Correspondence 0001213900-23-020530 from MingZhu Logistics Holdings Ltd (YGMZF)
MingZhu Logistics Holdings Ltd
Date: March 16, 2023 · CIK: 0001782037 · Accession: 0001213900-23-020530
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-39564
Referenced dates: March 9, 2023
Letter
Division of Corporation Finance Office of Energy & Transportation Attention: Mr. Mr. Brian McAllister, Amendment No. 4 to Form 20-F for the fiscal year ended December 31, 2021 filed March 3, 2023 Response dated March 3, 2023 File No. 001-39564
Dear Mr. McAllister and Mr. Rajan:
On behalf of our client, MingZhu Logistics Holdings Limited (the “Company”), we submit to the staff (the “Staff”) of the Securities and Exchanges Commission (the “Commission”) this letter setting forth the Company’s responses and proposed changes to the comments contained in the Staff’s letter dated March 9, 2023 on the Company’s Amendment No. 4 to Form 20-F for the fiscal year ended December 31, 2021 submitted on March 3, 2022.
The Company plans to submit its Amendment No. 5 to Form 20-F (the “Revised Form 20-F”) with exhibits via EDGAR to the Commission after the Staff finishes the review of the proposed changes as set forth in this correspondence.
The Staff’s comments are repeated below in bold and are followed by the Company’s responses. We have included page references in the Revised Form 20-F where the language addressing a particular comment appears. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Revised Form 20-F.
Amendment No. 4 to Form 20-F for the fiscal year ended December 31, 2021
Financial Statements
Notes to Consolidated Financial Statements
Note 2 - Restatement of Previously Issued Financial Statements, page F-9
1. We note your revised disclosures and restatements in response to prior comment 2. We note your revised valuation of 3,189,000 ordinary shares issued in the acquisition of Cheyi BVI as purchase consideration was based on the quoted trading price of $2.12 per share on the date of acquisition. However, it appears you have recorded the revisions in purchase consideration arising from changes in the valuation of shares issued by reducing other payables and accrued liabilities rather than in the statement of changes in shareholders' equity. Please revise your financial statements and disclosures as appropriate or advise. In addition, please revise the total amount purchase consideration disclosed in notes 1, 12 and 20.
Response: In response to the Staff’s comments, the Company plan to revise the disclosure in the Revised Form 20-F as below:
Page 46:
Pursuant to the agreement, the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of $29,466,032 $23,470,712, consisting of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company’s ordinary shares (representing $12,756,000 $6,760,680 with $4.00 $2.12 per ordinary share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment of $5,884,013 if Cheyi BVI’s audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000 respectively. The two earnout payments are due 13 months upon the delivery of Cheyi BVI’s audited financial statements.
Page 91:
As of December 31, 2021
The
Company
WFOE
Directly
owned PRC
subsidiaries
Other
subsidiaries
VIEs
Eliminations
Total
Cash and restricted cash
$ 3,079,046
$ -
$ 430,878
$ 765,128
$ 1,477,065
$ -
$ 5,752,117
Intercompany receivables
$ 14,083,531
$ -
$ -
$ 8,852,220
$ -
$ (22,935,751 )
$ -
Total current assets
$ 17,162,577
$ -
$ 28,734,263
$ 9,617,348
$ 7,030,714
$ (22,935,751 )
$ 39,609,151
Investments in subsidiaries and VIEs
$ 23,470,712
$ 9,313,142
$ -
$ 5,516,783
$ -
$ (38,300,637 )
$ -
Total non-current assets
$ 32,970,712
$ 9,313,142
$ 2,511,855
$ 5,516,783
$ 10,576,090
$ (24,143,067 )
$ 36,745,515
Total assets
$ 50,133,289
$ 9,313,142
$ 31,246,118
$ 15,134,131
$ 17,606,804
$ (47,078,818 )
$ 76,354,666
Total liabilities
$
9,165,615
15,160,935
$ -
$ 19,566,067
$ 14,692,288
$ 8,293,662
$ (23,031,900 )
$
28,685,732
34,681,052
Total shareholders’ equity
$
40,967,674
34,972,354
$ 9,313,142
$ 11,680,051
$ 441,843
$ 9,313,142
$ (24,046,918 )
$
47,668,934
41,673,614
Total liabilities and shareholders’ equity
$ 50,133,289
$ 9,313,142
$ 31,246,118
$ 15,134,131
$ 17,606,804
$ (47,078,818 )
$ 76,354,666
Page 95:
Pursuant to the agreement, the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of $29,466,032 $23,470,712, consisting of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company’s ordinary shares (representing $12,756,000 $6,760,680 with $4.00 $2.12 per ordinary share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment of $5,884,013 if Cheyi BVI’s audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000 respectively. The two earnout payments are due 13 months upon the delivery of Cheyi BVI’s audited financial statements.
Page 110:
For the year ended December 31, 2021, we had a cash flow used in operating activities of $23,784,162 as compared to a cash used in operating activities of $890,209 for the year ended December 31, 2020. As of December 31, 2021, and 2020, we had cash of $5,752,117 and $11,605,625, respectively, and our working capital was $11,303,470 $5,308,150 and $17,696,726, respectively. The decrease of $6,393,256 $12,388,576 in working capital was mainly due to the acquisition completed and the business cooperation during year 2021.
Page 137:
Pursuant to the agreement, the total consideration for the acquisition of 100% equity ownership of Cheyi BVI was an aggregate of $29,466,032 $23,470,712, consisting of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company’s ordinary shares (representing $12,756,000 $6,760,680 with $4.00 $2.12 per ordinary share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment of $5,884,013 if Cheyi BVI’s audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000 respectively. The two earnout payments are due 13 months upon the delivery of Cheyi BVI’s audited financial statements.
Page F-4:
As of
December 31,
As of
December 31,
USD
USD
Restatement
Reclassification
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 5,752,117
$ 2,105,625
Restricted cash
-
9,500,000
Accounts receivable, net
3,650,005
5,343,716
Prepayments
5,473,938
1,059,335
Other receivables
1,540,044
31,082
Loans receivable
22,487,767
11,416,940
Amount due from related parties
705,280
741,340
Total current assets
39,609,151
30,198,038
NON-CURRENT ASSET
Property and equipment, net
12,224,582
3,448,109
Deferred tax assets
35,491
31,852
Deposits
10,327,872
261,992
Goodwill
14,157,570
-
Total non-current asset
36,745,515
3,741,953
Total assets
$ 76,354,666
$ 33,939,991
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term bank borrowings
$ 7,579,324
$ 6,551,724
Accounts payable
1,344,532
1,415,591
Other payables and accrued liabilities
13,273,804
19,269,124
531,120
Amount due to related parties
294,344
993,846
Tax payable
3,133,294
2,722,409
Current maturities of long-term bank borrowings
269,009
-
Current portion of capital lease and financing obligations
2,267,248
51,135
Current maturities of loans from other financial institutions
144,126
235,487
Total current liabilities
28,305,681
34,301,001
12,501,312
NON-CURRENT LIABILITIES
Long-term bank borrowings
179,339
-
Long-term loans from other financial institutions
-
136,400
Long-term portion of capital lease and financing obligations
200,712
27,989
Total non-current liabilities
380,051
164,389
Total liabilities
28,685,732
34,681,052
12,665,701
SHAREHOLDERS’ EQUITY
Ordinary shares: $0.001 par value, 50,000,000 shares authorized, 19,134,277 and 12,354,040 shares issued and outstanding as of December 31, 2021 and 2020, respectively*
19,134
12,354
Share subscription receivables
(847,086 )
(847,086 )
Additional paid-in capital
41,792,071
35,796,751
13,824,820
Statutory reserves
916,148
877,886
Retained earnings
5,929,043
6,905,718
Accumulated other comprehensive (loss) income
(140,376 )
500,598
Total shareholders’ equity
47,668,934
41,673,614
21,274,290
Total liabilities and shareholders’ equity
$ 76,354,666
$ 33,939,991
Page F-6:
Shares*
Amount
Share Subscription
Receivables
Additional Paid-in
Capital
Statutory
Reserve
Retained Earnings
Accumulated Other Comprehensive (Loss)
Income
Total
USD
USD
USD
USD
USD
USD
USD
BALANCE, January 1, 2019
9,000,000
$ 9,000
$ (847,086 )
$ 4,115,638
$ 537,874
$ 4,820,640
$ (131,035 )
$ 8,505,031
Net income for the year
-
-
-
-
-
1,642,794
-
1,642,794
Foreign currency translation adjustment
-
-
-
-
-
-
(121,195 )
(121,195 )
Appropriation to statutory reserves
-
-
-
-
222,601
(222,601 )
-
-
BALANCE, December 31, 2019
9,000,000
$ 9,000
$ (847,086 )
$ 4,115,638
$ 760,475
$ 6,240,833
$ (252,230 )
$ 10,026,630
Issuance of shares through initial public offering
3,354,040
3,354
-
10,955,449
-
-
-
10,958,803
Capitalization of listing expenses
-
-
-
(1,246,267 )
-
-
-
(1,246,267 )
Net income for the year
-
-
-
-
-
782,296
-
782,296
Foreign currency translation adjustment
-
-
-
-
-
-
752,828
752,828
Appropriation to statutory reserves
-
-
-
-
117,411
(117,411 )
-
-
BALANCE, December 31, 2020
12,354,040
$ 12,354
$ (847,086 )
$ 13,824,820
$ 877,886
$ 6,905,718
$ 500,598
$ 21,274,290
Issuance of shares
6,780,237
6,780
-
27,967,251
21,971,931
-
-
-
27,974,031
21,978,711
Net (loss) for the year
-
-
-
-
-
(938,413 )
-
(938,413 )
Foreign currency translation adjustment
-
-
-
-
-
-
(640,974 )
(640,974 )
Appropriation to statutory reserves
-
-
-
-
38,262
(38,262 )
-
-
BALANCE, December 31, 2021
19,134,277
$ 19,134
$ (847,086 )
$
41,792,071
35,796,751
$ 916,148
$ 5,929,043
$ (140,376 )
$
47,668,934
41,673,614
Page F-9
On December 29, 2021 (“Acquisition Date”), the Company entered into a Share Purchase Agreement (the “SPA”) to acquire 100% of the equity interest of Cheyi (BVI) Limited (the “Cheyi BVI”) which operates its business through its subsidiary Zhejiang Cheyi Network Technology Co., Ltd. (the “Cheyi Network”), an integrated online car-hailing and driver management services company. Pursuant to the agreement, the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of U.S. $29,466,032 $23,470,712, consisting of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 fully paid Company’s ordinary shares (being U.S. $12,756,000 $6,760,680 of $4 $2.12 per share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of U.S. $8,826,019 and Year-2022 earnout payment of U.S. $5,884,013 if the Cheyi BVI’s audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000 respectively. The two earnout payments are due 13 months upon the delivery of Cheyi BVI’s audited financial statements.
As of December 31, 2021
As Previously
Reported
Restatement
Adjustment
As Restated
Balance Sheet
Goodwill
$ 20,152,890
$ (5,995,320 )
$ 14,157,570
Total non-current asset
42,740,835
(5,995,320 )
36,745,515
Total assets
$ 82,349,986
$ (5,995,320 )
$ 76,354,666
Other payables and accrued liabilities
Additional paid-in capital
$
19,269,124
41,792,071
$ (5,995,320 )
$
13,273,804
35,796,751
Total current liabilities
Total shareholders’ equity
$
34,681,052
47,668,934
$ (5,995,320 )
$
28,685,732
41,673,614
Page F-20:
On December 29, 2021 (the “Acquisition Date”), the Company entered into a Share Purchase Agreement (the “SPA”) to acquire 100% of the equity interest of Cheyi (BVI) Limited (the “Cheyi BVI”) which operates its business through its subsidiary Zhejiang CheYi Network Technology Co., Ltd. (the “CheYi Network”), an integrated online car-hailing and driver management services company. Pursuant to the agreement, the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of $29,466,032 $23,470,712, consisting of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 fully paid Company’s ordinary shares (being $12,756,000 $6,760,680 of $4 $2.12 per share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment of $5,884,013 if the Cheyi BVI’s audited net income for its fiscal year 2021 and 2022 is no less than $3,000,000 respectively. The two earnout payments are due 13 months upon the delivery of Cheyi BVI’s audited financial statements.
December 31,
December 31,
Other payables and accrued liabilities
Rental deposits
$ 220,416
$ 215,268
Salary payables
157,970
127,610
Others
44,053
110,540
Receipt in advance
153,399
77,702
Payable under acquisition
10,714,712
16,710,032
-
Advance for operational purpose
286,820
-
Lending with no interests
1,220,176
-
Deposits for purchase of vehicles
476,258
Show Raw Text
CORRESP
1
filename1.htm
Bill Huo
Becker & Poliakoff, LLP
45 Broadway, 17th Floor
New York, New York 10006
Email: bhuo@beckerlawyers.com
Phone: (212) 599-3322 Fax: (212) 557-0295
March 16, 2023
VIA EDGAR
Division of Corporation Finance
Office of Energy & Transportation
450 Fifth Street N.W.
Washington, DC 20549
Attention: Mr. Mr. Brian
McAllister,
Mr. Raj Rajan
Re:
MingZhu Logistics Holdings Limited
Amendment No. 4 to Form 20-F for the fiscal year ended
December 31, 2021
filed March 3, 2023
Response dated March 3, 2023
File No. 001-39564
Dear Mr. McAllister and Mr. Rajan:
On behalf of our client, MingZhu Logistics Holdings
Limited (the “Company”), we submit to the staff (the “Staff”) of the Securities and Exchanges Commission (the
“Commission”) this letter setting forth the Company’s responses and proposed changes to the comments contained in the
Staff’s letter dated March 9, 2023 on the Company’s Amendment No. 4 to Form 20-F for the fiscal year ended December 31, 2021
submitted on March 3, 2022.
The Company plans to submit its Amendment No.
5 to Form 20-F (the “Revised Form 20-F”) with exhibits via EDGAR to the Commission after the Staff finishes the review of
the proposed changes as set forth in this correspondence.
The Staff’s comments are repeated below
in bold and are followed by the Company’s responses. We have included page references in the Revised Form 20-F where the language
addressing a particular comment appears. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Revised
Form 20-F.
Amendment No. 4 to Form 20-F for the fiscal
year ended December 31, 2021
Financial Statements
Notes to Consolidated Financial Statements
Note 2 - Restatement of Previously Issued Financial
Statements, page F-9
1.
We note your revised disclosures and restatements in response to prior comment 2. We note your revised valuation of 3,189,000 ordinary shares issued in the acquisition of Cheyi BVI as purchase consideration was based on the quoted trading price of $2.12 per share on the date of acquisition. However, it appears you have recorded the revisions in purchase consideration arising from changes in the valuation of shares issued by reducing other payables and accrued liabilities rather than in the statement of changes in shareholders' equity. Please revise your financial statements and disclosures as appropriate or advise. In addition, please revise the total amount purchase consideration disclosed in notes 1, 12 and 20.
Response: In response to the Staff’s comments,
the Company plan to revise the disclosure in the Revised Form 20-F as below:
Page 46:
Pursuant to the agreement,
the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of $29,466,032 $23,470,712,
consisting of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company’s ordinary shares (representing
$12,756,000 $6,760,680 with $4.00 $2.12 per ordinary share) and payment of $2,000,000 at closing, and
Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment of $5,884,013 if Cheyi BVI’s audited net income for its fiscal
year 2021 and 2022 is no less than U.S. $3,000,000 respectively. The two earnout payments are due 13 months upon the delivery of Cheyi
BVI’s audited financial statements.
Page 91:
As of December 31, 2021
The
Company
WFOE
Directly
owned PRC
subsidiaries
Other
subsidiaries
VIEs
Eliminations
Total
Cash and restricted cash
$
3,079,046
$
-
$
430,878
$
765,128
$
1,477,065
$
-
$
5,752,117
Intercompany receivables
$
14,083,531
$
-
$
-
$
8,852,220
$
-
$
(22,935,751
)
$
-
Total current assets
$
17,162,577
$
-
$
28,734,263
$
9,617,348
$
7,030,714
$
(22,935,751
)
$
39,609,151
Investments in subsidiaries and VIEs
$
23,470,712
$
9,313,142
$
-
$
5,516,783
$
-
$
(38,300,637
)
$
-
Total non-current assets
$
32,970,712
$
9,313,142
$
2,511,855
$
5,516,783
$
10,576,090
$
(24,143,067
)
$
36,745,515
Total assets
$
50,133,289
$
9,313,142
$
31,246,118
$
15,134,131
$
17,606,804
$
(47,078,818
)
$
76,354,666
Total liabilities
$
9,165,615
15,160,935
$
-
$
19,566,067
$
14,692,288
$
8,293,662
$
(23,031,900
)
$
28,685,732
34,681,052
Total shareholders’ equity
$
40,967,674
34,972,354
$
9,313,142
$
11,680,051
$
441,843
$
9,313,142
$
(24,046,918
)
$
47,668,934
41,673,614
Total liabilities and shareholders’ equity
$
50,133,289
$
9,313,142
$
31,246,118
$
15,134,131
$
17,606,804
$
(47,078,818
)
$
76,354,666
Page 95:
Pursuant to the agreement,
the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of $29,466,032 $23,470,712,
consisting of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company’s ordinary shares (representing
$12,756,000 $6,760,680 with $4.00 $2.12 per ordinary share) and payment of $2,000,000 at closing, and
Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment of $5,884,013 if Cheyi BVI’s audited net income for its fiscal
year 2021 and 2022 is no less than U.S. $3,000,000 respectively. The two earnout payments are due 13 months upon the delivery of Cheyi
BVI’s audited financial statements.
Page 110:
For the year ended December
31, 2021, we had a cash flow used in operating activities of $23,784,162 as compared to a cash used in operating activities of $890,209
for the year ended December 31, 2020. As of December 31, 2021, and 2020, we had cash of $5,752,117 and $11,605,625, respectively, and
our working capital was $11,303,470 $5,308,150 and $17,696,726, respectively. The decrease of $6,393,256
$12,388,576 in working capital was mainly due to the acquisition completed and the business cooperation during year 2021.
Page 137:
Pursuant to the agreement,
the total consideration for the acquisition of 100% equity ownership of Cheyi BVI was an aggregate of $29,466,032 $23,470,712,
consisting of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company’s ordinary shares (representing
$12,756,000 $6,760,680 with $4.00 $2.12 per ordinary share) and payment of $2,000,000 at closing, and
Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment of $5,884,013 if Cheyi BVI’s audited net income for its fiscal
year 2021 and 2022 is no less than U.S. $3,000,000 respectively. The two earnout payments are due 13 months upon the delivery of Cheyi
BVI’s audited financial statements.
2
Page F-4:
As of
December 31,
2021
As of
December 31,
2020
USD
USD
Restatement
Reclassification
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
5,752,117
$
2,105,625
Restricted cash
-
9,500,000
Accounts receivable, net
3,650,005
5,343,716
Prepayments
5,473,938
1,059,335
Other receivables
1,540,044
31,082
Loans receivable
22,487,767
11,416,940
Amount due from related parties
705,280
741,340
Total current assets
39,609,151
30,198,038
NON-CURRENT ASSET
Property and equipment, net
12,224,582
3,448,109
Deferred tax assets
35,491
31,852
Deposits
10,327,872
261,992
Goodwill
14,157,570
-
Total non-current asset
36,745,515
3,741,953
Total assets
$
76,354,666
$
33,939,991
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term bank borrowings
$
7,579,324
$
6,551,724
Accounts payable
1,344,532
1,415,591
Other payables and accrued liabilities
13,273,804
19,269,124
531,120
Amount due to related parties
294,344
993,846
Tax payable
3,133,294
2,722,409
Current maturities of long-term bank borrowings
269,009
-
Current portion of capital lease and financing obligations
2,267,248
51,135
Current maturities of loans from other financial institutions
144,126
235,487
Total current liabilities
28,305,681
34,301,001
12,501,312
NON-CURRENT LIABILITIES
Long-term bank borrowings
179,339
-
Long-term loans from other financial institutions
-
136,400
Long-term portion of capital lease and financing obligations
200,712
27,989
Total non-current liabilities
380,051
164,389
Total liabilities
28,685,732
34,681,052
12,665,701
SHAREHOLDERS’ EQUITY
Ordinary shares: $0.001 par value, 50,000,000 shares authorized, 19,134,277 and 12,354,040 shares issued and outstanding as of December 31, 2021 and 2020, respectively*
19,134
12,354
Share subscription receivables
(847,086
)
(847,086
)
Additional paid-in capital
41,792,071
35,796,751
13,824,820
Statutory reserves
916,148
877,886
Retained earnings
5,929,043
6,905,718
Accumulated other comprehensive (loss) income
(140,376
)
500,598
Total shareholders’ equity
47,668,934
41,673,614
21,274,290
Total liabilities and shareholders’ equity
$
76,354,666
$
33,939,991
3
Page F-6:
Shares*
Amount
Share Subscription
Receivables
Additional Paid-in
Capital
Statutory
Reserve
Retained Earnings
Accumulated Other Comprehensive (Loss)
Income
Total
USD
USD
USD
USD
USD
USD
USD
BALANCE, January 1, 2019
9,000,000
$
9,000
$
(847,086
)
$
4,115,638
$
537,874
$
4,820,640
$
(131,035
)
$
8,505,031
Net income for the year
-
-
-
-
-
1,642,794
-
1,642,794
Foreign currency translation adjustment
-
-
-
-
-
-
(121,195
)
(121,195
)
Appropriation to statutory reserves
-
-
-
-
222,601
(222,601
)
-
-
BALANCE, December 31, 2019
9,000,000
$
9,000
$
(847,086
)
$
4,115,638
$
760,475
$
6,240,833
$
(252,230
)
$
10,026,630
Issuance of shares through initial public offering
3,354,040
3,354
-
10,955,449
-
-
-
10,958,803
Capitalization of listing expenses
-
-
-
(1,246,267
)
-
-
-
(1,246,267
)
Net income for the year
-
-
-
-
-
782,296
-
782,296
Foreign currency translation adjustment
-
-
-
-
-
-
752,828
752,828
Appropriation to statutory reserves
-
-
-
-
117,411
(117,411
)
-
-
BALANCE, December 31, 2020
12,354,040
$
12,354
$
(847,086
)
$
13,824,820
$
877,886
$
6,905,718
$
500,598
$
21,274,290
Issuance of shares
6,780,237
6,780
-
27,967,251
21,971,931
-
-
-
27,974,031
21,978,711
Net (loss) for the year
-
-
-
-
-
(938,413
)
-
(938,413
)
Foreign currency translation adjustment
-
-
-
-
-
-
(640,974
)
(640,974
)
Appropriation to statutory reserves
-
-
-
-
38,262
(38,262
)
-
-
BALANCE, December 31, 2021
19,134,277
$
19,134
$
(847,086
)
$
41,792,071
35,796,751
$
916,148
$
5,929,043
$
(140,376
)
$
47,668,934
41,673,614
4
Page F-9
On December 29, 2021 (“Acquisition
Date”), the Company entered into a Share Purchase Agreement (the “SPA”) to acquire 100% of the equity interest of Cheyi
(BVI) Limited (the “Cheyi BVI”) which operates its business through its subsidiary Zhejiang Cheyi Network Technology Co.,
Ltd. (the “Cheyi Network”), an integrated online car-hailing and driver management services company. Pursuant to the agreement,
the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of U.S. $29,466,032
$23,470,712, consisting of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 fully paid Company’s
ordinary shares (being U.S. $12,756,000 $6,760,680 of $4 $2.12 per share) and payment of $2,000,000
at closing, and Year-2021 earnout payment of U.S. $8,826,019 and Year-2022 earnout payment of U.S. $5,884,013 if the Cheyi BVI’s
audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000 respectively. The two earnout payments are due 13
months upon the delivery of Cheyi BVI’s audited financial statements.
As of December 31, 2021
As Previously
Reported
Restatement
Adjustment
As Restated
Balance Sheet
Goodwill
$
20,152,890
$
(5,995,320
)
$
14,157,570
Total non-current asset
42,740,835
(5,995,320
)
36,745,515
Total assets
$
82,349,986
$
(5,995,320
)
$
76,354,666
Other payables and accrued liabilities
Additional paid-in capital
$
19,269,124
41,792,071
$
(5,995,320
)
$
13,273,804
35,796,751
Total current liabilities
Total shareholders’ equity
$
34,681,052
47,668,934
$
(5,995,320
)
$
28,685,732
41,673,614
Page F-20:
On December 29, 2021 (the “Acquisition
Date”), the Company entered into a Share Purchase Agreement (the “SPA”) to acquire 100% of the equity interest of Cheyi
(BVI) Limited (the “Cheyi BVI”) which operates its business through its subsidiary Zhejiang CheYi Network Technology Co.,
Ltd. (the “CheYi Network”), an integrated online car-hailing and driver management services company. Pursuant to the agreement,
the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of $29,466,032 $23,470,712,
consisting of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 fully paid Company’s ordinary
shares (being $12,756,000 $6,760,680 of $4 $2.12 per share) and payment of $2,000,000 at closing, and
Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment of $5,884,013 if the Cheyi BVI’s audited net income for its
fiscal year 2021 and 2022 is no less than $3,000,000 respectively. The two earnout payments are due 13 months upon the delivery of Cheyi
BVI’s audited financial statements.
December 31,
2021
December 31,
2020
Other payables and accrued liabilities
Rental deposits
$
220,416
$
215,268
Salary payables
157,970
127,610
Others
44,053
110,540
Receipt in advance
153,399
77,702
Payable under acquisition
10,714,712
16,710,032
-
Advance for operational purpose
286,820
-
Lending with no interests
1,220,176
-
Deposits for purchase of vehicles
476,258