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☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☒
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K, or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years. N/A
No market value has been computed as of December 31, 2021 based upon the fact that no active trading market has been established.
Indicate the number of shares outstanding of each of issuer’s classes of common stock, as of the most practicable date: As of March 31, 2022, there were 160,790,000 shares of Common Stock of the issuer outstanding.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND NATURE OF BUSINESS
Green Vision Biotechnology Corp. (formerly known as Vibe Wireless Corp., originally known as Any Translation Corp.), (the “Company”, “GVBT”), was incorporated under the laws of the State of Nevada on July 5, 2012. The Company was founded to be in the business of translation and interpretation. On November 12, 2015, the Company changed its name from Any Translation Corp. to Vibe Wireless Corp. On September 30, 2016, we changed our name from Vibe Wireless Corp. to Green Vision Biotechnology Corp.
On September 30, 2016, the Company filed a Certificate of Amendment with the Nevada Secretary of State (the “Nevada SOS”) whereby it amended its Articles of Incorporation to increase the Company’s authorized number of shares of common stock from 75 million to 750 million and forward stock split all of its issued and outstanding shares of common stock at a ratio of ten (10) shares for every one (1) share held. The Company’s Board of Directors approved this amendment on September 30, 2016. This stock split has been retroactively applied to the financial statements.
On the same date, September 30, 2016, the Company filed Articles of Merger with the Nevada SOS whereby it entered into a statutory merger with its wholly-owned subsidiary, Green Vision Biotechnology Corp. pursuant to Nevada Revised Statutes 92A.200 et. seq. The effect of such merger is that the Company is the sole surviving entity and changed its name to “Green Vision Biotechnology Corp.”
The investment transaction under the share exchange agreements and contractual agreements as described below (collectively the “Transaction Agreements”) was entered into, between each of the Shareholders of Lutu International Biotechnology Limited (“Lutu International”), a company incorporated under the laws of Cayman Islands and GVBT (the “Investment Transaction”) on May 12, 2017. As a result of closing the Investment Transaction, GVBT acquired part of the shares of Lutu International and assumed management of Lutu International and all its direct and indirect subsidiaries (“the Lutu Group”).
On May 12, 2017, GVBT entered into a share exchange agreement with Harcourt Capital Limited (“Harcourt”), a limited company incorporated in the British Virgin Islands, which holds 6% of the issued and outstanding shares of Lutu International; and Woodhead Investments Limited (“Woodhead”), a limited company incorporated in the British Virgin Islands, which holds 5% of the issued and outstanding shares of Lutu International (the “Minority Interest Exchange Agreement”). Under the Minority Interest Exchange Agreement, Woodhead agreed to transfer GVBT a total of 5% of the issued and outstanding shares of Lutu International. In consideration, GVBT agreed to grant Woodhead, or persons designated by Woodhead, a right to receive a total of 5 million shares of GVBT’s common stock. Under the Minority Interest Exchange Agreement, Harcourt agreed to transfer to GVBT a total of 6% of the issued and outstanding shares of Lutu International. In consideration, GVBT agreed to grant Harcourt, or persons designated by Harcourt, a right to receive a total of 6 million shares of GVBT’s common stock. The transactions under the Minority Interest Exchange Agreement were completed on May 12, 2017.
Able Lead, an 89% shareholder of Lutu International, has an outstanding loan of $4.43 million denominated in Renminbi (“RMB”) owed to an unrelated third party with its maturity date on January 22, 2018 (the “Outstanding Loan”). Able Lead is negotiating an extension of the Outstanding Loan to 2019 with the third party creditor. Shares of Lutu International held by Able Lead were offered by Able Lead as collateral to secure repayment of the Outstanding Loan (the “Security”).
On May 12, 2017, GVBT entered into a share exchange agreement (the “Majority Interest Exchange Agreement”) with Able Lead, the 89% shareholder of Lutu International. Under the Majority Interest Exchange Agreement, Able Lead agreed to enter into a series of contractual arrangements with GVBT (collectively, the “Contractual Arrangements”) (as described below), in which GVBT assumed management control of the Lutu Group. Able Lead further agreed to deliver the shares of Lutu International to GVBT once the Outstanding Loan is fully repaid. In consideration, GVBT agreed to issue and deliver a total of 89 million shares of GVBT’s common stock to an escrow agent (issued in the name of the escrow agent or its nominee) (the “Escrow Shares “). The Escrow Shares are held in escrow for a period of one year or such period of time to be agreed by GVBT and Able Lead upon the execution of the Majority Interest Exchange Agreement. Conditional upon the full repayment of the Outstanding Loan and the release of the Security, the Escrow Shares shall be released to Able Lead in exchange for the delivery of a total of 89% of the issued and outstanding shares of Lutu International by Able Lead to GVBT. In the event that Able Lead fully repays the Outstanding Loan and causes the release of the Security, then the Escrow Shares shall be delivered to Able Lead. In the event that Able Lead cannot fully repay the Outstanding Loan (within a period of one year, or such period of time to be agreed by GVBT and Able Lead) and cause the release of the Security, then the Escrow Shares shall be delivered to transfer agent for cancellation. Unless otherwise expressly agreed in writing by GVBT and Able Lead, the Majority Interest Exchange Agreement shall be automatically terminated upon the termination of any of the agreements in the Contractual Arrangements described as below. The transactions under the Majority Interest Exchange Agreement were completed on May 12, 2017.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND NATURE OF BUSINESS (CONTINUED)
Pursuant to an escrow agreement (the “Escrow Agreement”) entered into between Booth Udall Fuller, PLC (the “Escrow Agent”) and GVBT on May 12, 2017, the Escrow Shares shall be held by Booth Udall Fuller, PLC for a year following the execution of the Majority Interest Exchange Agreement. The Escrow Shares shall not be subject to any lien, attachment, or any other judicial process of any creditor of GVBT, and shall be held and disbursed solely for the purposes and in accordance with the terms of the Majority Interest Exchange Agreement.
On July 30, 2019, the Company cancelled the 89,000,000 shares of common stock, par value $.001 per share, and re-issued them to Able Lead Holdings Limited. The issuance was done pursuant to Section 4(a)(2) of the Securities Act of 1933. as it was a non-public offering. On May 12, 2017, the Company had placed the 89,000,000 shares into escrow with Booth Udall Fuller PLC, pending repayment of a loan and discharge of shares of Lutu International by Able Lead Holdings Limited. Full repayment of such was made on February 27, 2019. Therefore, the 89,000,000 shares were returned from escrow and cancelled. Then they were re-issued to Able Lead Holdings Limited. Thereafter, Able Lead transferred the shares to six (6) shareholders who are not affiliated with GVBT.
On May 12, 2017, GVBT entered into the Contractual Agreements with Lutu International and/or Able Lead. Upon execution of the Contractual Arrangements, GVBT assumed management of Lutu International and its subsidiaries (the “Lutu Group”) and received economic benefits which includes the right to receive the expected residual returns and and/or obligation to absorb expected loss from the Lutu Group. Each agreement in the Contractual Arrangements constitutes valid and binding obligations of the parties of such agreements and is enforceable and valid in accordance with the laws of Cayman Islands. All agreements executed by Lutu International were duly approved by its board of directors and the Shareholders of Lutu International.
Consulting Services Agreement
Pursuant to the exclusive consulting services agreement entered into between GVBT and Lutu International on May 12, 2017, GVBT has the exclusive right to provide to the Lutu Group general business operation services, including advice and strategic planning, as well as consulting services related to the technological research and development of bio-fertilizers. Further, GVBT owns the intellectual property rights developed or discovered through research and development, in the course of providing the consulting services, or derived from the provision of the consulting services. In consideration, Lutu International pays an annual consulting service fees to GVBT in the amount equivalent to all of Lutu International’s net profits for the relevant financial year. The term of this consulting service agreement is five (5) years from its effective date and may be terminated upon GVBT’s written confirmation prior to the expiration of this agreement.
Unless otherwise expressly agreed in writing by GVBT and Able Lead, the Consulting Services Agreement shall be automatically terminated upon the termination of any of the agreements in the Contractual Arrangements or the Majority Interest Exchange Agreement.
Operating Agreement
Pursuant to the operating agreement entered into between GVBT, Lutu International and Able Lead on May 12, 2017, GVBT agreed to provide guidance and instructions on the Lutu Group’s daily operations, financial management and employment issues. Able Lead agreed to designate candidates recommended by GVBT as their representatives on the boards of directors of each member of the Lutu Group. GVBT has the right to appoint senior executives of each member of the Lutu Group. In addition, GVBT agreed to guarantee the Lutu Group’s performance under any agreements or arrangements relating to the Lutu Group’s business arrangements with any third party. In consideration, Lutu International agrees that it will not, and will cause the Lutu Group not to, without the prior consent of GVBT, engage in any transactions that could materially affect their respective assets, liabilities, rights or operations, including but not limited to, incurrence or assumption of any indebtedness, sale or purchase of any assets or rights, incurrence of any encumbrance on any of their assets or intellectual property rights in favor of a third party or transfer of any agreements relating to their business operation to any third party. The term of this operating agreement is five (5) years from its effective date and may be extended and terminated only upon GVBT’s written confirmation prior to the expiration of this agreement.
Unless otherwise expressly agreed in writing by GVBT and Able Lead, the Operating Agreement shall be automatically terminated upon the termination of any of the agreements in the Contractual Arrangements or the Majority Interest Exchange Agreement.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND NATURE OF BUSINESS (CONTINUED)
Proxy Agreement
Pursuant to the proxy agreement entered into between Able Lead, Lutu International, and GVBT on May 12, 2017, Able Lead agreed to irrevocably grant a person to be designated by GVBT the right to exercise its voting rights and other rights, including the attendance of, and the voting at the shareholders’ meetings of Lutu International for and on behalf of Able Lead (or the signing of written resolutions in lieu of such meetings) in accordance with applicable laws and its articles of association, including but not limited to the appointment and voting for the directors and chairman of the board as the authorized representative of Able Lead to exercise controlling power in the Lutu Group. The proxy agreement may be terminated by joint consent of the parties or upon 7-day written notice from GVBT. The proxy right granted by the proxy agreement has never been exercised.
Changes Resulting from the Investment Transaction
change of control of GVBT. Prior to closing of the Investment Transaction, GVBT had a total of 60,790,000 shares of common stock issued and outstanding. As a result of the closing of the Investment Transaction, GVBT now has a total of 160,790,000 shares of its common stock issued and outstanding, of which 60,790,000 shares, or approximately 37.8%, are owned by the previous existing shareholders of GVBT, with the balance of 100,000,000 shares, or approximately 62.2%, owned by the previous shareholders of Lutu International, with certain shares held in escrow pursuant to the Escrow Agreement.
Following the closing of the Investment Transaction, GVBT began carrying on the business of the Lutu Group. The Lutu Group, with its operation primarily located in the Shanxi Province of China, is engaged in the biotechnology industry, in particular, the production and distribution of bio-fertilizers. Revenues of the Lutu Group are currently generated from China.
Changes to the Board of Directors and Officers
Simultaneous with the closing of the Investment Transaction, there was a change in the officers and directors of GVBT. As authorized by the bylaws, the existing director of GVBT, Mr. Ma Wai Kin, appointed two (2) additional members to the Board of GVBT. Such members are Mr. Lam Ching Wan (also known as William Lam) and Mr. Leung Kwong Tak (also known as Dr. Michael Leung). Mr. Ma also appointed Mr. William Lam as GVBT’s Chief Executive Officer and Mr. Lo Kwok Leung as GVBT’s Chief Financial Officer. Mr. Lo Kwok Leung is not related to Dr. Michael Leung.
All members of the Board shall hold their respective offices for a term of one year from their respective dates of appointment, or until the election and qualification of their successors, and thereafter to resign as a director of GVBT. In accordance with the bylaws, officers are elected by the board of directors and serve at the discretion of the board of directors.
Accounting Treatment
The Investment Transaction was accounted for as a reverse-merger and recapitalization. For financial reporting purposes, Lutu International is the acquirer and GVBT is the acquired company. After completion of the transaction, the assets, liabilities, operations results and cash flow of GVBT that will be reflected in the historical consolidated financial statements prior to the Investment Transaction will be those of Lutu International and its subsidiaries and will be recorded at the historical cost basis of Lutu International and its subsidiaries. Number of shares deemed to be outstanding for the period from January 1, 2016 to the acquisition date will be reflected in the balance of the common stock and paid in capital. The Company changed its fiscal year ended from January 31 to December 31.
Tax Treatment and SEC Filer Status: Small Business Issuer
The Investment Transaction is intended to constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), or such other tax free reorganization exemptions that may be available under the Code. Immediately following the Investment Transaction, the filer status of GVBT will be a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K, as promulgated by SEC.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for consolidated financial reporting.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Presentation
The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The historical presentation of the consolidated financial statements includes the financial statements of LUTU INTERNATIONAL BIOTECHNOLOGY LIMITED, and its wholly-owned subsidiaries (collectively referred to herein as the “Company”). All intercompany accounts, transactions, and profits have been eliminated upon consolidation.
Name of Subsidiary | | Place of Incorporation | | Attributable Equity Interest % | | | Registered Capital | |
Lutu International Biotechnology Limited (RTO accounting acquirer) (1) | | Cayman Islands | | | 100 | | | USD100 | |
Light Raise Limited (2) | | BVI | | | 100 | | | USD 1 | |
Hong Kong Prolific Mineral Resources Holdings Limited (3) | | HKD | | | 100 | | | HKD 2 | |
Shanxi Green Biotechnology Industry Company Limited (4) | | PRC | | | 100 | | | RMB 100,000,000 | |
Shenzhen Qianhai Lutu Supply Chain Management Company Limited (5) | | PRC | | | 100 | | | RMB 5,000,000 | |
Note: | (1) | Wholly owned subsidiary of Green Vision Biotechnology Corp. |
| (2) | Wholly owned subsidiary of Lutu International Biotechnology Limited |
| (3) | Wholly owned subsidiary of Light Raise Limited |
| (4) | Wholly owned subsidiary of Hong Kong Prolific Mineral Resources Holdings Limited |
| (5) | Wholly owned subsidiary of Shanxi Green Biotechnology Industry Company Limited (deregistered on April 7, 2020) |
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
Significant estimates and judgments inherent in the preparation of these consolidated financial statements include, among other things, accounting for asset impairments, allowances for doubtful accounts, depreciation and amortization, the collection of revenues from the Agricultural Cooperative.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Economic and political risks
The Company’s operations are mainly conducted in the Hong Kong Special Administrative Region (“Hong Kong”) and the People’s Republic of China (“China”) (for the purpose of this Current Report on Form 10-Q, China does not include Hong Kong, Macau Special Administrative Region of the People's Republic of China and Taiwan (The Republic of China) and a large number of customers are located in northern China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in Hong Kong and China, and by the general state of the economy in Hong Kong and China.
The Company’s operations and customers in Hong Kong and China 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 environments, and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in Hong Kong and China, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.
Foreign Currency Translation
The Company’s financial statements are presented in the U.S. dollar ($), which is the Company’s reporting currency, while its functional currency are Chinese Renminbi (RMB) and Hong Kong Dollar (HKD). Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income.
In accordance with ASC 830, Foreign Currency Matters, the Company translated the assets and liabilities into US $ using the rate of exchange prevailing at the applicable balance sheet date and the statements of income and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation are recorded in shareholders’ equity as part of accumulated other comprehensive income.
Below is a table with foreign exchange rates used for translation:
For the years ended December 31, (Average Rate) | | 2021 | | | 2020 | |
Chinese Renminbi (RMB) | | RMB | | | 6.47134 | | | RMB | | | 6.89826 | |
United States dollar ($) | | | | $ | 1.00000 | | | | | $ | 1.00000 | |
| | | | | | | | | | | | |
As of December 31, (Closing Rate) | | 2021 | | | 2020 | |
Chinese Renminbi (RMB) | | RMB | | | 6.44795 | | | RMB | | | 6.52825 | |
United States dollar ($) | | | | $ | 1.00000 | | | | | $ | 1.00000 | |
| | | | | | | | | | | | |
For the years ended December 31, (Average Rate) | | 2021 | | | 2020 | |
Hong Kong (HKD) | | HKD | | | 7.77260 | | | HKD | | | 7.75599 | |
United States dollar ($) | | | | $ | 1.00000 | | | | | $ | 1.00000 | |
| | | | | | | | | | | | |
As of December 31, (Closing Rate) | | 2021 | | | 2020 | |
Hong Kong (HKD) | | HKD | | | 7.79580 | | | HKD | | | 7.75230 | |
United States dollar ($) | | | | $ | 1.00000 | | | | | $ | 1.00000 | |
| | | | | | |
For the years ended December 31, (Average Rate) | | 2021 | | | 2020 | |
Hong Kong (HKD) | | HKD | | | 1.20480 | | | HKD | | | 1.12434 | |
Chinese Renminbi (RMB) | | | | $ | 1.00000 | | | | | $ | 1.00000 | |
| | | | | | | | | | | | |
As of December 31, (Closing Rate) | | 2021 | | | 2020 | |
Hong Kong (HKD) | | HKD | | | 1.22570 | | | HKD | | | 1.18750 | |
Chinese Renminbi (RMB) | | | | $ | 1.00000 | | | | | $ | 1.00000 | |
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue Recognition
The Company earns revenue by selling merchandise to end using customers primarily through distribution agent and directly to customers.
Revenue is recognized in accordance with the following five steps: when merchandise is purchased by the customer which identifies the contract (step 1) and performance obligations in the contract (step 2) with Customers. When the Company confirmed the price and collectability is reasonably assured which indicates that the transaction price is determined (step 3) and allocated to the performance obligations in the contract (step 4). When the merchandise is delivered to the customer, the performance obligation is satisfied (step 5). Revenue from wholesale distribution agent is recognized after goods delivered, amount fixed or determined and collectability is reasonably assured when the above mentioned five steps are completed.
All revenues are shown net of estimated returns during the relevant period represented by measuring the returns obligations with estimated allowance for sales returns based upon historical experience.
The Company records sales tax collected from its customers on a net basis, and therefore excludes it from revenue as defined in ASC 606, Revenue from Contracts with Customers.
During the year ended December 31, 2021 and 2020, the provision of sales return were $Nil and $Nil respectively.
Cost of Goods Sold
Cost of goods sold includes the cost of materials, labor, and relevant manufacturing expenses.
Selling Expenses
Selling expenses include packaging and shipping costs, as well as advertising and certain expenses associated with operating the Company’s corporate headquarters.
Advertising Costs
The Company expensed all advertising costs as incurred. Advertising expense, net of reimbursement from suppliers, amounted to $Nil and $Nil for the year ended December 31, 2021 and 2020 respectively. Advertising expense is included in selling expense and general and administrative expenses in the accompanying consolidated statements of income.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Leases
On January 1, 2019, the Company adopted Topic 842 using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts have not been adjusted and continue to be reported in accordance with its historical accounting under Topic 840.
The Company elected the package of practical expedients permitted under the transition guidance, which allowed it to carry forward its historical lease classification, its assessment on whether a contract was or contains a lease, and its initial direct costs for any leases that existed prior to January 1, 2020. The Company also elected to combine its lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term.
Upon adoption, the Company recognized ROU assets with corresponding liabilities on the consolidated balance sheets. The ROU assets include adjustments for prepayments and accrued lease payments. The adoption did not impact its beginning retained earnings, or its prior year consolidated statements of income and statements of cash flows.
Under Topic 842, the Company determines if an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of its leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise such options.
Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current and non-current operating lease liabilities, on the consolidated balance sheets.
The Company did not have a lease that met the criteria of a capital lease. Leases that do not qualify as a capital lease are classified as an operating lease. Operating lease rental expenses included in selling, general and administrative expenses for year ended December 31, 2021 and 2020 were $Nil and $Nil respectively.
Accounts Receivable
Accounts receivable is recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is maintained for all customers based on a variety of factors, including the industry practice, the length of time the receivables are past due, significant one-time events and historical experience. The Company is selling products delivered to certain customers which are closed to Agriculture Cooperatives as defined by ASC 905 “Agriculture”. The collection cycle may be varied and depended on the growing crops cycle.
Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. The Company evaluates the credit risk of its customers utilizing historical data and estimates of future performance. Bad debts are written off as incurred.
Outstanding accounts balances are reviewed individually for collectability. The Company does not charge any interest income on trade receivables. Accounts balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. To date, the Company has not charged off any balances as it has yet to exhaust all means of collection.
During the year ended December 31, 2021 and 2020, the provision of doubtful debts were $Nil and $Nil respectively.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Inventories
Inventories primarily consist of merchandise inventories and are stated at lower of cost or market and net realizable value. Cost of inventories is calculated on the weighted average basis which approximates cost.
Management regularly reviews inventories and records valuation reserves for damaged and defective returns, inventories with slow-moving or obsolescence exposure and inventories with carrying value that exceeds market value. Because of its product mix, the Company has not historically experienced significant occurrences of obsolescence.
Inventory shrinkage is accrued as a percentage of revenues based on historical inventory shrinkage trends. The Company performs physical inventory count of its stores once per quarter and cycle counts inventories at its distribution centers once per quarter throughout the year. The reserve for inventory shrinkage represents an estimate for inventory shrinkage for each store since the last physical inventory date through the reporting date.
These reserves are estimates, which could vary significantly, either favorably or unfavorably, from actual results if future economic conditions, consumer demand and competitive environments differ from expectations.
During the year ended December 31, 2021 and 2020, the provision of inventory reversal were $21,111 and $89,148 respectively.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is provided over the estimated useful lives, using the straight-line method with 5% scrape value as follows:
Buildings | | 20 years |
Machinery & equipment | | 10 years |
Office equipment | | 3 years |
Motor vehicles | | 4 years |
Land Use Rights
According to the laws of the PRC, the government owns all the land in the PRC. Companies or individuals are authorized to possess and use the land only through the land use rights granted by the government. The land use rights represent cost of the rights to use the land in respect of properties located in the PRC. Land use rights are carried at cost and amortized on a straight-line basis over the period of rights of 50 years.
Goodwill
Goodwill represents the excess of purchase price over fair value of net assets acquired. Under ASC 350, Intangibles — Goodwill and Other, goodwill is not amortized but evaluated for impairment annually or whenever events or changes in circumstances indicate that the value may not be recoverable.
The Company performed an annual impairment test as of the end of fiscal year 2021, and determined that an impairment loss in the amount of $Nil were recorded in 2021.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Long-lived Assets
The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows, usually at the store level. The carrying amount of a long-lived asset is not considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset. If the asset is determined not to be recoverable, then it is considered to be impaired and the impairment to be recognized is the amount by which the carrying amount of the asset exceeds the fair value of the asset, determined using discounted cash flow valuation techniques, as defined in ASC 360, Property, Plant, and Equipment.
The Company determined the sum of the undiscounted cash flows expected to result from the use of the asset by projecting future revenue and operating expense for each store under consideration for impairment. The estimates of future cash flows involve management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance and economic conditions.
During the reporting periods, the Company performed the evaluation and there was no impairment loss.
Cash and Concentration of Credit Risk
The Company maintains cash in bank deposit accounts in Hong Kong and PRC, and considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company performs ongoing evaluations of the institution to limit its concentration risk exposure.
The Company’s customers are mainly located in the northeastern China. Because of this, the Company is subject to regional risks, such as the economy, regional financial conditions and unemployment, weather conditions, power outages, and other natural disasters specific to the region in which the Company operates.
Retirement Benefit Plans
Full time employees of the Company in China participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require the Company to make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Company accounts the mandated defined contribution plan under the vested benefit obligations approach based on the guidance of ASC 715, Compensation—Retirement Benefits.
The total amounts for such employee benefits which were expensed were $3,998 and $1,386 for the year ended December 31, 2021 and 2020 respectively.
Income Taxes
The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.
Comprehensive income
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other consolidated financial statements. The Company’s current component of comprehensive income is the net income and foreign currency translation adjustment.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Segment Reporting
The Company operates in one industry segment, operating manufacturing and selling of organic bio-fertilizer. ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Given the economic characteristics of the similar nature of the products sold, the type of customer and the method of distribution, the Company operates as one reportable segment as defined by ASC 280, Segment Reporting.
Basic and diluted earnings (loss) per share
In accordance with ASC No. 260 “Earnings Per Share”, the basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share is computed similarly to basic earnings (loss) per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
Recently Issued Accounting Guidance
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (ASU 2016-13). The main objective of the standard is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In issuing this standard, the FASB is responding to criticism that today’s guidance delays recognition of credit losses. The standard will replace today’s “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. The standard is applicable to loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, loan commitments and certain other off-balance sheet credit exposures, debt securities (including those held-to-maturity) and other financial assets measured at fair value through other comprehensive income, and beneficial interests in securitized financial assets. The CECL model does not apply to available-for-sale debt securities. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the credit losses will be recognized as allowances rather than reductions in the amortized cost of the securities. Accordingly, the new methodology will be utilized when assessing the Company’s financial instruments for impairment. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses. ASU 2016-13 is effective for years beginning after December 15, 2019, including interim periods within those fiscal years under a modified retrospective approach. Early adoption is permitted for the periods beginning after December 15, 2018. The Company adopted the guidance from July 1, 2020. The Company finalized its analysis and the adoption of this guidance has no material impact on the Company’s consolidated financial statements and its internal controls over financial reporting.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which modifies the disclosure requirements on fair value measurements, including removing the requirement to disclose (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (2) the policy for timing of transfers between levels and (3) the valuation processes for Level 3 fair value measurements. ASU 2018-13 also added new disclosures including the requirement to disclose (a) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (b) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2019 and early adoption is permitted. This standard will only impact the disclosures pertaining to fair value measurements. The Company adopted the guidance from July 1, 2020. The Company finalized its analysis and the adoption of this guidance has no material impact on the Company’s consolidated financial statements and its internal controls over financial reporting.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. GOING CONCERN
As of December 31, 2021 and 2020, the Company has an accumulated deficit of $7,637,736 and $7,137,959 respectively, and its current liabilities exceed its current assets resulting in negative working capital of $10,808,875 and $10,399,991 respectively. In view of the matters described above, recoverability of a major portion of the recorded asset amounts and realization of the portion of current liabilities into revenue shown in the accompanying balance sheets are dependent upon continued operations of the Company, which in turn are dependent upon the Company's ability to raise additional financing and to succeed in its future operations. The Company may need additional cash resources to operate during the upcoming 12 months, and the continuation of the Company may be dependent upon the continuing financial support of investors and/or stockholders of the Company. However, there is no assurance that equity or debt offerings will be successful in raising sufficient funds to assure the eventual profitability of the Company. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. The Company is actively pursuing (i) additional funding which would enhance capital employed; and (ii) strategic partners which would increase revenue bases or reduce operation expenses. Management believes that the above actions will allow the Company to continue its operations throughout this fiscal year.
NOTE 4. OTHER RECEIVABLES
Other receivables consisted of the following:
| | Dec 31, 2021 | | | Dec 31, 2020 | |
| | | | | | |
Deposits | | $ | 109,636 | | | $ | 106,815 | |
Prepaid expenses | | | 994 | | | | 2,479 | |
Advance to employee | | | 12,964 | | | | 12,631 | |
| | | | | | | | |
Less: Allowance for doubtful debts | | | (123,274 | ) | | | (120,103 | ) |
| | | | | | | | |
Total | | $ | 320 | | | $ | 1,822 | |
NOTE 5. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment consisted of the following:
| | Dec 31, 2021 | | | Dec 31, 2020 | |
| | | | | | |
Buildings | | $ | 3,108,160 | | | $ | 3,028,189 | |
Machinery & equipment | | | - | | | | - | |
Office equipment | | | 66,723 | | | | 65,041 | |
Motor vehicles | | | 71,804 | | | | 69,956 | |
| | | | | | | | |
Total property, plant and equipment | | | 3,246,687 | | | | 3,163,186 | |
Less: accumulated depreciation and impairment charges | | | (1,173,476 | ) | | | (1,000,562 | ) |
| | | | | | | | |
Total property, plant and equipment, net | | $ | 2,073,211 | | | $ | 2,162,624 | |
The depreciation expenses for the year ended December 31, 2021 and 2020 were $144,457 and $132,323 respectively.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6. INTANGIBLE ASSETS
Intangible assets consisted of the following:
| | Dec 31, 2021 | | | Dec 31, 2020 | |
| | | | | | |
Land use rights | | $ | 1,265,572 | | | $ | 1,233,010 | |
Software system | | | 1,380 | | | | 1,344 | |
Less – accumulated amortization | | | (448,549 | ) | | | (412,348 | ) |
| | | | | | | | |
Total intangible assets, net | | $ | 818,403 | | | $ | 822,006 | |
The amortization expenses of land use rights and software systems for the year ended December 31, 2021 and 2020 were $24,954 and $23,337 respectively.
Future amortization of land use rights and software systems is as follows:
Years ending December 31, | | Amount | |
2022 | | $ | 24,954 | |
2023 | | | 24,954 | |
2024 | | | 24,954 | |
2025 | | | 24,954 | |
2026 | | | 24,954 | |
Thereafter | | | 693,633 | |
| | | | |
Total | | $ | 818,403 | |
NOTE 7. INVENTORIES
Inventories consisted of the following:
| | December 31, 2021 | | | December 31, 2020 | |
| | | | | | |
Raw material | | $ | 48,916 | | | $ | 47,657 | |
Work in progress | | | - | | | | - | |
Finished goods | | | 1,700 | | | | - | |
Goods on consignment | | | 1,036 | | | | 23,528 | |
Less: Provision of inventory | | | (51,652 | ) | | | (71,185 | ) |
| | | | | | | | |
Inventories, net | | $ | - | | | $ | - | |
The provision of inventory reversal for the year ended December 31, 2021 and 2020 were $21,111 and $89,148 respectively.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8. CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS
Sales:
Customer | | As at December 31, 2021 | | | As at December 31, 2020 | |
A | | | $112,362 | | | | 77 | % | | | $29,743 | | | | 34 | % |
B | | | 25,917 | | | | 18 | % | | | 18,555 | | | | 21 | % |
C | | | 6,820 | | | | 5 | % | | | 9,278 | | | | 11 | % |
D | | | - | | | | - | % | | | 7,944 | | | | 9 | % |
E | | | - | | | | - | % | | | 5,219 | | | | 6 | % |
Total | | | $145,099 | | | | 100 | % | | | $70,739 | | | | 81 | % |
Purchases:
Supplier | | As at December 31, 2021 | | | As at December 31, 2020 | |
AA | | $ | 72,113 | | | | 99 | % | | $ | 37,302 | | | | 100 | % |
BB | | | 1,022 | | | | 1 | % | | | - | | | | - | % |
CC | | | - | | | | - | % | | | - | | | | - | % |
DD | | | - | | | | - | % | | | - | | | | - | % |
EE | | | - | | | | - | % | | | - | | | | - | % |
Total | | $ | 73,135 | | | | 100 | % | | $ | 37,302 | | | | 100 | % |
NOTE 9. OTHER PAYABLES
Other payables consisted of the following:
| | December 31, 2021 | | | December 31, 2020 | |
| | | | | | |
Amount due to third parties | | | 251,561 | | | | 245,088 | |
Payables to employees | | $ | 2,011 | | | $ | 1,960 | |
Miscellaneous | | | 10,645 | | | | 8,097 | |
| | | | | | | | |
Total other payables | | $ | 264,217 | | | $ | 255,145 | |
NOTE 10. LOSS PER SHARE
The Company calculates earnings per share in accordance with ASC 260, Earnings Per Share, which requires a dual presentation of basic and diluted earnings per share. Basic earnings per share are computed using the weighted average number of shares outstanding during the fiscal year. Potentially dilutive common shares consist of convertible preferred stock (using the if-converted method) and exercisable warrants and stock options outstanding (using the treasury method). The following table sets forth the computation of basic and diluted net income per common share:
The following table sets forth the computation of basic and diluted net income per common share:
Period ended December 31, | | Dec 31, 2021 | | | Dec 31, 2020 | |
| | | | | | |
Net loss attributable to ordinary shareholders for computing basic net loss per ordinary share | | | | | | |
-Continuing | | $ | (499,777 | ) | | $ | (392,462 | ) |
-Discontinued | | $ | - | | | $ | (3,565 | ) |
Weighted-average shares of common stock outstanding in computing net loss per common stock | | | | | | | | |
Basic | | | 160,790,000 | | | | 160,790,000 | |
Diluted | | | 160,790,000 | | | | 160,790,000 | |
Basic and Diluted loss per share of common stock- | | | | | | | | |
-Continuing | | | (0.311 | )cents | | | (0.244 | )cents |
-Discontinued | | | - | | | | (0.002 | )cents |
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11. RELATED PARTIES TRANSACTIONS AND BALANCE
Key management compensation
The Company incurred the following compensation with key management personnel, which are defined by ASC 850, Related Party Disclosures, as those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including directors and management.
| | Dec 31, 2021 | | | Dec 31, 2020 | |
| | | | | | |
Salaries and wages - Lo Kwok Leung | | $ | 11,708 | | | $ | 21,661 | |
Director fees - Lam Ching Wan, William | | | 46,317 | | | | 46,416 | |
Director fees - Ma Wai Kin | | | 30,878 | | | | 30,944 | |
Director fees - Leung Kwong Tak | | | 32,422 | | | | 18,965 | |
| | | | | | | | |
Total salaries and director fees | | $ | 121,325 | | | $ | 117,986 | |
Related party transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Balances and transactions between the Company and its subsidiary have been eliminated on consolidation and are not disclosed in this note.
Related party balances included in the statement of financial position are all non-interest bearing, unsecured and due on demand., A breakdown is as follows:
Amount as at | | December 31, 2021 | | | December 31,2020 | |
Amount due to related parties: | | | | | | |
Holmsun Capital Limited (a) (b) | | | 5,797,204 | | | | 5,745,866 | |
| | $ | 5,797,204 | | | $ | 5,745,866 | |
(a) | Common director, LEUNG Kwong Tak of operating subsidiary Lutu International Biotechnology Limited |
(b) | Common shareholder, LEUNG Kwong Tak of operating subsidiary Lutu International Biotechnology Limited |
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12. INCOME TAXES
The Company and its subsidiaries have no operation in United States, Cayman Islands and British Virgin Islands, and are not subject to any domestic income tax. Therefore, no domestic income tax of United States, Cayman Islands and British Virgin Islands are paid in the year ended December 31, 2021 and 2020 respectively.
Hong Kong Prolific Mineral Resources Holdings Limited was incorporated in Hong Kong and is subjected to Hong Kong profits tax rate of 16.5% for the year ended December 31, 2021 and 2020. Income tax (reversal) expense amounted to $Nil for the year ended December 31, 2021 and 2020.
A reconciliation of the provision for income taxes with amounts determined by applying the Hong Kong profit rate of 16.5% to income before income taxes is as follows:
| | December 31, 2021 | | | December 31,2020 | |
| | | | | | |
Profit (Loss) before income tax | | $ | (265,506 | ) | | $ | (270,342 | ) |
Temporary Difference | | | - | | | | - | |
Permanent Difference | | | - | | | | - | |
Taxable loss | | $ | (265,506 | ) | | $ | (270,342 | ) |
Hong Kong Profits Tax rate | | | 16.5 | % | | | 16.5 | % |
Current tax credit | | $ | 43,808 | | | $ | 44,606 | |
Less: Valuation allowance | | | (43,808 | ) | | | (44,606 | ) |
| | $ | - | | | $ | - | |
No deferred tax has been provided as there are no material temporary differences arising during the year ended December 31, 2021 and 2020.
Shanxi Green Biotechnology Industry Company Limited and Shenzhen Qianhai Lutu Supply Chain Management Company Limited (deregistered on April 7, 2020) were incorporated in the PRC and are subjected to income taxes under the current laws of the PRC. The EIT rate of PRC was 25% for the year ended December 31, 2021 and 2020.
Profit (loss) before income tax of $(234,271) and $(125,782) for the year ended December 31, 2021 and 2020 respectively, were attributed to operations in China. The income tax expenses consisted of the following:
| | December 31, 2021 | | | December 31, 2020 | |
| | | | | | |
Profit (Loss) before income tax | | $ | (234,271 | ) | | $ | (125,782 | ) |
Temporary Difference | | | - | | | | - | |
Permanent Difference | | | - | | | | - | |
Taxable loss | | $ | (234,271 | ) | | $ | (125,782 | ) |
China Enterprise Income Tax rate | | | 25 | % | | | 25 | % |
Current tax credit | | $ | 58,568 | | | $ | 31,446 | |
Less: Valuation allowance | | | (58,568 | ) | | | (31,446 | ) |
| | $ | - | | | $ | - | |
No deferred tax has been provided as there are no material temporary differences arising during the year ended December 31, 2021 and 2020.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13. SEGMENT INFORMATION
FASB Accounting Standard Codification Topic 280 (ASC 280) “Segment Reporting” establishes standards for reporting information about operating segments in financial statements. 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, or decision making group, in deciding how to allocate resources and in assessing performance.
In the year ended December 31, 2021 and 2020, the Company is regarded as a single operating segment, being engaged in the manufacturing of bio-fertilizer. This principal activity and geographical market are substantially based in China, accordingly, no operating or geographical segment information are presented.
NOTE 14. COMPREHENSIVE INCOME
Total comprehensive income includes, in addition to net income, changes in equity that are excluded from the consolidated statements of income and are recorded directly into a separate section of shareholders’ equity on the consolidated balance sheets. Comprehensive income and its components consist of the following:
Year Ended December 31 | | 2021 | | | 2020 | |
| | | | | | |
Net loss | | $ | (499,777 | ) | | $ | (396,027 | ) |
Other comprehensive income, net of tax | | | | | | | | |
Foreign currency translation adjustment | | | (2,171 | ) | | | (103,991 | ) |
| | | | | | | | |
Comprehensive loss | | $ | (501,948 | ) | | $ | (500,018 | ) |
NOTE 15. DISCONTINUED OPERATIONS
On September 26, 2019, the Company has resolved to discontinue the operation of the subsidiary company, Shenzhen Qianhai Lutu Supply Chain Management Company Limited. On September 26, 2019 and onwards, any operation from Shenzhen Qianhai Lutu Supply Chain Management Company Limited has been classified as discontinued operations on the statement of operations. Previous period’s operation has been similarly classified for comparative purposes. A breakdown of discontinued operation for the year ending December 31, 2021 and 2020 is as follows:
Year Ended December 31 | | 2021 | | | 2020 | |
| | | | | | |
Operating expenses | | | | | | | | |
Selling expenses | | $ | - | | | $ | - | |
General and administrative expenses | | | - | | | | - | |
Loss from operations | | | - | | | | - | |
Non-operating income (expense) | | | | | | | - | |
Interest income | | | - | | | | - | |
Interest expense | | | - | | | | - | |
Other income | | | - | | | | - | |
Other expense | | | - | | | | - | |
Loss on deregister of subsidiary | | | - | | | | (3,565 | ) |
Loss before income taxes | | | - | | | | - | |
Income tax | | | - | | | | - | |
| | | | | | | | |
Net loss | | $ | - | | | $ | (3,565 | ) |
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. LEGAL PROCEEDINGS
Civil case with Mr. Yao Gui Mu
Yao Gui Mu (“the Plaintiff”), former operation manager of the subsidiary in Shanxi, Shanxi Green Biotechnology Industry Company Limited (“the Shanxi Subsidiary”), brought a lawsuit against the Shanxi Subsidiary, in the District People’s Court of Jin Zhong City, Yu Ci District. The subject dispute of the lawsuit concerns an unsettled current account balance of $141,550 (RMB900,000) which was claimed to be a loan advanced to the Company by the Plaintiff. Together with the subject dispute, the Plaintiff also claimed the relevant interest was RMB513,100 calculated from November 6, 2012 to August 15, 2017 with 1% monthly interest rate. The Company’s PRC lawyer had submitted a Statement of Defense on November 23, 2017 to The District People’s Court of Yuci District, Jin Zhong City (“the Court”). A court hearing was held on December 5, 2017. Upon the request by the Court, Shanxi Subsidiary provided supplemental evidence to the Court on 16 January 2018. The second hearing was held on September 19, 2018.
The District People’s Court of Jin Zhong City, Yu Ci District released the civil judgement decision (2017) 晋0702 民初3879号, that there were not sufficient evidence provided by the Plaintiff for the dispute, and the Court did not support for the claim of loan and related interest against the Shanxi Subsidiary. The judgement decision dated on August 31, 2018.
Yao Gui Mu (“the Appealer”) appeal for the decision to the Intermediate People’s Court of Shanxi Province, Jin Zhong City. On May 10, 2019, the Intermediate People’s Court of Shanxi Province, Jin Zhong City released civil judgement decision (2019) 晋07民終355号, that due to the fact that there was a second hearing held on September 19, 2018 after the judgement decision made on August 31, 2018, which was a severe disorder of procedures. Therefore, the civil judgement decision (2017) 晋0702 民初3879号 was revoked and the case was put to re-trial, which was subsequently carried out on October 16, 2019.
On December 16, 2019, the Court released the civil judgement decision (2019) 晋0702 民初3543号之一, that the related dispute loan was being a criminal case under police investigation. Before the police formed a decision, the Court could not confirm that the civil case was under the district court’s judgement jurisdiction. Therefore, the lawsuit against the Shanxi Subsidiary was rejected.
Yao Gui Mu (“the Appealer”) appeal for the decision (2019) 晋0702 民初3543号之一to the Intermediate People’s Court of Shanxi Province, Jin Zhong City. On June 29, 2020, the Intermediate People’s Court of Shanxi Province, Jin Zhong City released civil judgement decision (2020) 晋07民終1734号, agreed with the original civil judgement and reject the appeal.
On May 20, 2021, Yao Gui Mu (“the Plaintiff”) once again re-brought the lawsuit against the Shanxi Subsidiary to the District People’s Court of Jin Zhong City, Yu Ci District, after the police formed the decision on April 16, 2021, that no prosecution against the Plaintiff. On July 26, 2021, a court hearing was held and the trail completed. The judgement decision will be released not later than end of this year.
On November 15 2021, Yao Gui Mu withdrew the claim against the Shanxi Subsidiary. Although Yao Gui Mu did not disclose the reason which led to his decision of such withdraw, according to the company’s lawyer it is likely due to Yao Gui Mu’s lack of sufficient evidence as it was found by the District People’s Court of Jin Zhong City, Yu Ci District. It is therefore less likely that Yao Gui Mu could bring the claim against the Shanxi Subsidiary again unless he can prove the existence of the loan.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16. LEGAL PROCEEDINGS (CONTINUED)
Criminal investigation regarding a potential fraud with one of its former customers
Management of the Company suspects that there was a potential fraud committed in the sales made to one of its previous customers. Management reported to the local police of Yuci District, Jinzhong City, Shanxi Province, China about the said potential fraud. The Bureau of Public Security of Yuci District officially undertook the case and initiated investigation procedures on 11 September 2017. Management has been informed that the case is currently under criminal investigation by relevant authorities.
On May 6, 2021, the Management has been informed by the police authorities about no case for investigation decision晋中榆公不立字(2021) 000030号, because there was no sufficient evidence for the trial and no criminal prosecution will carry out.
The Company disagreed with the decision and appeal to the People’s Procuratorate of Jin Zhong City, Yu Ci District on May 7, 2021, and the appeal was accepted on May 21, 2021. On August 11, 2021, the People's Procuratorate of Jun Zhong City, Yu Ci District made the decision 榆检二部移字[2021]Z4号to send back the case to the Bureau of Public Security of Jun Zhong City, Yu Ci District to reconsider the procedure for prosecution according to the regulation applied.
Criminal investigation against one of GVBT’s former employee
Management of the Company suspects that one of its former senior staff may have committed the offence of “unlawfully taking possession of company property through taking advantage of his position” under his employment with the Company. Management reported to the local police of Yuci District, Jinzhong City, Shanxi Province, China about the said potential fraud on 10 October, 2017. The Bureau of Public Security of Yuci District officially undertook its case and initiated investigation procedures on 28 January 2018. Management has been informed that the case is currently under criminal investigation by relevant authorities in China.
On April 16, 2021, the Management has been informed by the police authorities about no case for investigation decision晋中榆公不立字(2021) 000018号, because there was no sufficient evidence for the trial and no criminal prosecution will carry out.
The Company disagreed with the decision and appeal to the People’s Procuratorate of Jin Zhong City, Yu Ci District on May 7, 2021, and the appeal was accepted on July 5, 2021.
Besides the disclosure stated above, management is not aware of any other legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Annual Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.
NOTE 17. COMMON STOCK
On January 17, 2022, as a result of a private sale transactions, all of the issued and outstanding shares of common stock of Able Lead Holdings Limited were transferred from Leung Kwong Tak, Michael to Well Supreme International Limited (the “Purchaser”).
Able Lead Holdings Limited was the holder of 75,674,200 shares (the “Shares”), comprising about 47.064% of the issued shares of the Company. Through the purchase of all of the issued and outstanding shares of common stock of Able Lead Holdings Limited, the Purchaser became the owner of the Shares.
The Purchaser is a company incorporated in the BVI and is beneficially owned by Lam Ching Wan, William and Ho Mee Kuen, Karen (“Karen Ho”), with respective shareholding of 0.1% and 99.9% of all the issued shares of the Purchaser.
Karen Ho is the wife of Lam Ching Wan, William and is regarded as a related party to him. As a result, Lam Ching Wan, William is holding, in addition to the 3.732% of the issued shares of the Company (through Harcourt Capital Limited), totally approximately 50.796% of the voting rights of the issued and outstanding share capital of the Company on a fully-diluted basis of the Company, and became the controlling shareholder.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
(F/K/A VIBE WIRELESS CORP.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18. SUBSEQUENT EVENT
COVID-19
COVID-19 continues to spread rapidly to many parts of China and other parts of the world. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in China and elsewhere. In accordance with recommended and mandated restrictions by relevant government and public health officials in light of the COVID-19 outbreak, the Company’s operations had been slightly affected by the COVID-19. As of the issuance date of this report, the extent to which the COVID-19 impacts the Company’s results will depend on future developments, which are uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 and the actions to contain the COVID-19 or treat its impact, among others.
Management has evaluated all activities and concluded that there were no other subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements except for the disclosures in Note 17 and the mentioned above matters.
All subsequent events are being disclosed in the Company’s annual reports that are currently in preparation for filing. Such events shall be described in detail therein.
GREEN VISION BIOTECHNOLOGY CORP. AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
SCHEDULE III
QUARTERLY INFORMATION (UNAUDITED)
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.