| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 3 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES Basis of presentation and consolidation The accompanying consolidated financial
statements are prepared in accordance with accounting principles generally accepted in the United States of America ("US
GAAP"). The consolidated financial statements include the financial statements of the Company, its wholly-owned subsidiaries
and VIEs. All significant inter-company transactions and balances between the Company, its subsidiaries and VIEs are eliminated
upon consolidation. Consolidation of variable interest entities In accordance with accounting standards
regarding consolidation of variable interest entities, VIEs are generally entities that lack sufficient equity to finance their
activities without additional financial support from other parties or whose equity holders lack adequate decision making ability.
All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of
the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. The Company has concluded, based on the
contractual arrangements, that Jiuzhou Pharmacy (including its subsidiaries and controlled entities), Jiuzhou Clinic and Jiuzhou
Service are each a VIE and that the Company's wholly-owned subsidiary, Jiuxin Management, absorbs a majority of the risk
of loss from the activities of these companies, thereby enabling the Company, through Jiuxin Management, to receive a majority
of their respective expected residual returns. Control and common control are defined
under the accounting standards as "an individual, enterprise, or immediate family members who hold more than 50 percent of
the voting ownership interest of each entity." Because the Owners collectively own 100% of Jiuzhou Pharmacy, Jiuzhou Clinic
and Jiuzhou Service, and have agreed to vote their interests in concert since the establishment of each of these three companies
as memorialized in the voting rights agreement, the Company believes that the Owners collectively have control and common control
of the three companies. Accordingly, the Company believes that Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service were constructively
held under common control by Jiuxin Management as of the time the Contractual Agreements were entered into, establishing Jiuxin
Management as their primary beneficiary. Jiuxin Management, in turn, is owned by Renovation, which is owned by the Company. Risks and Uncertainties The operations of the Company are located
in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by political,
economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company's operations
in the PRC are subject to special considerations and significant risks not typically associated with companies in North America
and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign
currency exchange. The Company's results may be adversely affected by changes in the political, regulatory and social conditions
in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing
laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results. The Company has significant cash deposits
with suppliers in order to obtain and maintain inventory. The Company's ability to obtain products and maintain inventory
at existing and new locations is dependent upon its ability to post and maintain significant cash deposits with its suppliers.
In the PRC, many vendors are unwilling to extend credit terms for product sales that require cash deposits to be made. The Company
does not generally receive interest on any of its supplier deposits, and such deposits are subject to loss as a result of the creditworthiness
or bankruptcy of the party who holds such funds, as well as the risk from illegal acts such as conversion, fraud, theft or dishonesty
associated with the third party. If these circumstances were to arise, the Company would find it difficult or impossible, due to
the unpredictability of legal proceedings in China, to recover all or a portion of the amount on deposit with its suppliers. Members of the current management team
own controlling interests in the Company and are also the Owners of the VIEs in the PRC. The Company only controls the VIEs through
contractual arrangements which obligate it to absorb the risk of loss and to receive the residual expected returns. As such, the
controlling shareholders of the Company and the VIEs could cancel these agreements or permit them to expire at the end of the agreement
terms, as a result of which the Company would not retain control of the VIEs. Use of estimates The preparation of unaudited condensed
consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting period. The significant estimates made in the preparation
of the accompanying unaudited condensed consolidated financial statements relate to the assessment of the carrying values of accounts
receivable, advances to suppliers and related allowance for doubtful accounts, useful lives of property and equipment, inventory
reserve and fair value of its purchase option derivative liability. Because of the use of estimates inherent in the financial reporting
process, actual results could materially differ from those estimates. Fair value measurements The Company establishes a three-level valuation
hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include
the following: Level 1 – Quoted prices in active
markets for identical assets or liabilities. Level 2 – Inputs other than Level
1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially
the full term of the assets or liabilities. Level 3 – Unobservable inputs that
are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is
determined based on the lowest level of input that is significant to the fair value measurement. The Company's financial assets and liabilities,
which include financial instruments as defined by FASB ASC 820, include cash and cash equivalents, accounts receivable, accounts
payable, long-term debt and derivatives. The carrying amounts of cash and cash equivalents, financial assets available for sales,
accounts receivable, notes receivables, and accounts payable are a reasonable approximation of fair value due to the short maturities
of these instruments (Level 1). The carrying amount of notes payable approximates fair value based on borrowing rates of similar
bank loan currently available to the Company (Level 2) (See Note 14). The carrying amount of the Company's derivative instruments
is recorded at fair value and is determined based on observable inputs that are corroborated by market data (Level 2). The carrying
amount of the Financial assets available for sale is recorded at fair value and is determined based on unobservable inputs (Level
3). As of September 30, 2019, the fair values of our derivative instruments were carried at fair value (See Note 18). As of September
30, 2019, the fair values of our financial liability were carried at fair value (See Note 19)
Active Market Observable Unobservable Total
Cash and cash equivalents and restricted cash 29,285,169 - $ - 29,285,169
Financial assets available for sale 156,128 156,128
Notes payable - 21,383,423 - 21,383,423
Financial liability 77,048 77,048
Warrants liability - 54,828 $ - 54,828
Total 29,285,169 21,438,251 $ 233,176 50,956,596 Revenue recognition Effective March 31, 2018, the Company began
recognizing revenue under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers
("ASC 606"), using the modified retrospective transition method. The impact of adopting the new revenue standard was
not material to the Company's consolidated financial statements. The core principle of this new revenue standard is that
a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps
are applied to achieve that core principle:
● Step
1: Identify the contract with the customer
● Step
2: Identify the performance obligations in the contract
● Step
3: Determine the transaction price
● Step
4: Allocate the transaction price to the performance obligations in the contract
● Step
5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations
in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised
good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or
service (or bundle of goods or services) if both of the following criteria are met:
● The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct).
● The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the
good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of
consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer,
excluding amounts collected on behalf of third parties (for example, some sales taxes). The consideration promised in a contract
with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price
only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur
when the uncertainty associated with the variable
consideration is subsequently resolved. The transaction price is allocated to each
performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation
is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company's revenue is net of
value added tax ("VAT") collected on behalf of PRC tax authorities with respect to the sales of merchandise. VAT
collected from customers, net of VAT paid for purchases, is recorded as a liability in the accompanying consolidated balance
sheets until it is paid to the relevant PRC tax authorities. Certain contract liabilities primarily
represent the Company's obligation to transfer additional goods or services to a customer for which the Company has received
consideration, for example, membership points. The consideration received remains a contract liability until goods or services
have been provided to the retail customer. The estimated amount based on accrued membership points was deducted from sales revenue. The following is a discussion of the Company's
revenue recognition policies by segment under the new revenue recognition accounting standard: Pharmacy retail sales The physical pharmacies sell
prescription drugs, OTC drugs, traditional Chinese medicine, nutritional supplements, medical devices and sundry products.
Revenue from sales of prescription medicine at drugstores is recognized when the prescription is filled and the customer
picks up and pays for the prescription. Revenue from sales of other merchandise at drugstores is recognized at the point of
sale, which is when a customer pays for and receives the merchandise. Usually the majority of our merchandise, such as
prescription and OTC drugs, are not refundable after the customers leave the counter. Returns of other products, such as
sundry products, are minimal. Sales of drugs reimbursed by the local government medical insurance agency and receivables from
the agency are recognized when a customer pays for the drugs at a store. Based on historical experience, a reserve for
potential losses from denial of reimbursement on certain unqualified drugs is made to the receivables from the government
agency. Additionally, several onsite clinics adjacent to our pharmacies provide limited medical services. Revenue from medical
services is recognized after the service has been rendered to a customer. As revenue from medical services is minimal
compared to pharmacy retail sales, it is included as part of the pharmacy retail sales. Online pharmacy sales The online pharmacy sells various
health products except for prescription drugs. Revenue from online pharmacy sales is recognized when merchandise is shipped
to customers. While most deliveries take one day, certain deliveries may take longer depending on a customer's
location. Any loss caused in a shipment will be reimbursed by the Company's courier company. Our sales policy allows
for the return of certain merchandises without reason within seven days after a customer's receipt of the applicable
merchandise. Historically, sales returns seven days after merchandise receipts have been minimal. Wholesale Jiuxin Medicine purchases medicine in quantity
and distributes products primarily to local pharmacies and medical products dealers. Revenue from sales of merchandise to non-retail
customers is recognized when the merchandise is transferred to customers. Historically, sales returns have been minimal. The Company's revenue is net of value
added tax ("VAT") collected on behalf of PRC tax authorities in respect to the sales of merchandise. VAT collected
from customers, net of VAT paid for purchases, is recorded as a liability in the accompanying consolidated balance sheets until
it is paid to the relevant PRC tax authorities. Disaggregation of Revenue The following table disaggregates the Company's
revenue by major source in each segment for the three and six months ended September 30, 2019:
For the three months ended September 30 2019 2018
Retail drugstores
Prescription drugs $ 6,022,934 $ 5,270,412
OTC drugs 7,463,201 7,660,287
Nutritional supplements 1,676,974 1,935,456
TCM 1,954,500 1,689,697
Sundry products 290,750 345,964
Medical devices 592,914 1,234,482
Total retail revenue $ 18,001,273 $ 18,136,298
Online pharmacy
Prescription drugs $ - $ -
OTC drugs 1,126,655 798,938
Nutritional supplements 136,513 211,990
TCM 21,969 20,703
Sundry products 374,457 517,123
Medical devices 691,670 574,094
Total online revenue $ 2,351,264 $ 2,122,848
Drug wholesale
Prescription drugs $ 6,816,035 $ 4,355,706
OTC drugs 1,048,542 2,629,761
Nutritional supplements 35,048 48,216
TCM 81,130 57,458
Sundry products 5,338 10,775
Medical devices 15,149 47,984
Total wholesale revenue $ 8,001,242 $ 7,149,900
Total revenue $ 28,353,779 $ 27,409,046
For the six months ended September 30 2019 2018
Retail drugstores
Prescription drugs $ 11,718,220 $ 11,079,627
OTC drugs 14,703,429 14,625,115
Nutritional supplements 2,908,107 2,880,662
TCM 3,058,550 3,272,265
Sundry products 588,948 550,825
Medical devices 1,759,007 1,696,145
Total retail revenue $ 34,736,261 $ 34,104,639
Online pharmacy
Prescription drugs $ - $ -
OTC drugs 2,151,257 1,574,931
Nutritional supplements 243,707 355,086
TCM 35,650 25,632
Sundry products 813,193 1,554,289
Medical devices 1,551,062 634,779
Total online revenue $ 4,794,869 $ 4,144,717
Drug wholesale
Prescription drugs $ 11,696,526 $ 7,775,242
OTC drugs 2,122,803 3,904,680
Nutritional supplements 56,739 73,597
TCM 179,958 79,309
Sundry products 11,020 15,530
Medical devices 36,387 83,898
Total wholesale revenue $ 14,103,433 $ 11,932,256
Total revenue $ 53,634,563 $ 50,181,612 Contract Balances Contract liabilities primarily represent
the Company's obligation to transfer additional goods or services to a customer for which the Company has received consideration,
for example membership points. The consideration received remains a contract liability until goods or services have been provided
to the retail customer. The following table provides information
about receivables and contract liabilities from contracts with customers:
September 30, March 31,
Trade receivable(included in accounts receivable, net) $ 7,243,629 $ 8,692,514
Contract liabilities (included in accrued expenses) 1,968,681 1,689,099 Restricted cash The Company's restricted cash consists
of cash and long-term deposits in a bank as security for its notes payable. The Company has notes payable outstanding with the
bank and is required to keep certain amounts on deposit that are subject to withdrawal restrictions. The notes payable are generally
short term in nature due to their short maturity period of six to nine months; thus, restricted cash is classified as a current
asset. The following represents a reconciliation
of cash and cash equivalents in the Consolidated Condensed Balance Sheets to total cash, cash equivalents and restricted cash in
the Consolidated Condensed Statements of Cash Flows as of September 30, 2019 and March 31, 2019:
September 30, March 31,
Cash and cash equivalents $ 17,395,116 $ 9,322,463
Restricted cash 11,890,053 15,422,739
Cash, cash equivalents and restricted cash $ 29,285,169 $ 24,745,202 Accounts receivable Accounts receivable represent the following:
(1) amounts due from banks relating to retail sales that are paid or settled by the customers' debit or credit cards, (2)
amounts due from government social security bureaus and commercial health insurance programs relating to retail sales of drugs,
prescription medicine, and medical services that are paid or settled by the customers' medical insurance cards, (3) amounts
due from non-bank third party payment instruments such as Alipay and certain e-commerce platforms and (4) amounts due from non-retail
customers for sales of merchandise. Accounts receivable are recorded at net
realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as necessary. In the Company's
retail business, accounts receivable mainly consist of reimbursements due from the government insurance bureaus and commercial
health insurance programs and are usually collected within two or three months. The Company directly writes off delinquent account
balances, which it determines to be uncollectible after confirming with the appropriate bureau or program each month. Additionally,
the Company also makes estimated reserves on related outstanding accounts receivable based on historical trends. In the Company's online pharmacy
business, accounts receivable primarily consist of amounts due from non-bank third party payment instruments such as Alipay and
certain e-commerce platforms. To purchase pharmaceutical products from an e-commerce platforms such as Tmall, customers are required
to submit payment to certain non-bank third party payment instruments, such as Alipay, which, in turn, reimburse the Company within
seven days to a month. Except for customer returns of sold products, the receivables from these payments instruments are rarely
uncollectible. In its wholesale business, the Company
uses the aging method to estimate the allowance for anticipated uncollectible receivable balances. Under the aging method, bad
debt percentages are determined by management, based on historical experience and the current economic climate, are applied to
customers' balances categorized by the number of months the underlying invoices have remained outstanding. At each reporting
period, the allowance balance is adjusted to reflect the amount computed as a result of the aging method. When facts subsequently
become available to indicate that the allowance provided requires an adjustment, a corresponding adjustment is made to the allowance
account as a change in estimate. Advances to suppliers Advances to suppliers consist of prepayments
to our vendors, such as pharmaceutical manufacturers and other distributors. Since the acquisition of Jiuxin Medicine, we have
transferred almost all logistics services of our retail drugstores to Jiuxin Medicine. Jiuzhou Pharmacy only directly purchases
certain non-medical products, such as certain nutritional supplements. As a result, almost all advances to suppliers are made by
Jiuxin Medicine. Advances to suppliers for our drug wholesale
business consist of prepayments to our vendors, such as pharmaceutical manufacturers and other distributors. We typically receive
products from vendors within three to nine months after making prepayments. We continuously monitor delivery from, and payments
to, our vendors while maintaining a provision for estimated credit losses based upon historical experience and any specific supplier
issues, such as discontinuing of inventory supply, that have been identified. If we have difficulty receiving products from a vendor,
we take the following steps: cease purchasing products from such vendor, ask for return of our prepayment promptly, and if necessary,
take legal action. If all of these steps are unsuccessful, management then determines whether the prepayments should be reserved
or written off. Inventories Inventories are stated at the lower
of cost or net realizable value. Cost is determined using the first in first out (FIFO) method. The Company carries out
physical inventory counts on a monthly basis at each store and warehouse location. Herbs that the Company cultivates are
recorded at their cost, which includes direct costs such as seed selection, fertilizer, labor costs expended in growing
herbs on the leased farmland, and indirect costs such as amortization of farmland development cost. All costs are accumulated
until the time of harvest and then allocated to harvested herbs costs when the herbs are sold. The Company periodically
reviews its inventory and records write-downs to inventories for shrinkage losses and damaged merchandise that are
identified. The Company provides a reserve for estimated inventory obsolescence or excess quantities on hand equal to the
difference, if any, between the cost of the inventory and its estimated realizable value. Farmland assets Herbs that the Company cultivates are
recorded at their cost, which includes direct costs such as seed selection, fertilizer, and labor costs that are spent in
growing herbs on the leased farmland, and indirect costs such as amortization of farmland development costs. Since April
2014, amortization of farmland development costs has been expensed instead of allocated into inventory due to unpredictable
future market value of planted gingko trees. All related costs described in the above
are accumulated until the time of harvest and then allocated to harvested herbs when they are sold. Property and equipment Property and equipment are stated at cost,
net of accumulated depreciation or amortization. Depreciation is calculated on the straight-line method over the estimated useful
lives of the assets, taking into consideration the assets' estimated residual value. Leasehold improvements are amortized
over the shorter of lease term or remaining lease period of the underlying assets. Following are the estimated useful lives of
the Company's property and equipment:
Estimated
Leasehold improvements 3-10 years
Motor vehicles 3-5 years
Office equipment & furniture 3-5 years
Buildings 35 years Maintenance, repairs and minor renewals
are charged to expenses as incurred. Major additions and betterment to property and equipment are capitalized. Intangible assets Intangible assets are acquired individually
or as part of a group of assets, and are initially recorded at their fair value. The cost of a group of assets acquired in a transaction
is allocated to the individual assets based on their relative fair values. The estimated useful lives of the Company's
intangible assets are as follows:
Estimated
Land use rights 50 years
Software 3 years The Company evaluates intangible assets
for impairment whenever events or changes in circumstances indicate that the assets might be impaired. Impairment of long lived assets The Company evaluates long lived tangible
and intangible assets for impairment, whenever events or changes in circumstances indicate that the carrying value may not be recoverable
from its estimated future cash flows. Recoverability is measured by comparing the assets' net book value to the related projected
undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic
projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted
cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. There were
no fixed assets and farmland assets impaired for the six months ended September 30, 2019. Notes payable During the normal course of business, the
Company regularly issues bank acceptance bills as a payment method to settle outstanding accounts payables with various material
suppliers. The Company records such bank acceptance bills as notes payable. Such notes payable are generally short term in nature
due to their short maturity period of six to nine months. Long-term loans Long-term loans from non-banking financial
institutions are stated at their cost. The loan term is up to three years. The Company makes installment payments on principal
and interest every month. Interest expense is paid and recorded every month. The principal amount due within a year will be classified
as current portion of long-term loan. Income taxes The Company follows FASB ASC Topic 740,
"Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences
of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized
for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting
amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences
are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the
amount expected to be realized. The accounting standards clarify the accounting
and disclosure requirements for uncertain tax positions and prescribe a recognition threshold and measurement attribute for recognition
and measurement of a tax position taken or expected to be taken in a tax return. The accounting standards also provide guidance
on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. No
significant penalties, uncertain tax provisions or interest relating to income taxes were incurred during the periods ended September
30, 2019 and 2018. Value added tax Sales revenue represents the invoiced value
of goods, net of VAT. All of the Company's products are sold in the PRC and are subject to a VAT on the gross sales price.
The VAT rates range up to 17%, depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw
materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT
payable net of payments in the accompanying financial statements. Stock based compensation The Company follows the provisions of FASB
ASC 718, "Compensation — Stock Compensation," which establishes accounting standards for non-employee and employee
stock-based awards. Under the provisions of FASB ASC 718, the fair value of stock issued is used to measure the fair value of services
received as the Company believes such approach is a more reliable method of measuring the fair value of the services. For non-employee
stock-based awards, fair value is measured based on the value of the Company's common stock on the date that the commitment
for performance by the counterparty has been reached or the counterparty's performance is complete. The fair value of the
equity instrument is calculated and then recognized as compensation expense over the requisite performance period. For employee
stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized
as expense with graded vesting on a straight–line basis over the requisite service period for the entire award. Advertising and promotion costs Advertising and promotion costs are
expensed as incurred and amounted to $76,938 and $213,382 for the three months ended September 30, 2019 and 2018,
respectively, and $156,987 and $405,409 for the six months ended September 30, 2019 and 2018, respectively. Such costs
consist primarily of print and promotional materials such as flyers to local communities. Foreign currency translation The Company uses the United States dollar
("U.S. dollars" or "USD") for financial reporting purposes. The Company's subsidiaries and VIEs maintain
their books and records in their functional currency, the Renminbi ("RMB"), the currency of the PRC. Generally, for
consolidation purposes, the Company translates the assets and liabilities of its subsidiaries and VIEs into U.S. dollars
using the applicable exchange rates prevailing as of the balance sheet date, and the statements of income and cash flows are
translated at average exchange rates during the reporting period. As a result, amounts related to assets and liabilities
reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance
sheet. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the financial
statements of the subsidiaries and VIEs are recorded as accumulated other comprehensive income. The balance sheet amounts, with the exception
of equity, at September 30, 2019 and at March 31, 2019 were translated at 1 RMB to 0.1401 USD and at 1 RMB to 0.1490 USD, respectively.
The average translation rates applied to income and cash flow statement amounts for the six months ended September 30, 2019 and
2018 were at 1 RMB to 0.1446 USD and at 1 RMB to 0.1518 USD, respectively. Concentrations and credit risk Certain financial instruments, which subject
the Company to concentration of credit risk, consist of cash and restricted cash. The Company has cash balances at financial institutions
located in Hong Kong and PRC. Balances at financial institutions in Hong Kong may, from time to time, exceed Hong Kong Deposit
Protection Board's insured limits. Since March 31, 2015, balances at financial institutions and state-owned banks within
the PRC are covered by insurance up to RMB 500,000 (USD 72,800) per bank. As of September 30, 2019 and March 31, 2019, the Company
had deposits totaling $29,277,491 and $24,730,736 that were covered by such limited insurance, respectively. Any balance over RMB
500,000 (USD 72,800) per bank in PRC will not be covered. To date, the Company has not experienced any losses in such accounts. For the three months ended September 30,
2019, two largest vendors accounted for 52.2% of the Company's total purchases and one vendor accounted for 28.2% of the
Company's total advances to suppliers. For the three months ended September 30, 2018, three largest vendors accounted for
56.6% of the Company's total purchases and one vendor accounted for 23.3% of the Company's total advances to suppliers. For the six months ended September
30, 2019, two vendors accounted for 51.0% of the Company's total purchases and two vendors accounted for more than 10%
of total advances to suppliers. For the six months ended September 30, 2018, two vendors accounted for 42.4% of the
Company's total purchases and two vendors accounted for m |
