operation services. The industrial operation services focuses on the construction and operation services for industrial parks for new energy storage, new materials and the semiconductor industry.
5
ROAN HOLDINGS GROUP CO., LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements reflect the activities of the Company and its subsidiaries as follows:
Name | Background | Ownership | ||
i Adrie Global Holdings Limited (“Adrie”) | i ● A BVI company ● Incorporated on November 19, 2014 ● A holding company |
i 100% owned by Roan | ||
i China Roan Industrial-Financial Holdings Group Co., Limited (“Roan HK”) | i ● A Hong Kong company ● Incorporated on February 11, 2015 ● A holding company ● Formerly known as China Feng Hui Financial Holding Group Co., Limited ● Disposed in September 30, 2021. |
i 100% owned by Adrie | ||
i Fortis Industrial Group Limited (“FIG”) |
i ● A Hong Kong company ● Incorporated on December 30, 2019 ● A holding company ● Formerly known as “Fortis Health Industrial Group Limited” |
i 100% owned by Adrie | ||
i Xinjiang Feng Hui Jing Kai Direct Lending Limited (“Jing Kai”) |
i ● A PRC company and deemed a wholly foreign owned enterprise ● Incorporated on May 14, 2015 ● Registered capital of $18 million ● A holding company ● Disposed in September 30, 2021 with Roan HK. |
i 100% owned by Roan HK | ||
i Yifu Health Industry (Ningbo) Co., Ltd. (“Yi Fu”) |
i ● A PRC company ● Incorporated on December 19, 2016 ● Registered capital of $30 million ● Planning for financial lease services ● Formerly known as Ningbo Ding Tai Financial Leasing Co., Limited. |
i 100% owned by FIG | ||
i Zeshi (Hangzhou) Health Management Co., Ltd. (“Zeshi Health”) | i ● A PRC company ● Incorporated on March 3, 2020 ● Registered capital of RMB 5 million ● Engaged in providing services in health management, health big data management and blockchain technology-based health information management. |
i 100% indirectly owned by FIG | ||
i Ningbo Zeshi Insurance Technology Co. (“Zeshi Insurance”) |
i ● A PRC company ● Incorporated on February 28, 2020 ● Registered capital of RMB 5 million ● Engaged in insurance technology services and related services. |
i 100% indirectly owned by FIG | ||
i Hangzhou Zeshi Investment Partnership (Limited Partnership) (“Hangzhou Zeshi”) |
i ● A PRC limited liability partnership ● Incorporated on December 21, 2017 ● Acquired on November 29, 2019 ● Registered capital of $7,750,878 (RMB 51 million) ● Engaged in business factoring program, financing products design, related corporate financing solutions, investments and asset management |
i 100% indirectly owned by FIG | ||
i Zhongtan Future Industrial Operation (Hangzhou) Co., Ltd. (“Zhongtan Industrial Operation”) | i ● A PRC company ● Incorporated on June 23, 2022 ● Registered capital of $1 million ● Planning for industrial operation services |
i 100% directly owned by FIG | ||
i Yijia Travel (Hangzhou) Digital Technology Co. Ltd. (“Yijia”) |
i ● A PRC company ● Incorporated on August 2, 2021 ● Registered capital of RMB 5 million ● Established to engage in business travel services ● In July, 2022, the Company announced Yiija was dissolving prior to material operations commencing |
i 35% directly owned by FIG | ||
i FINE C+ Digital Technology (Hangzhou) Limited (“FINE C+ Digital”) |
i ● A PRC company ● Incorporated on November 8, 2021 ● Registered capital of RMB 5 million ● Established to engaged in lifestyle consumer services including cross-platform clearing and settlement services for consumer reward rights and interests ● In July, 2022, the Company announced Fine C+ Digital was dissolving prior to material operations commencing |
i 45% indirectly owned by FIG | ||
i Lixin Financial Holdings Group Limited (“Lixin Cayman”) |
i ● A Cayman company ● Incorporated on October 25, 2017 ● A holding company |
i 65.0177% owned by Roan |
/
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Name | Background | Ownership | ||
i Lixin Financial Holdings (BVI) Limited (“Lixin BVI”) |
i ● A BVI company ● Incorporated on November 29, 2017 ● A holding company |
i 100% owned by Lixin Cayman | ||
i Lixin Financial Holdings Group Limited (“Lixin HK”) |
i ● A Hong Kong company ● Incorporated on January 15, 2018 ● A holding company |
i 100% owned by Lixin BVI | ||
i Zhejiang Lixin Enterprise Management Group Co., Ltd. (“Zhejiang Lixin”) | i ● A PRC limited liability company ● Incorporated on July 3, 2015 ● Registered capital of $16,162,259 (RMB 101 million) with registered capital fully paid-up ● Engaged in financial guarantee services and related assessment and management services |
i 99% owned by Lixin HK and 1% owned by FIG | ||
i Zhejiang Jing Yu Xin Financing Guarantee Co., Ltd (“Zhejiang Jingyuxin”) |
i ● A PRC limited liability company ● Incorporated on January 5, 2013 ● Registered capital of $48,517,261 (RMB 303 million) with registered capital fully paid-up ● Engaged in financial guarantee services and related assessment and management services |
i 93.4% owned by Zhejiang Lixin | ||
i Lixin (Hangzhou) Asset Management Co., Ltd. (“LAM”) | i ● A PRC limited liability company ● Incorporated on March 21, 2017 ● Registered capital of $4,358,565 (RMB 30 million) with $2,905,710 registered capital paid-up ● Engaged in provision of consulting and assessment services to customers and facilitates financial guarantee services between customers and guarantors |
i 100% owned by Zhejiang Jingyuxin | ||
i Lixin Supply Chain Management (Tianjin) Co., Ltd. (“Lixin Supply Chain”) | i ● A PRC limited liability company ● Incorporated on December 19, 2017 ● Registered capital of $1,513,226 (RMB 10 million) ● Planning for provision of supply chain management service |
i 100% owned by LAM |
The Company’s condensed consolidated statements of operations and comprehensive losses also included China Roan Industrial-Financial Holdings Group Co., Ltd. (“Roan HK”) and Roan HK’s i 100%-owned subsidiary Xinjiang Feng Hui Jing Kai Direct Lending Ltd. (“Jing Kai”) for the period from January 1, 2021 to September 30, 2021 until Roan HK and Jing Kai was disposed of and deconsolidated at September 30, 2021.
2. LIQUIDITY
For the six months ended June 30, 2022, the net income from continuing operations was $ i 563,372, as compared to net loss of $ i 460,397 for the same period of last fiscal year. The Company had an accumulated deficit of $ i 14,824,176 as at June 30, 2022, which required management’s consideration of the Company’s liquidity and its ability to continue as a going concern.
In assessing the Company’s liquidity, the Company monitors and analyzes its cash and its ability to generate sufficient cash flow in the future to support its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements and operating expenses obligations.
As of June 30, 2022, the Company had cash balance of $ i 1,035,674 and a positive working capital of $ i 50,361,534. In addition to the cash balance, the working capital was mainly comprised of restricted cash of $ i 26,339,708, accounts receivable of $ i 7,122,604, loan receivable due from third parties of $ i 26,375,018 and other receivables of $ i 745,964. The balances of these assets are expected to be repaid on maturity dates and will also be used for working capital.
7
In addition, the management estimated the operating expenses obligation for the next twelve months after issuance of the condensed consolidated financial statements to be $ i 3,491,054, which will be covered by the cash flows of $ i 5,536,891 generated from financial guarantee services, financial services, interest income and industrial operation service. The Company’s principal shareholder also pledged to provide continuous financial support to the Company whenever necessary.
The Company plans to fund its operations through revenue generated from its revenues of financial guarantee services and financial consulting services, private placements from investors, and financial support commitments from the Company’s shareholders.
Based on above operating plan, the management believes that the Company will continue as a going concern in the following 12 months.
The Company’s ability to fund these needs will depend on its future performance, which will be subject in part to general economic, competitive and other factors beyond its control. The frequent COVID-19 outbreak in China has caused severe disruptions in transportation, limited access to the facilities and limited support from workforce employed in operations, and as a result, the Company may experience the delays in provision of financial guarantee services and consulting services to customers. Although China has taken strict measures to control the COVID-19 outbreak, temporally lockdown to certain areas in China happened frequently during the six months ended June 30, 2022 and fiscal year 2021. It is estimated that the economy of China will still be impacted to a certain extent. The extent to which the coronavirus impacts the results for fiscal year 2022 will depend on certain future developments, including the duration and spread of the outbreak, emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus variants, all of which is uncertain at this point.
Changes in U.S. or foreign international, social, political, regulatory, and economic conditions or in laws and policies governing foreign trade, manufacturing, development, and investment in the territories or countries where the Company currently conducts its business have in the past and could in the future adversely affect its business. Although the Company does not currently operate in Russia or the Ukraine, the Company is unable to predict the ultimate impact their conflict will have on the Company due to the indirect effects the conflict has had and may continue to have on the global economy and in particular in China where the Company operates or on the global stock markets.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited interim condensed consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying interim consolidated financial statements include our accounts and those of our wholly owned subsidiaries. Accordingly, all intercompany balances and transactions have been eliminated through the consolidation process.
In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, cash flows and changes in equity for the interim periods presented. These unaudited interim financial statements do not include certain information and footnote disclosures as required by the U.S. GAAP for complete annual financial statements. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Form 20-F for the years ended December 31, 2021 and 2020.
Use of estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, determination of fair value of acquiree, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for loan receivables relating to direct loan business, estimates of allowances for other doubtful accounts, valuation of deferred tax assets, assumptions impacting the valuation of ordinary shares, share option, restricted shares and warrant liabilities, and other provisions and contingencies.
Recently issued accounting pronouncements
The Company has reviewed all the recent accounting pronouncements issued to date of the issuance of these financial statements, and does not believe any of these pronouncements will have a material impact on the Company.
4. RESTRICTED CASH
Restricted cash represents cash pledged with banks, other financial institutions, and other guaranteed creditors as guarantor deposits for the Company’s guarantee service customers. The banks, other financial institutions, or other guaranteed creditors providing loans to the Company’s guarantee service customers generally require the Company, as the guarantor of the loans, to pledge a cash deposit usually in the range of i 10% to i 20% of the guaranteed amount, and the other financial institutions requires a cash deposit of i 50% of the guaranteed amount. The deposits are released after the guaranteed loans are paid off and the Company’s guarantee obligation expires which is usually within i 12 months.
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At the same time, the Company requires the guarantee service customers to make a deposit to the Company of the same amount as the deposit the Company pledged to the banks, other financial institutions, and other guaranteed creditors for their loans if the customer does not pledge or collateralize other assets with the Company. The Company records the deposit received as restricted cash on the consolidated balance sheet. The deposit is returned to the customer after the customer repays the loan and the Company’s guarantee obligation expires.
The Company’s restricted cash is comprised of:
June 30, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
Restricted cash in banks and other financial institutions | $ | i 17,680,536 | $ | i 20,592,223 | ||||
Restricted cash in other guaranteed creditors | i 8,659,172 | i 9,101,466 | ||||||
$ | i 26,339,708 | $ | 29,693, 689 |
5. ACCOUNTS RECEIVABLE, NET
The accounts receivable consisted of the following:
June 30, 2022 |
December 31, 2021 |
|||||||
(Unaudited) | ||||||||
Accounts receivable | $ | i 7,827,068 | $ | i 7,704,859 | ||||
Less: allowance for credit losses | i 704,464 | i 775,330 | ||||||
$ | i 7,122,604 | $ | 6,929, 529 |
/
Movement of allowance for credit losses was as follows:
June 30, 2022 |
December 31, 2021 |
|||||||
(Unaudited) | ||||||||
Balance, opening | $ | i 775,330 | $ | i 740,370 | ||||
Provisions (Recovery) | ( i 35,370 | ) | i 17,318 | |||||
Foreign exchange (gain) loss | ( i 35,496 | ) | i 17,642 | |||||
Balance, ending | $ | i 704,464 | $ | i 775,330 |
6. OTHER RECEIVABLES
Other receivables consisted of the following:
June 30, 2022 |
December 31, 2021 |
|||||||
(Unaudited) | ||||||||
Other receivables | $ | i 770,356 | $ | i 678,983 | ||||
Less: allowance for credit losses | i 24,392 | i 22,148 | ||||||
$ | i 745,964 | $ | i 656,835 |
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7. LOANS DUE FROM THIRD PARTIES
June 30, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
Loans due from third parties | $ | i 26,467,655 | $ | i 23,790,917 | ||||
Less: allowance for credit losses | i 92,637 | i 39,446 | ||||||
$ | i 26,375,018 | $ | i 23,751,471 |
/
As of June 30, 2022, the balance of loans due from third parties was comprised of interest bearing loans of $ i 9,268,285, $ i 6,300,294, $ i 5,695,645, $ i 149,296 and $ i 5,054,135 due from five parties. These interest bearing loans have an interest rate of ranging from i 4.35% to i 14%. The loans of $ i 13,652,095 are pledged either with real estate assets or customer’s trade receivables.
As of December 31, 2021, the balance of loans due from third parties was comprised of loans of $ i 11,807,096, $ i 6,622,101, $ i 5,306,798 due from three parties, and a non-interest bearing loan of $ i 0.54 million due from a third party. These three interest bearing loans have an interest rate of ranging from i 7% to i 14%. The loans of $ i 6,622,101 and $ i 5,306,798 are pledged either with real estate assets or customer’s trade receivables.
For the six months ended June 30, 2021 and 2022, a net provision of $ i 12,014, and $ i 53,191 were charged against the consolidated statements of operations and comprehensive income (loss), respectively.
Interest on loans receivable is accrued and credited to income as earned. The Company determines a loan’s past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days.
i As of June 30, 2022, loan of $7,527,209 aged between 180 ~ 365 days, and loan of $7,654,409 aged over one year. The Company has provided allowance for the past due loans.
Movement of allowance for credit losses was as follows:
June 30, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
Balance at beginning of the year | $ | i 39,446 | $ | i 27,432 | ||||
Provisions | i 53,191 | i 12,014 | ||||||
Balance at end of the period/year | $ | i 92,637 | $ | i 39,446 |
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8. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following:
June 30, 2022 |
December 31, 2021 |
|||||||
(Unaudited) | ||||||||
Electronic equipment | $ | i 131,868 | $ | i 137,523 | ||||
Vehicles | i 125,484 | i 131,894 | ||||||
Office equipment | i 23,399 | i 24,594 | ||||||
Leasehold improvements | - | i 50,805 | ||||||
Less: Accumulated depreciation | i 216,605 | i 267,743 | ||||||
$ | i 64,146 | $ | i 77,073 |
/
Depreciation expenses were $ i 12,927 and $ i 8,926 for the six month ended June 30, 2022 and 2021, respectively.
9. INTANGIBLE ASSETS, NET
Intangible assets consisted of the following:
June 30, 2022 |
December 31, 2021 |
|||||||
(Unaudited) | ||||||||
Customer relationship | $ | i 164,226 | $ | i 172,614 | ||||
License | i 2,075,215 | i 2,181,213 | ||||||
Non-Compete Agreements | i 2,567,892 | i 2,699,056 | ||||||
Less: Accumulated amortization | i 2,287,842 | i 1,929,489 | ||||||
$ | i 2,519,491 | $ | i 3,123,394 |
/
Amortization expenses totaled $ i 467,400 and $ i 468,045 for the six months ended June 30, 2022 and 2021, respectively.
The following table sets forth the Company’s amortization expenses for the six months ending June 30 of the following years:
2023 | $ | i 424,747 | ||
2024 | i 103,761 | |||
2025 | i 103,761 | |||
2026 | i 103,761 | |||
2027 | i 103,761 | |||
Thereafter | i 207,522 |
|||
$ | i 1,047,313 |
10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consisted of the following:
June 30, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
Accrued payroll | $ | i 619,311 | $ | i 455,442 | ||||
Dividends due to former shareholders of Zhejiang Jingyuxin (1) | i 177,662 | i 186,737 | ||||||
Other current liabilities | i 691,534 | i 513,724 | ||||||
$ | i 1,488,507 | $ | i 1,155,903 |
/
(1) | The balance represented the unpaid dividends due to former shareholders of Lixin, who sold equity interests in Lixin to the Company. |
11
12. INCOME TAX AND TAX PAYABLES
Cayman Islands
Under the current tax laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
British Virgin Islands
Under the current tax laws of BVI, the Company’s subsidiary incorporated in the BVI is not subject to tax on income or capital gains.
Hong Kong
Roan HK and Lixin HK are incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. i The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018 and 2019. Before that, the applicable tax rate was 16.5% for corporations in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax laws, Roan HK and Lixin HK are exempted from income tax on its foreign-derived income and there are no withholding taxed in Hong Kong on remittance of dividends.
PRC
PRC subsidiaries are subject to PRC Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant PRC income tax laws. The EIT rate for companies operating in the PRC is i 25%.
Income tax expenses consisted of the following:
For the Six Months Ended June 30, |
||||||||
2022 | 2021 | |||||||
(Unaudited) | (Unaudited) | |||||||
Current income tax expenses | $ | ( i 410,253 | ) | $ | ( i 206,158 | ) | ||
Deferred income benefit | i 63,872 | i 219,226 | ||||||
Income tax (expenses) benefit | $ | ( i 346,381 | ) | $ | i 13,068 |
/
Below is a reconciliation of the statutory tax rate to the effective tax rate for the Company:
For the Six Months Ended June 30, | ||||||||
2022 | 2021 | |||||||
(Unaudited) | (Unaudited) | |||||||
PRC statutory income tax rate | i 25 | % | 25 | % | ||||
Effect of different income tax rate in other jurisdictions | i 6 | % | 338 | % | ||||
Effect of non-deductible expenses | i 2 | % | 112 | % | ||||
Effect of temporary differences | ( i 7 | )% | (1,855 | )% | ||||
Effect of valuation of deferred tax allowance | i 19 | % | 1,377 | % | ||||
Effective tax rate | i 45 | % | (3 | )% |
/
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Deferred tax assets (liabilities), net consisted of the following:
June 30, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
Deferred tax assets | ||||||||
Allowance for doubtful loan receivables | - | i 38,870 | ||||||
Allowance on doubtful accounts | i 169,862 | i 190,576 | ||||||
Lease liability | i 29,860 | i 16,375 | ||||||
Net operating loss carrying forward | i 173,118 | i 165,290 | ||||||
Less: valuation allowance | i 173,118 | i 165,290 | ||||||
Total deferred tax assets | $ | i 199,722 | $ | i 245,821 | ||||
Deferred tax liabilities | ||||||||
Right-of-use assets | ( i 25,967 | ) | ( i 9,328 | ) | ||||
Recognition of intangible assets arising from business combination | ( i 629,873 | ) | ( i 780,849 | ) | ||||
Deferred tax liabilities, net | $ | ( i 655,840 | ) | $ | ( i 793,848 | ) |
/
As of June 30, 2022 and December 31, 2021, the Company had net operating loss carryforwards of $ i 692,969 and $ i 562,798, respectively. The net operating loss can be carried forward up to 2025 for PRC entities and can be carried forward for Hong Kong entities indefinitely. The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. Therefore, valuation allowance was recognized against the deferred tax assets based upon management’s assessment as to their realization.
The Company evaluates its valuation allowance requirements at the end of each reporting period by reviewing all available evidence, both positive and negative, and considering whether, based on the weight of that evidence, a valuation allowance is needed. When circumstances cause a change in management’s judgement about the realizability of deferred tax assets, the impact of the change on the valuation allowance is generally reflected in income from operations. The future realization of the tax benefit of an existing deductible temporary difference ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryforward period available under applicable tax law.
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of June 30, 2022 and December 31, 2021, the Company did not have any significant unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit. The Company does not believe that its uncertain tax benefits position will materially change over the next twelve months.
13. EARNINGS (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted loss per common share for the six months ended June 30, 2022 and 2021, respectively:
For the Six Months Ended June 30, |
||||||||
2022 | 2021 | |||||||
(Unaudited) | (Unaudited) | |||||||
Net Income (Loss) Attributable to Roan Holding Group Co., Ltd.’s shareholders | $ | i 322,005 | $ | ( i 527,427 | ) | |||
Weighted average number of ordinary share outstanding | ||||||||
Basic and Diluted* | i 25,287,887 | i 25,287,887 | ||||||
Earnings per share | ||||||||
Net income (loss) per share - Basic and Diluted | $ | i 0.01 | $ | ( i 0.02 | ) |
/
13
Basic income (loss) per share to the ordinary shareholders are computed by dividing the net income (loss) attributable to the ordinary shareholders by the weighted average number of common shares outstanding during the year. Diluted loss per share is the same as basic loss per share due to the lack of dilutive items in the Company for the six months ended June 30, 2022 and 2021. The number of warrants, Class A preferred shares and Class B preferred shares are excluded from the computation as the anti-dilutive effect.
14. RELATED PARTY TRANSACTIONS AND BALANCES
1) | Transactions with related parties |
During the six months ended June 30, 2022, the Company received service fees of $ i 655,227 from Zhongtan Future, and $ i 291,212 from ZhongXin. The Company holds i 10% shares of Zhongtan Future and holds i 22% shares of ZhongXin. Mr. Zhiyong Tang returned $ i 4,616 to the Company to reconcile his advanced payment.
The Company’s subsidiary, Zhejiang Jingyuxin entered into a two-year leasing agreement with Mr. Jialin Zhu, who is a director of Lixin Cayman, to rent an office space at 13 Floor, CCBC Buildings, 666 Shimin Avenue, Shangyu District, Shaoxing city and paid rental expenses of $ i 32,845 for the rental of six months.
There was no related party transaction during the six months ended June 30, 2021.
2) | Balances with related parties |
As of June 30, 2022, the balance of due from related parties of $ i 1,325 was for the advance to Mr. Zhiyong Tang.
As of June 30, 2022, the balance of due to related parties of $ i 123,785 is due to the shareholder, Yuan Shen, who advanced funds from time to time to support the Company’s holding companies’ operations. The balance is interest free and due on demand. The Company’s accounts receivables include the balance due form Zhongtan Future and ZhongXin of $ i 223,944 and $ i 149,296, respectively.
As of December 31, 2021, the balance of due from related parties of $ i 5,941 was for the advance to Mr. Zhiyong Tang.
As of December 31, 2021, the balance of due to related parties of $ i 123,117 consisted of an advanced fund of $ i 119,210 provided by Ms. Yuan Shen, and a payable of $ i 3,907 to Furuikang.
15. REDEEMABLE CONVERTIBLE PREFERRED SHARES
Class A Preferred Share
On July 6, 2016, the Company sold i 715,000 Class A Preferred Shares at a price of $ i 12.00 per Class A Share with an annual dividend of i 8%. The Company received gross proceeds of $ i 8.58 million from this private placement without issuance cost.
The Class A Shares are mandatorily redeemable at a price $ i 12.00 per Class A Share (subject to equitable adjustments for stock splits, stock dividends, recapitalizations and other similar adjustments), plus accrued dividends on the fifth anniversary of the original issue date of the Class A Shares (“Mandatory Conversion Date”). Each Class A Share is convertible into one ordinary share (subject to equitable adjustments for stock splits, stock dividends, recapitalizations and other similar adjustments) at the shareholder’s option after the closing of an initial acquisition by the Company, whether through a merger, share reconstruction or amalgamation, asset or share acquisition, exchangeable share transaction, contractual control arrangement or other similar type of transaction, with an acquiree at fair value (“Business Combination”). The Class A preferred shares are automatically convertible on the date on which the average closing price of the Company’s ordinary shares for three consecutive trading days, is equal to or exceeds $ i 16.00, provided that such date is after the closing of the Business Combination.
14
In the event of a Reorganization Event occurring following the closing of the Business Combination (which includes certain business combinations involving the Company or the Company having confirmed that at least i 80% of the Class A Shares originally issued have elected to been converted at the election of their holders), each Class A Share outstanding immediately prior to such Reorganization Event shall be redeemed by the Company by making a redemption payment equal to the greater of the following (as reasonably determined by the Company’s Board of Directors): (i) an amount in cash equal to the liquidation preference, plus an amount equal to accumulated and unpaid dividends as of (but excluding) the date of the Reorganization Event, per Class A Share that is so redeemed, or (ii) the kind of securities, cash and other property that the holder of the Class A Shares would have been entitled to receive if such holder had converted its Class A Shares into ordinary shares immediately prior to such Reorganization Event.
The Company did not recognize the beneficial conversion feature for the Class A Preferred shares since each Class A Share is convertible into one ordinary share (subject to equitable adjustments for stock splits, stock dividends, recapitalizations and other similar adjustments) at the holder’s option. In accordance with ASC 480, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. ASC 480-10-S99 notes that if a reporting entity issues preferred shares that are conditionally redeemable (e.g., at the holder’s option or upon the occurrence of an uncertain event not solely within the company’s control), the shares are not within the scope of ASC 480 because there is no unconditional obligation to redeem the shares by transferring assets at a specified or determinable date or upon an event certain to occur. If the uncertain event occurs, the condition is resolved, or the event becomes certain to occur, then the shares become mandatorily redeemable under FAS 150 and would require reclassification to a liability. The Class A Preferred Shares have been classified as mezzanine equity in the consolidated financial statement, presented below total liabilities but not included in the subtotal for total equity as of December 31, 2018. The Class A Preferred Share is not deemed to be an embedded derivative instrument to be bifurcated since it’s indexed to its own stock.
In December 2019, the Company’s board approved an amendment to the Memorandum and Articles of Association (“M&A”). Pursuant to the new M&A, each Class A Share is convertible into two ordinary shares (subject to equitable adjustments for stock splits, stock dividends, recapitalizations and other similar adjustments) at the shareholder’s option after the closing of the Business Combination. The Class A preferred shares are automatically convertible on the date on which the average closing price of the Company’s ordinary shares for three consecutive trading days, are equal to or exceeds $ i 6.00, provided that such date is after the closing of the Business Combination.
The new M&A granted the Directors with the rights to convert any or all of the Class A Preferred Shares, in whole or in part, into ordinary shares prior to the Mandatory Conversion Day. In the event of a Reorganization Event occurring following the closing of the Business Combination, the directors also have the rights to convert any or all of the Class A Preferred Shares, in whole or in part, into ordinary shares prior to the Mandatory Conversion Day, or to repurchase or redeem any or all of the Class A Preferred Shares, in whole or in part (but in no event less than one Class A Preferred Share), for a cash amount equal to the value of the Class A Preferred Shares being repurchased or redeemed on an as-converted basis.
With the amendment to the M&A, the redemption of Class A Preferred Shares are no longer solely within the control of the holders of these preferred shares. As the Class A Preferred Shares does not embody an unconditional obligation that requires the Company to redeem the preferred shares by transferring cash or assets, and it does not contain a specific date upon which assets must be transferred. The preferred shares are not considered mandatorily redeemable and are scoped out of ASC 480, Liabilities. In addition, the redemption is not solely controlled by the holders of the preferred shares, it is not required to be classified out of permanent equity. The Class A Preferred Shares were classified as an equity as of June 30, 2022 and December 31, 2021.
The Company did not recognize the beneficial conversion feature for the Class A Preferred shares since each Class A Share is convertible into two ordinary shares (subject to equitable adjustments for stock splits, stock dividends, recapitalizations and other similar adjustments) at either party’s discretion. The Class A Preferred Share is not deemed to be an embedded derivative instrument to be bifurcated since it’s indexed to its own stock.
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As of June 30, 2022 and December 31, 2021, a dividend of $ i 340,379 and $ i 686,400 was accrued for the Convertible Redeemable Class A Preferred Shares and the balance for the Class A Preferred Shares was $ i 12,052,106 and $ i 11,711,727, respectively.
Class B Preferred Share
On December 20, 2019, the Company issued i 291,795,150 shares of Class B Preferred Shares in exchange for i 65.0177% equity interest in Lixin Cayman and its subsidiaries.
The Class B Preferred Shares have the following characteristics with 1) No voting rights at a shareholder meeting or on any resolution of members; 2) No rights to receive any dividends declared on any shares of the Company; 3) Rights of liquidation preference, as follows: in the event of any liquidation, winding-up or dissolution of the Company, whether voluntary or involuntary, each Class B Holders shall be entitled to receive, in priority to the holders of any other class of Shares in the Company, an amount equal to their pro rata share of the Class B Liquidation Preference Amount, which is calculated at an aggregation of RMB i 276 million and liquidation premium of i 8% per annum of RMB i 276 million.
Unless such date is extended by resolution adopted by the Company’s board of directors, the Class B Shares are mandatorily converted into Ordinary Shares of the Company on September 20, 2022, the thirty-three month anniversary of the original issue date of the Class B Shares, at a rate of 1 Ordinary Share per Class B Preferred Share so converted.
In the event of a Reorganization Event occurring prior to such mandatory conversion date, whether through a merger, share reconstruction or amalgamation, asset or share acquisition, exchangeable share transaction, contractual control arrangement or other similar type of transaction, with an acquiree at fair value (“Business Combination”), the directors also have the rights to convert any or all of the Class B Preferred Shares, in whole or in part, into ordinary shares, or to repurchase or redeem any or all of the Class B Preferred Shares, in whole or in part (but in no event less than one Class B Preferred Share), for a cash amount equal to the value of the Class B Preferred Shares being repurchased or redeemed on an as-converted basis.
As the Class B Preferred Shares does not embody an unconditional obligation that requires the Company to redeem the preferred shares by transferring cash or assets, and it does not contain a specific date upon which assets must be transferred. The preferred shares are not considered mandatorily redeemable and are scoped out of ASC 480, Liabilities. In addition, the redemption provisions in the case of a Reorganization are solely at the discretion of the Company. Therefore, the Class B Preferred Shares were classified as an equity as of June 30, 2022 and December 31, 2021.
The Company did not recognize the beneficial conversion feature for the Class B Preferred shares since each Class B Share is convertible into one ordinary share (subject to equitable adjustments for stock splits, stock dividends, recapitalizations and other similar adjustments) at either party’s discretion. The Class B Preferred Share is not deemed to be an embedded derivative instrument to be bifurcated since it’s indexed to its own stock.
On December 22, 2021, the Board of Directors of the Company unanimously passed a resolution to amend the Memorandum and Articles of Association to amend the definition of “Class B Conversion Date” of Class B preferred shares, on which the Class B preferred shares of the Company shall automatically convert into ordinary shares of the Company. Under the Amended M&A, the “Class B Conversion Date” has been extended from two years after the date on which the Class B Preferred Shares were issued to thirty months after such issuance date. On June 20, 2022, the Board of Directors of the Company unanimously passed a resolution to amend the Memorandum and Articles of Association to amend the definition of “Class B Conversion Date” of Class B preferred shares, on which the Class B preferred shares of the Company shall automatically convert into ordinary shares of the Company. Under the Amended M&A, the “Class B Conversion Date” has been extended from thirty months after the date on which the Class B Preferred Shares were issued to thirty-three months after such issuance date. As of the date of this report, there was no share redeemed or converted.
As of June 30, 2022 and December 31, 2021, the balance for Class B Preferred Shares was $ i 31,087,732 and $ i 31,087,732, respectively.
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16. EQUITY
Ordinary share
The Company is authorized to issue unlimited ordinary shares. Holders of the Company’s ordinary shares are entitled to one vote for each share.
On July 6, 2018, the Company and certain institutional investors entered into a securities purchase agreement (“Private Placement”), pursuant to which the Company agreed to sell to such investors an aggregate of 769,232 ordinary shares together with Series A warrants to purchase a total of 576,924 ordinary shares (the “Series A Warrants”), for gross proceeds of approximately $2.0 million. Each investor received a Series A Warrant to purchase a number of shares equal to 75% of the number of ordinary shares the investor purchases in the offering with a warrant term of four (4) years. The purchase price for each ordinary share and the related Series A Warrants is $2.60. The Series A Warrants have an exercise price of $2.60. In connection with the offering, the investors also received Series B warrants with an initial face amount of 200,000 ordinary shares, which are subject to adjustment not in excess of an aggregate of 462,843 ordinary shares (the “Series B Warrants”) for nominal consideration. If on the 30th day after the closing date of the transaction (the “Adjustment Date”), the closing bid price of the Company’s ordinary shares is less than $2.60, the investors shall have the right to exercise the Series B Warrants and the number of ordinary shares to be issued to the investors upon exercise of the Series B Warrants shall be adjusted (upward or downward, as necessary) based on the closing bid price of the Company’s ordinary shares on such date. The closing of the offering took place on July 10, 2018. On August 9, 2018, the closing bid price of the Company’s ordinary shares was $1.29, and thus the Series B Warrant was exercised for 390,579 ordinary shares.
As of June 30, 2022 and December 31, 2021, there were i i i i 25,287,851 / / / ordinary shares issued and outstanding.
Ordinary Shares Held in Escrow
i Upon completion of the business combination between the Company and Adrie, an aggregate of 20 million ordinary shares were issued and 8 million of the issued ordinary shares were deposited in escrow (the “Escrow Shares”). One-third of the Escrow Shares (along with the related accrued dividends and distributions) was released in 2017, and two-thirds of i 8 million escrowed restricted shares were not released.
Preferred Shares
The Company is authorized to issue unlimited preferred shares, in one or more series, with such designations, voting and other rights and preferences as may be determined from time to time by the board of directors. As of June 30, 2022 and December 31, 2021 there were i i i 715,000 / / Class A preferred shares issued and outstanding. As of June 30, 2022 and December 31, 2021, there were i i i i 291,795,150 / / / Class B preferred shares issued and outstanding.
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Warrants
A summary of warrants activity for the six months ended June 30, 2022 and 2021 is as follows:
Number of shares | Weighted average life | Expiration dates | ||||||
Balance of warrants outstanding as of December 31, 2017 | i 9,280,323 | i 4.98 years | i July 6, 2021 | |||||
Grants of Series A Warrants | i 576,924 | i 2.98 years | i July 9, 2022 | |||||
Grants of Placement Agent Warrant | i 46,154 | i 2.98 years | i July 9, 2022 | |||||
Grants of Series B Warrants | i 390,579 | - years | i August 9, 2018 | |||||
Exercise of Series B Warrants | ( i 390,579 | ) | ||||||
Balance of warrants outstanding as of December 31, 2018 | i 9,903,401 | i 2.58 years | * | |||||
Balance of warrants outstanding as of December 31, 2019 | i 9,903,401 | i 1.58 years | * | |||||
Balance of warrants outstanding as of June 30, 2020 (unaudited) | i 9,903,401 | i 1.02 years | ||||||
Balance of warrants outstanding as of December 31, 2020 | i 9,903,401 | i 0.58 years | * | |||||
Expire of Warrants issued in July 6, 2016 | ( i 9,280,323 | ) | ||||||
Balance of warrants outstanding as of December 31, 2021 | i 623,078 | i 0.52 years | i * | |||||
Balance of warrants outstanding as of June 30, 2022 (unaudited) | i 623,078 | i 0.02 years | i * |
/
* | As of June 30, 2022 and December 31, 2021, the Company’s i i 623,078 / shares of warrants were comprised of i i 576,924 / Series A Warrants and i i 46,154 / Placement Agent Warrants which would expire on July 9, 2022, respectively. |
Series A Warrants
In connection with the private placement closed on July 10, 2018, the Company issued Series A warrants to investors to purchase a total of 576,924 ordinary shares with a warrant term of four (4) years. The Series A Warrants have an exercise price of $2.60 per share. On January 9, 2019, the Board of the Company approved a downward adjustment of the exercise price from $2.60 to $1.18.
The Series A Warrants have customary anti-dilution protections including a “full ratchet” anti-dilution adjustment provision which are triggered in the event the Company sells or grants any additional shares of common stock, options, warrants or other securities that are convertible into common stock at a price lower than $ i 2.60 per share. The anti-dilution adjustment provision is not triggered by certain “exempt issuances” which among other issuances, includes the issuance of shares of common stock, options or other securities to officers, employees, directors, consultants or service providers.
Based on an evaluation as discussed in FASB ASC 815-15, “Embedded Derivatives” and FASB ASC 815-40-15, “Contracts in Entity’s Own Equity – Scope and Scope Exceptions,” the Company determined that the Series A Warrants were not considered indexed to its own stock because neither the occurrence of a sale of equity securities by the issuer at market nor the issuance of another equity contract with a lower strike price is an input to the fair value of a fixed-for-fixed option or forward on equity shares. As such, the Series A Warrants were classified as a liability. Liability classification requires the warrant to be re-measured to their fair value for each reporting period.
As of July 10, 2018, December 31, 2021 and June 30, 2022, the Company estimated fair value of the Series A Warrants at $ i 1,202,310, $ i 12,500 and $nil, respectively, using the Black-Scholes valuation model, which took into consideration the underlying price of ordinary shares, a risk-free interest rate, expected term and expected volatility. As a result, the valuation of the warrant was categorized as Level 3 in accordance with ASC 820, “Fair Value Measurement”.
On the July 10, 2018, December 31, 2021 and June 30, 2022, the Company estimated the fair value of Series A Warrants using the following assumptions:
On July 10, 2018 |
On December 31, 2021 |
On June 30, 2022 |
||||||||||
Terms of warrants | i 48 months | i 12 months | 9 days | |||||||||
Exercise price | i 2.60 | i 1.18 | i 1.18 | |||||||||
Risk free rate of interest | i 2.77 | % | i 0.16 | % | i 0.04 | % | ||||||
Dividend yield | i 0.00 | % | i 0.00 | % | i 0.00 | % | ||||||
Annualized volatility of underlying stock | i 2.03 | i 2.19 | i 2.19 |
/
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Series B Warrants
In connection with the private placement closed on July 10, 2018, the investors also received Series B warrants with an initial face amount of 200,000 ordinary shares, which are subject to adjustment not in excess of an aggregate of 462,843 ordinary shares (the “Series B Warrants”) for nominal consideration. If on the 30th day after the closing date of the transaction (the “Adjustment Date”), the closing bid price of the Company’s ordinary shares is less than $2.60, the investors shall have the right to exercise the Series B Warrants and the number of ordinary shares to be issued to the investors upon exercise of the Series B Warrants shall be adjusted (upward or downward, as necessary) based on the closing bid price of the Company’s ordinary shares on such date.
Based on an evaluation as discussed in FASB ASC 815-40-15, “Contracts in Entity’s Own Equity – Scope and Scope Exceptions,” the Company determined that the Series B Warrants were not considered indexed to its own stock because the settlement amount does not equal the difference between the fair value of a fixed number of the Company’s shares and a fixed strike price. Liability classification requires the warrant to be re-measured to their fair value for each reporting period.
Placement Agent Warrants
On April 6, 2018, the Company entered into a letter agreement with FT Global Capital, Inc., as exclusive placement agent (the “Placement Agent”), pursuant to which the Placement Agent agreed to act as our placement agent on a best efforts basis in connection with the above offering. In addition to the cash payments, the Company also agreed to issue to the Placement Agent a warrant to purchase a number of ordinary shares equal to i 6.0% of the aggregate number of ordinary shares sold in this offering. This warrant will have the same term as Series A Warrants, including exercise price, vesting period, anti-dilution terms and etc. As such, the same as the classification of the Series A Warrants, the Placement Agent Warrants were classified as a liability, which requires the warrant to be re-measured to their fair value for each reporting period.
As of July 10, 2018, December 31, 2021 and June 30, 2022, the Company estimated fair value of the Placement Agent Warrants at $ i 96,185, $ i 1,259 and $nil, respectively, using the Black-Scholes valuation model. The assumptions used to estimate the fair value of the warrants were the same as those used for Series A Warrants.
Allocation of Issuance Costs
In connection with the Private Placement closed on July 10, 2018, the Company incurred direct and incremental issuance costs of $ i 310,000. These costs were allocated to common stock, Series A Warrants and Series B Warrants in proportion to the allocation of proceeds. The issuance costs allocated to common stock were accounted for as a reduction of proceeds of the common stocks, while the issuance costs allocated to warrants were accounted for as non-operating expenses.
Statutory reserve
The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations and after it has met the PRC requirements for appropriation to statutory reserves. Paid in capital of the PRC subsidiaries included in the Company’s consolidated net assets are also non-distributable for dividend purposes. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of PRC subsidiaries. i The Company is required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, the Company may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.
As of June 30, 2022 and December 31, 2021, the Company had a statutory reserve of $ i 362,797 and $ i 362,797, respectively.
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17. SEGMENT REPORTING
In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different services. For the six months ended June 30, 2021 and 2020, the Company has i i two / operating business lines, including business conducted by Adrie and its subsidiaries, primarily management and assessment services, factoring business and industrial operation service, and business conducted by Lixin Cayman and its subsidiaries, primarily financial guarantee and consulting services. Based on management’s assessment, the Company has determined that the two operating business lines are two operating segments as defined by ASC 280.
The following table presents summary information by segment for the six months ended June 30, 2022 and 2021, respectively:
For the Year Ended June 30, 2022 | ||||||||||||||||
Business conducted by Adrie and its subsidiaries | Business conducted by Lixin Cayman and its subsidiaries | Elimination | Total | |||||||||||||
Net revenues of services | $ | i 928,468 | $ | i 329,397 | $ | (138,621 | ) | $ | 1,119,244 | |||||||
Commission and fee income on guarantee services, net | - | i 436,561 | (55,012 | ) | 381,549 | |||||||||||
Total interest and fee income | i 372,445 | i 918,585 | 1,291,030 | |||||||||||||
Net (loss) income from operation | $ | i 193,255 | $ | i 772,434 | $ | - | $ | 965,689 | ||||||||
Depreciation and amortization | $ | i 467,400 | $ | i 62,660 | $ | - | $ | 530,060 | ||||||||
Capital expenditures | $ | - | $ | - | $ | - | $ | - | ||||||||
Income tax recovery (expense) | $ | ( i 119,869 | ) | $ | ( i 226,512 | ) | $ | - | $ | (346,381 | ) | |||||
Segment (loss) profit from continuing operations | $ | ( i 66,008 | ) | $ | i 629,380 | $ | - | $ | 563,372 | |||||||
Segment assets as of June 30, 2022 | $ | i 10,913,204 | $ | i 54,524,207 | $ | (771,743 | ) | $ | 64,665,668 |
/
For the Six Months Ended (Unaudited) | ||||||||||||
Business conducted by Adrie and its subsidiaries | Business conducted by Lixin Cayman and its subsidiaries | Total | ||||||||||
Net revenues of services | $ | i 681 | $ | i 330,107 | $ | i 330,788 | ||||||
Commission and fee income on guarantee services, net | i 369 | i 175,965 | i 176,334 | |||||||||
Total interest and fee income | i 423,692 | i 840,347 | i 1,270,039 | |||||||||
Net loss from operation | $ | ( i 305,055 | ) | $ | ( i 23,904 | ) | $ | ( i 328,959 | ) | |||
Depreciation and amortization | $ | ( i 135 | ) | $ | ( i 539,192 | ) | $ | ( i 539,327 | ) | |||
Income tax (expenses) benefits | $ | i 66,112 | $ | ( i 53,044 | ) | $ | i 13,068 | |||||
Segment loss | $ | ( i 386,275 | ) | $ | ( i 74,122 | ) | $ | ( i 460,397 | ) | |||
Segment assets as of June 30, 2021 | $ | i 10,763,084 | $ | i 54,080,420 | $ | i 64,843,504 |
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18. COMMITMENTS AND CONTINGENCIES
Contingencies
From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.
Lease commitments
As of June 30, 2022, the Company leases offices space under a number of non-cancellable operating lease arrangements, one of which had a term of over 12 months. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for operating lease is recognized on a straight-line basis over the lease term.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
In calculating the initial values of right of use assets and liabilities at inception date, the Company uses the rate implicit in the lease, when available or readily determinable, to discount lease payments to present value. When the leases do not provide a readily determinable implicit rate, the Company discount lease payments based on an estimate of its incremental borrowing rate.
The table below presents the operating lease related assets and liabilities recorded on the balance sheets.
June 30, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
Right of use assets | $ | i 103,801 | $ | i 37,313 | ||||
Operating lease liabilities, current portion | $ | i 58,269 | $ | i 65,498 | ||||
Operating lease liabilities, noncurrent portion | i 61,172 | - | ||||||
Total operating lease liabilities | $ | i 119,441 | $ | i 65,498 |
/
As of June 30, 2022, the weighted average remaining lease term was i 1.75 years, and discount rates were i 4.75% for the operating lease.
As of December 31, 2021, the weighted average remaining lease term was i 0.33 years, and discount rates were i 4.75% for the operating lease.
Rental expense for the six months ended June 30, 2022 and 2021 was $ i 59,287 and $84,344, respectively. Depreciation expenses were $ i 49,733 and $ i 62,356 million for the six month ended June 30, 2022 and 2021, respectively.
The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2022:
Twelve months ended June 30, 2023 | $ | i 62,562 | ||
Twelve months ended June 30, 2024 | i 62,562 | |||
Total lease payments | i 125,124 | |||
Less: imputed interest | i 5,683 | |||
Present value of lease liabilities | $ | i 119,441 |
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19. SUBSEQUENT EVENTS
The Company performed a review of events subsequent to the balance sheet date through the date the financial statements were issued and determined that there were no such events requiring recognition or disclosure in the financial statements other than the above mentioned events.
On July 7, 2022, the Board of directors passed a resolution to terminate the cooperation agreement with Shenzhen Geile Information Technology Co., Ltd. (formerly called “Shenzhen Harvest Business Ltd., Co.”) and dissolve FINE C+ Digital. On the same day, the Board of directors passed a resolution to terminate the cooperation agreement with Beijing Auvgo International Travel Technology Co. Ltd. and dissolve Yijia Travel. The Company had not made any investment in these two joint ventures and these joint ventures had no operations.
i On July 19, 2022, Zhongtan Industrial Operation invested RMB 30 million (approximately $4,630,273) in Hangzhou Zhongtan New Energy Enterprise Management Partnership (Limited Partnership) and held 60% its equity. The investment has not been paid as of the date of this report.
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This ‘6-K’ Filing | Date | Other Filings | ||
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Filed on: | 8/24/22 | |||
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7/7/22 | 6-K | |||
For Period end: | 6/30/22 | |||
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6/20/22 | ||||
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12/31/21 | 20-F | |||
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9/30/21 | 6-K | |||
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6/30/21 | 6-K/A | |||
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12/31/20 | 20-F, NT 20-F | |||
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1/8/20 | 6-K | |||
12/31/19 | 20-F, 6-K, NT 20-F | |||
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1/9/19 | 6-K/A | |||
12/31/18 | 20-F | |||
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7/10/18 | 6-K | |||
7/6/18 | 424B5, 6-K | |||
4/6/18 | ||||
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12/31/17 | 20-F | |||
12/21/17 | EFFECT | |||
12/19/17 | ||||
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3/21/17 | 6-K | |||
12/19/16 | 8-K | |||
7/6/16 | 25-NSE, 3, 8-K | |||
7/3/15 | ||||
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11/19/14 | ||||
4/8/14 | ||||
1/5/13 | ||||
List all Filings |