19. Financial Information of the Parent Company

3 Months Ended

Mar. 31, 2021

Financial Information of the Parent Company

NOTE 19 – FINANCIAL INFORMATION OF THE PARENT COMPANY (UNAUDITED)

The Company performed a test on the restricted net assets of its consolidated subsidiaries in accordance with the Securities and Exchange Commission Regulation S-X Rule 5-04 and concluded that it was applicable for the Company to disclose the financial statements for the parent company.

The subsidiary did not pay any dividends to the Company for the periods presented. For the purpose of presenting parent only financial information, the Company records its investment in its subsidiaries under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the Company as “Investment in subsidiaries” and the income (loss) of the subsidiaries is presented as “share of income (loss) of subsidiaries”. Certain information and footnote disclosures generally included in financial statements prepared in accordance with US GAAP are not required.

The Company did not have any significant capital and other commitments, long-term obligations, or guarantees as of March 31, 2021 and December 31, 2020.

PARENT COMPANY BALANCE SHEETS

	March 31,			December 31,
	2021			2020
Assets
Current assets
Investment in subsidiaries	$	(5,325,496	)	$	10,464,035
Total Current Assets		(5,325,496	)		10,464,035
Total Assets	$	(5,325,496	)	$	10,464,035
Liabilities and Shareholders’ (Deficit) Equity
Shareholders’ (Deficit) Equity
Common stock: US$0.0001 par value; authorized-100,000,000 shares; issued and outstanding 97,201,030 shares and 11,201,030 shares at March 31, 2021 and December 31, 2020 respectively*	$	9,720		$	1,120
Additional paid-in capital*		7,360,741			7,248,755
Statutory reserves		1,687,125			1,687,125
(Deficit) retained earnings		(13,607,326	)		2,136,211
Accumulated other comprehensive loss		(775,756	)		(609,176	)
Total Shareholders’ (Deficit) Equity		(5,325,496	)		10,464,035

Total Liabilities and Shareholders’ (Deficit) Equity	$	(5,325,496	)	$	10,464,035

* Giving retroactive effect to the reorganization in connection with the share exchange transaction effected on August 6, 2020

PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME

	For the Three Months ended March 31,
	2021			2020
Equity (loss) income	$	(15,020,996	)	$	1,338,398
Net (loss) income		(15,020,996	)		1,338,398
Foreign currency translation adjustments		(166,580	)		(163,254	)
Comprehensive (loss) income	$	(15,187,576	)	$	1,175,144

PARENT COMPANY STATEMENTS OF CASH FLOWS

	For the Three Months ended March 31,
	2021			2020
Cash flows from operating activities
Net (loss) income	$	(15,020,996	)	$	1,338,398
Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities:
Equity (loss) income		15,020,996			(1,338,398	)
Net cash provided by (used in) operating activities		–			–

Changes in cash and cash equivalents		–			–
Cash and cash equivalents at beginning of year		–			–
Cash and cash equivalents at end of year	$	–		$	–

Hanjiao Group, Inc. 10-Q