UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

SCHEDULE 14C

 

INFORMATION REQUIRED IN INFORMATION STATEMENT

SCHEDULE 14C INFORMATION

 

Information Statement Pursuant to Section 14(c) of the

Securities Exchange Act of 1934

(Amendment No. 1)

 

Check the appropriate box:

 

  ☒ Preliminary information statement (Amendment No. 1) ☐ Confidential, for use of the Commission only (as permitted by Rule 14c-5(d)(2))
         
  ☐ Definitive information statement    

 

ORANCO, INC.

(Name of Registrant as Specified in Charter)

 

Payment of Filing Fee (Check the appropriate box):

 

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  ☐ Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
     
  (1) Title of each class of securities to which transaction applies:
     
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  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
     
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  ☐ Fee paid previously with preliminary materials.
     
  ☐ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
     
  (1) Amount previously paid:
     
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ORANCO, INC.

One Liberty Plaza

Suite 2310 PMB# 21

New York, NY 10006

 

To the holders of common stock of Oranco, Inc.:

 

Oranco, Inc., a Nevada corporation (the “Company”), on August 30, 2018, obtained the written consent of the stockholder holding a majority of the Company’s issued and outstanding shares of common stock, par value $0.001 (the “Common Stock”), to approve an amendment of the Company’s articles of incorporation, as amended, to increase the number of authorized shares of Common Stock from 100,000,000 to 500,000,000. One share of Common Stock entitles the holder thereof to one non-cumulative vote. 

 

The details of the foregoing action and other important information are set forth in the accompanying Information Statement. The board of directors of the Company has unanimously approved the above action.

 

Under Section 78.320 of the Nevada Revised Statutes, action by stockholders may be taken without a meeting, without prior notice, by written consent of the holders of outstanding capital stock having not less than the minimum number of votes that would be necessary to authorize the action at a meeting at which all shares entitled to vote thereon were present and voted. On that basis, the stockholder holding a majority of the outstanding shares of voting stock of the Company approved the foregoing actions. No other vote or stockholder action is required. You are hereby being provided with notice of the approval of the foregoing action by less than unanimous written consent of the stockholders of the Company.

 

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

 

  By Order of the Board of Directors,
   
  /s/ Peng Yang
  Peng Yang
  President, Secretary, and Director

 

Date: November 29, 2018

  

 

 

 

ORANCO, INC.

 

INFORMATION STATEMENT

 

CONCERNING CORPORATE ACTION AUTHORIZED BY WRITTEN

CONSENT OF STOCKHOLDERS

 

WE ARE NOT ASKING YOU FOR A PROXY AND

YOU ARE REQUESTED NOT TO SEND US A PROXY

 

General Information

 

This Information Statement is being furnished to the stockholders of Oranco, Inc., a Nevada corporation (“ORNC”, “Company,” “we,” “us” or “our”), to advise them of the corporate action described herein, which has been authorized by the written consent of the stockholder owning a majority of the Company’s voting stock, in accordance with the requirements of the Nevada Revised Statutes.

 

The Company is engaged in alcohol wholesale in China through its operating subsidiary, Fenyang Huaxin Wine Industry Development Co., Ltd. (“Huaxin”), a People’s Republic of China company located in Shanxi Province, that is 100% held by Fujian Jin’ou Trading Co., Ltd.  

 

 

This Information Statement will first be mailed to stockholders on or about December 15, 2018 and is being furnished for informational purposes only.

 

  1  

 

 

Our board of directors has determined that the close of business on August 30, 2018 was the record date (“Record Date”) for the stockholders entitled to notice about the actions authorizing the amendment of our articles of incorporation to increase the number of authorized shares of common stock, par value $0.001 (“Common Stock”) from 100,000,000 to 500,000,000.  The foregoing amendment is referred to herein as the “Action.”

 

Under Section 78.320 of the Nevada Revised Statutes, any action required or permitted by the Nevada Revised Statutes to be taken at a meeting of stockholders of a Nevada corporation may be taken without a meeting, without prior notice and without a vote, if consents in writing, setting forth the action so taken, are signed by stockholders holding at least a majority of the voting power.

 

On August 15, 2018, our board of directors approved an amendment of our articles of incorporation to increase the number of authorized shares of Common Stock from 100,000,000 to 500,000,000 and authorized our officers to deliver this Information Statement.

 

As of the Record Date, Peng Yang, who then owned of record approximately 74,681,530 shares of Common Stock, representing 76.05% of the outstanding shares of Common Stock as of the Record Date, executed and delivered to us a written consent authorizing and approving the Action.

 

Accordingly, the Action has been approved by the holders of a majority of our issued and outstanding shares of Common Stock and no further vote or further action of our stockholders is required to approve the Action. You are hereby being provided with notice of the approval of the Action by less than unanimous written consent of our stockholders. However, under federal law, the Action will not be effective until at least 20 days after this Information Statement has first been sent to stockholders. Stockholders do not have any dissenter or appraisal rights in connection with the Action.

 

As the Action was approved by written consent of the holder of a majority of the Company’s voting stock as of the Record Date, there will be no stockholders’ meeting, and representatives of the principal accountants for the current year and for the most recently completed fiscal year will not have the opportunity to make a statement if they desire to do so and will not be available to respond to appropriate questions from our stockholders. 

 

Our executive offices are located at One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006, and our telephone number is (646) 7593614. 

 

The Purpose and Effect of the Action  

 

Our current articles of incorporation authorizes us to issue up to a total of 100,000,000 shares of Common Stock. As of the Record Date, there were 98,191,480 shares of Common Stock outstanding. Once the Action is complete, we will be authorized to issue up to a total of 500,000,000 shares of Common Stock.

 

On June 29, 2018, we completed and closed a share exchange (the “Share Exchange”) under a Share Exchange Agreement (the “Share Exchange Agreement”), entered into by and among (i) the Company; (ii) Reliant Galaxy International Limited, a British Virgin Islands company with limited liability (“Reliant”); (ii) and the shareholders of Reliant (“Sellers”) pursuant to which Reliant became a wholly owned subsidiary of ours. Pursuant to the Share Exchange Agreement, the Company acquired from the Sellers all of the issued and outstanding equity interests of Reliant as consideration in exchange for 349,296,000 newly-issued shares of Common Stock of the Company to Sellers, of which 28,000,000 were issued on June 29, 2018, the closing date of the Share Exchange, and the remaining 321,296,000 shares (“Remaining Shares”) to be issued upon the completion of the increase of the Company’s authorized shares. As a result of the Share Exchange, the Sellers, as the former shareholders of Reliant, became the controlling shareholders of the Company. The Share Exchange was accounted for under the business combination under common control of accounting.  

 

Our board of directors has determined that in order to issue the Remaining Shares to the Sellers pursuant to the Share Exchange Agreement, it is necessary for the Company to increase the number of authorized shares of Common Stock to ensure that the Company has enough authorized shares of Common Stock. Mr. Yang, our sole director, is one of the Shareholders to whom the Remaining Shares would be issued.

 

  2  

 

 

Although the increase in the authorized number of shares of Common Stock will not, in and of itself, have any immediate effect on the rights of our shareholders, the upcoming issuance of the Remaining Shares could affect our shareholders in a number of respects, including by diluting the voting power of the current holders of our Common Stock and by diluting the earnings per share and book value per share of outstanding shares of our Common Stock at such time. Once effective, the board of directors will have the authority to issue any remaining authorized shares of Common Stock without requiring any further approval from our Common Stock shareholders. The issuance of additional shares of Common Stock could adversely affect the market price of our Common Stock.

 

The Action will effect a change in the number of authorized shares of Common Stock. The Action will not result in any change in our business, assets, liabilities or net worth (other than as a result of the costs incident to the amendment, which is immaterial) and it will not affect the rights of existing shareholders. The rights and preferences of the outstanding shares of the Common Stock will remain the same. However, the issuance of additional shares of Common Stock may result in substantial dilution to our existing stockholders, and such issuances may not require stockholder approval. Our management, including our director and officers, will remain the same after the Action.

 

Our board of directors considers the Action to be in the best interests of the Company and its stockholders. Other than the issuance of the Remaining Shares, we do not currently have any agreements or other commitments to issue any shares of Common Stock.

 

Interest of Persons in Matters to be Acted Upon

 

As discussed above, our officer, director and principal stockholder Mr. Peng Yang has a substantial material interest in the favorable outcome of the Action. 

 

Effect on Outstanding Shares

 

The rights and preferences of the outstanding shares of the Common Stock will remain the same should the Action occur. The ownership percentages of the holders of the Company’s issued and outstanding Common Stock will not change as a result of the Amendment.

 

The increase in the number of authorized shares of our Common Stock will permit the Board to issue authorized and unissued shares without further stockholder action (except as may be required by applicable laws or the rules of any stock exchange or national securities association trading system on which our securities may be listed or traded). The issuance in the future of additional authorized shares may have the effect of diluting the earnings per share and book value per share, as well as the stock ownership and voting rights, of the then outstanding shares of our Common Stock. Currently, the Company intends to issue 321,296,000 shares of the Company’s Common  Stock pursuant to the Share Exchange. The Company does not have any other specific agreements or arrangements to acquire any business or engage in a similar transaction or otherwise to issue additional shares of the Company’s Common Stock.

 

VOTING SECURITIES

 

At the time of the stockholder action, our issued and outstanding voting securities consisted of shares of Common Stock. There were 98,191,480 shares of Common Stock issued and outstanding as of the Record Date.

 

Each share of Common Stock is entitled to one non-cumulative vote on all matters submitted to the holders of Common Stock for their approval. The written consent of a majority of the outstanding shares of Common Stock was necessary to authorize the Action described herein.

 

  3  

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information with respect to the beneficial ownership of our Common Stock as of August 30, 2018, by (i) each stockholder known by us to be the beneficial owner of more than 5% of our Common Stock (our only class of voting securities), (ii) each of our directors and executive officers, and (iii) all of our directors and executive officers as a group. To the best of our knowledge, except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of our Common Stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge, none of the shares listed below are held under a voting trust or similar agreement, except as noted. To our knowledge, there is no arrangement, including any pledge by any person of securities of the Company or any of its parents, the operation of which may at a subsequent date result in a change in control of the Company.

 

Name and address of beneficial owner   Amount
and nature of
beneficial ownership 		    Percent of
class (1) 		 
Peng Yang
One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006 		    74,681,530 shares (1)(2)     76.05 %
Ronald Zhang
One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006 		    0       0 %
                 
All directors and executive officers as a group (2 persons)     74,681,530 shares       76.05 %

 

(1) Percentage is calculated upon the 98,191,480 shares of Common Stock outstanding as of August 30, 2018

 

(2) Includes 53,121,530 shares of Common Stock held by Million Success Business Limited, an entity 100% controlled by Peng Yang.

 

INCREASE IN AUTHORIZED COMMON STOCK

 

We are currently authorized by our articles of incorporation to issue 100,000,000 shares of Common Stock. As of the Record Date, there were 98,191,480 shares of Common Stock issued and outstanding.

 

We are increasing our authorized shares of Common Stock so that we have a sufficient number of authorized shares of Common Stock to permit the issuance of the Remaining Shares.

 

Accordingly, our board of directors believes it is in our best interests and the best interests of our stockholders to increase the number of authorized shares of Common Stock to provide a sufficient number of authorized shares to allow for the issuance of the Remaining Shares and such other purposes as our board of directors determines.

 

The increase in the number of authorized shares of Common Stock to a level that continues to provide a meaningful number of authorized shares will permit our board of directors to issue additional shares of Common Stock without further approval of our stockholders, and our board of directors does not intend to seek stockholder approval prior to any issuance of the authorized capital stock unless stockholder approval is required by applicable law or stock market or exchange requirements.

 

Although from time to time we review various transactions that could result in the issuance of shares of Common Stock, other than shares of Common Stock issuable pursuant to the Share Exchange, we have not reviewed any specific transaction to date that we presently anticipate will result in a further issuance of shares of Common Stock.

 

On August 15, 2018, our board of directors approved an amendment of our articles of incorporation to increase the number of authorized shares of Common Stock from 100,000,000 to 500,000,000 and authorized our officers to deliver this Information Statement.

 

As of the Record Date, Peng Yang, who then owned of record approximately 74,681,530 shares of Common Stock, representing 76.05% of the outstanding shares of Common Stock as of the Record Date, executed and delivered to us a written consent authorizing and approving the Action.

 

  4  

 

 

The approval of the amendment of our articles of incorporation, as amended, to authorize the increase of the number of authorized shares of Common Stock to 500,000,000 required such board approval and the affirmative vote of the stockholder representing a majority of the issued and outstanding shares of Common Stock. Such requirements have been met, so no vote or further action of our stockholders is required to approve the amendment to our articles of incorporation to authorize the increase of the number of authorized shares of Common Stock to 500,000,000 . You are hereby being provided with notice of the approval of such amendment by less than unanimous written consent of our stockholders. The Certificate of Amendment to Articles of Incorporation of Oranco, Inc. setting forth the amendment is attached to this Information Statement as Exhibit A.

 

Promptly after the twentieth day after the date this Information Statement has first been sent to stockholders, we intend to take all other required actions to complete the amendment of our articles of incorporation to increase the number of authorized shares of Common Stock to 500,000,000 consistent with the foregoing. 

 

TRANSACTION INFORMATION

 

Summary Term Sheet  

 

The following summarizes the information contained in this Preliminary Schedule 14C and Form 8-K/A filed on October 4, 2018, but does not contain all of the information that may be important to you. You should read carefully this Preliminary Schedule 14C and the Form 8-K/A filed on October 4, 2018, along with their respective exhibits, for a complete discussion of the Share Exchange.

 

  ● Oranco, Inc. was incorporated under the laws of the State of Nevada, on June 10, 1977. The purposes for which the corporation was organized were: (1) to engage in any lawful business from time to time authorized by the board of directors, (2) to act as principal, agent, partner or joint venturer or in any other capacity in any transaction, (3) to do business anywhere in the world, and (4) to have and exercise all rights and powers from time to time granted to the corporation by law.
     
  ● Reliant Galaxy International Limited is a British Virgin Islands company with limited liability, which is engaged in alcohol wholesale in China through its operating subsidiary, Fenyang Huaxin Wine Industry Development Co., Ltd. (“Huaxin”). Huaxin currently focuses on the sale of Chinese Fenjiu liquor and imported wines catering to Chinese people’s ever-evolving tastes in alcohols through creative marketing strategies and innovative product designs.
     
  ● On June 29, 2018, Oranco, Reliant, and the shareholders of Reliant entered into the Share Exchange Agreement, which closed on June 29, 2018. Pursuant to the terms of the Share Exchange Agreement, Oranco will, in exchange for all of the outstanding capital stock of Reliant, issue an aggregate of 349,296,000 new shares of Common Stock, par value $0.001 per share, to the Shareholders of Reliant, of which 28,000,000 were issued on at the closing of the Share Exchange, and the remaining 321,296,000 shares are to be issued at the completion of the increase of Oranco’s authorized shares. Upon the closing of the Share Exchange, Reliant became a wholly owned subsidiary of Oranco.
     
  ● Pursuant to the Share Exchange, we acquired the business of Reliant, which is to engage in the sale and distribution of wines and spirits in China. As a result, we have ceased to be a shell company.
     
  ● The Share Exchange Agreement contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions. The Share Exchange is intended to be treated as a tax-free reorganization under the Internal Revenue Code.
     
  ● The issuance of shares of our Common Stock to the shareholders of Reliant in connection with the Share Exchange was not registered under the Securities Act, in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act, which exempts transactions by an issuer not involving any public offering, Regulation D promulgated by the SEC under that section and Regulation S promulgated by the SEC. These securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement, and some of these securities are subject to further contractual restrictions on transfer.

 

  5  

 

 

Regulatory Approvals  

 

None.

 

Reports, Opinions, Appraisals  

 

None.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations  

 

The disclosure contained in the Form 8-K/A filed on October 4, 2018 under the section entitled “ Management’s Discussion And Discussion and Analysis of Financial Condition And Results of Operations ” beginning on page 14 is incorporated herein by reference.

 

Past Contacts, Transactions or Negotiations  

 

The exhibits contained in Form 10-K filed on October 4, 2018 and the exhibits contained in Form 8-K/A filed on September 14, 2018 are incorporated herein by reference.

 

Selected Financial Data And Pro Forma Information   

 

In accordance with Item 13(a) and Item 14(b) of Schedule 14A, Reliant’s audited financial statements as of, and for the years ended June 30, 2017 and 2016, Reliant’s unaudited financial statements as of, and for the nine months ended March 31, 2018, and the accompanying notes, are included in this Preliminary Schedule 14C beginning on page 10.

 

In accordance with Item 14(b) of Schedule 14A, the following unaudited pro forma financial information with respect to the Share Exchange reported in this Preliminary Schedule 14C begins on page 13.

 

  ● Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2018, and
     
  ● Notes to the Unaudited Pro Forma Consolidated Financial Statements.

 

Supplementary Financial Information

 

Not applicable to a smaller reporting company.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  

 

None.

 

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 

Not applicable to a smaller reporting company.

 

INFORMATION INCORPORATED BY REFERENCE

 

The SEC allows us to “incorporate by reference” into this Preliminary 14C the information we file with the SEC. This means that we can disclose important information to you by referring you to those documents. Any statement contained in a document incorporated by reference in this Preliminary 14C shall be deemed to be modified or superseded for purposes of this Preliminary 14C to the extent that a statement contained herein, or in any subsequently filed document, which also is incorporated by reference herein, modifies or supersedes such earlier statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Preliminary 14C. 

 

We hereby incorporate by reference into this Preliminary 14C the following documents that we have filed with the SEC under the Exchange Act: 

 

  ● the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018, filed with the SEC on September 28, 2018, and
     
  ● the Company’s Current Reports on Form 8-K, filed with the SEC on October 4, 2018, September 14, 2018 and July 6, 2018.

 

  6  

 

 

DELIVERY OF DOCUMENTS TO SECURITY HOLDERS

 

We are delivering this Information Statement, along with the Annual Report on Form 10-K for the fiscal year ended June 30, 2018 and Current Report on Form 8-K filed with the SEC on July 6, 2018, as amended on September 14, 2018 and October 4, 2018, to all stockholders of record as of the Record Date.

 

Stockholders residing in the same household who hold their shares in the name of a bank, broker or other holder of record may receive only one Information Statement if previously notified by their bank, broker or other holder. This process, by which only one Information Statement is delivered to multiple security holders sharing an address, unless contrary instructions are received from one or more of the security holders, is called “householding.” Householding may provide convenience for stockholders and cost savings for companies. Once begun, householding may continue unless instructions to the contrary are received from one or more of the stockholders within the household.

 

Copies of this Information Statement are available promptly by calling (646) 759-3614, or by writing to Oranco, Inc., Attn: Peng Yang, One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006. If you are receiving multiple copies of this Information Statement, you also may request orally or in writing to receive a single copy of this Information Statement by calling (646) 759-3614, or by writing to Oranco, Inc., Attn: Peng Yang, One Liberty Plaza, Suite 2310 PMB# 21, New York, NY 10006.

 

ORANCO, INC.

 

November 29, 2018

 

  7  

 

 

EXHIBIT A

CERTIFICATE OF AMENDMENT

TO THE

ARTICLES OF INCORPORATION

OF

ORANCO, Inc.

 

 

 

  8  

 

 

SURE RICH INVESTMENT (GROUP) LIMITED 

CONSOLIDATED STATEMENTS OF OPERATIONS 

( Chinese Renminbi )

 

    Unaudited              
   

March 31,

2018

   

June 30,

2017

   

June 30,

2016

 
Revenue     83,258,237       91,144,666       24,249,106  
      83,258,237       91,144,666       24,249,106  
                         
Cost of sales     23,002,777       24,065,113       6,125,410  
Selling and distribution expenses     3,338,043       2,521,950       352,887  
Administrative expenses     3,686,062       5,516,707       2,897,075  
      30,026,882       32,103,770       9,375,336  
                         
Other income     131,447       227,552       135,833  
Interest and other financial charges     1,768,720       3,420,272       1,976,614  
Income before income taxes     51,594,082       55,848,176       13,032,953  
                         
Income taxes     12,623,911       14,121,343       3,441,782  
Net Income     38,970,171       41,726,833       9,591,171  
                         
Attributable to:                        
Equity holders of the Company     37,862,781       34,091,734       6,428,743  
Non-controlling interests     1,107,390       7,635,099       3,162,464  
      38,970,171       41,726,833       9,591,171  
                         
Earnings per share     38,970,171       41,726,833       9,591,171  
Book value per share     94,106,363       55,136,192       15,459,359  
Cash dividends declared     Nil       Nil       Nil  

 

9

 

 

SURE RICH INVESTMENT (GROUP) LIMITED 

CONSOLIDATED BALANCE SHEETS 

( Chinese Renminbi )

 

   

Unaudited

Nine months

Ended

   

Year

ended

   

Year

ended

 
   

March 31,

2018

   

June 30,

2017

   

June 30,

2016

 
ASSETS:                  
Current assets                  
Cash and cash equivalents     23,857,239       6,607,407       427,691  
Inventories     8,581,472       8,597,710       5,226,421  
Trade receivables     48,745,286       47,517,200       20,844,588  
Deposits, prepayments and other receivables     28,303,405       31,404,225       42,371,128  
Prepaid land lease     109,680       109,680       109,680  
      109,597,082       94,236,222       68,979,508  
                         
Non-current assets                        
Property, plant and equipment     3,340,057       3,120,166       3,321,635  
Prepaid land lease     4,936,840       5,019,100       5,128,780  
      8,276,897       8,139,266       8,450,415  
Total assets     117,873,979       102,375,488       77,429,923  
                         
LIABILITIES AND SHAREHOLDERS’ EQUITY                        
Current liabilities                        
Trade payables     528,608       118,115       2,303,656  
Receipts in advance, accruals and other payables     18,463,215       17,493,902       21,482,787  
Current tax liabilities     4,775,793       2,627,279       534,121  
Bank borrowings     -       27,000,000       10,650,000  
      23,767,616       47,239,296       34,970,564  
                         
Non-current liabilities                        
Bank borrowings     -       -       27,000,000  
      -       -       27,000,000  
                         
Share capital     1       1       1  
Statutory reserve     4,249,871       4,249,871       1,325,763  
Acquisition reserve     12,151,843       12,151,843       -  
Retained earnings     73,714,502       35,851,721       4,684,095  
Equity attributable to equity holders of the Company     90,116,217       52,253,436       6,009,859  
Non-controlling interest     3,990,146       2,882,756       9,449,500  
Total equity     94,106,363       55,136,192       15,459,359  
Total liabilities and shareholders’ equity     117,873,979       102,375,488       77,429,923  

 

The accompanying notes are an integral part of the consolidated financial statements. 

 

10

 

 

SURE RICH INVESTMENT (GROUP) LIMITED 

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY 

( Chinese Renminbi )

 

   

Share

capital

   

Statutory

reserve

   

Acquisition

reserve

   

Retained

Earnings/
(loss)

    Attributable
to the
Company 		   

Non-

controlling

interests

   

Total

Equity

 
Balance at June 30, 2015     1       438,786       -       (857,635 )     (418,848 )     6,287,036       5,868,188  
Total comprehensive income for the year     -       -       -       6,428,707       6,428,707       3,162,464       9,591,171  
Appropriation     -       886,977       -       (886,977 )     -       -       -  
Balance at June 30, 2016     1       1,325,763       -       4,684,095       6,009,859       9,449,500       15,459,359  
                                                         
Total comprehensive income for the year     -       -       -       34,091,734       34,091,734       7,635,099       41,726,833  
Acquisition reserve     -       -       12,151,843       -       12,151,843       (14,201,843 )     (2,050,000 )
Appropriation     -       2,924,108       -       (2,924,108 )     -       -       -  
Balance at June 30, 2017     1       4,249,871       12,151,843       35,851,721       52,253,436       2,882,756       55,136,192  
                                                         
Unaudited                                                        
                                                         
Balance at June 30, 2017     1       4,249,871       12,151,843       35,851,721       52,253,436       2,882,756       55,136,192  
Total comprehensive income for the period     -       -       -       37,862,781       37,862,781       1,107,390       38,970,171  
Appropriation     -       -       -       -       -       -       -  
Balance at March 31, 2018     1       4,249,871       12,151,843       73,714,502       90,116,217       3,990,146       94,106,363  

 

The accompanying notes are an integral part of the consolidated financial statements.

 

11

 

 

SURE RICH INVESTMENT (GROUP) LIMITED 

CONSOLIDATED STATEMENTS OF CASH FLOWS 

( Chinese Renminbi )

 

   

Unaudited

Nine months

ended

   

Restated

Year ended

    Year ended  
    March 31,     June 30,     June 30,  
    2018     2017     2016  
Operating activities                  
Net income     38,970,171       41,726,833       9,591,171  
Adjustments to reconcile net income to cash generated by operating activities:                        
Depreciation and amortization     255,635       342,042       278,854  
Changes in working capital:                        
Inventories     16,238       (3,371,289 )     (138,286 )
Trade receivables     (1,228,086 )     (26,672,612 )     (12,103,188 )
Deposits, prepayments and other receivables     16,495,853       10,966,903       3,364,210  
Trade payables     410,493       (2,185,541 )     854,641  
Receipts in advance, accruals and other payables     (10,277,206 )     (1,895,727 )     (35,372,907 )
Cash generated by/(used in) operating activities     44,643,098       18,910,609       (33,525,505 )
                         
Investing activities                        
Payments for acquisition of property, plant and equipment     (393,266 )     (30,893 )     (143,781 )
Cash used in investing activities     (393,266 )     (30,893 )     (143,781 )
                         
Cash flows from financing activities                        
Acquisition of additional interest in subsidiary             (2,050,000 )        
Proceeds from bank borrowings     -       -       32,950,000  
Repayment of bank borrowings     (27,000,000 )     (10,650,000 )     -  
Cash (used in)/generated from financing activities     (27,000,000 )     (12,700,000 )     32,950,000  
                         
Increase/(decrease) in cash and cash equivalents     17,249,832       6,179,716       (719,286 )
Cash and cash equivalents, beginning of the period     6,607,407       427,691       1,146,977  
Cash and cash equivalents, end of the period     23,857,239       6,607,407       427,691  
                         
Supplemental disclosure of cash flows information                        
Cash paid during the year for interest     (1,768,720 )     (3,431,027 )     (1,976,614 )
Cash paid during the year for income taxes     (10,475,397 )     (12,028,185 )     (3,035,941 )

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

  

On June 29, 2018, Oranco Inc. (the “Company”) completed and closed a share exchange under a Share Exchange Agreement, entered into with the shareholders of Reliant Galaxy International Limited (“Reliant Galaxy”) to acquire their 100% of the issued and outstanding common shares in Reliant Galaxy by issuance of 349,296,000 shares of the Company’s common stock with par value of USD 0.001 each.

 

To rationalize the group structure for the purpose of share exchange with the Company, on 20 June 2018, Reliant Galaxy acquired 100% equity interest in Sure Rich Investment (Group) Limited (“Sure Rich”). Upon completion of this acquisition, Reliant Galaxy became the holding company of Sure Rich.

 

No financial information of Reliant Galaxy is filed on this Form 8-K as Reliant Galaxy is only an investment holding company with immaterial administrative costs incurred and the management considered that they have no material impacts on the unaudited pro forma condensed combined financial statements.

 

The following unaudited pro forma condensed combined financial statements are based on our historical financial statements and Sure Rich’s historical consolidated financial statements as adjusted to give effect to Oranco Inc.’s acquisition of Sure Rich Investment (Group) Limited and the related financing transactions.

 

The unaudited pro forma condensed combined statements of operations for the 9 months ended March 31, 2018 and the year ended June 30, 2017 give effect to these transactions as if they had occurred on July 1, 2016. The unaudited pro forma condensed combined balance sheet as of March 31, 2018 gives effect to these transactions as if they had been consummated at the end of the 9 months period ended March 31, 2018.

 

The assumptions and estimates underlying the unaudited adjustments to the pro forma condensed combined financial statements are described in the accompanying notes, which should be read together with the pro forma condensed combined financial statements.

 

The unaudited pro forma condensed combined financial statements should be read together with Oranco Inc.’s historical financial statements, which are included in Oranco Inc.’s latest annual report on Form10-K and quarterly report on Form 10-Q, and Sure Rich Investment (Group) Limited’s historical information included herein.

  

14

 

 

Unaudited Pro Forma Condensed Combined Statements of Operations

Nine Months Ended March 31, 2018

( Chinese Renminbi )

 

    Oranco Inc.
Historical 		    Sure Rich
Investment
(Group)
Limited
Historical 		    Pro forma
adjustments 		    Notes   Pro forma
Combined 		 
Revenue     -       83,258,237       -           83,258,237  
      -       83,258,237       -           83,258,237  
                                     
Cost of sales     -       23,002,777       -           23,002,777  
Selling and distribution expenses     -       3,338,043       -           3,338,043  
Administrative expenses     201,380       3,686,062       1,041,803     2a     4,929,245  
      201,380       30,026,882       1,041,803           30,867,306  
                                     
Other income     -       (131,447 )     -           (131,447 )
Interest and other financial charges     2,781       1,768,720       -           1,771,501  
Income before income taxes     (204,161 )     51,594,082       (1,041,803 )         50,348,118  
                                     
Income taxes     -       12,623,911       -           12,623,911  
Net Income/(Loss)     (204,161 )     38,970,171       -           37,724,207  
                                     
Earnings per share                                 0.09  
                                     
Book value per share                                 0.22  
                                     
Cash dividends declared                                 Nil  

  

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

  

15

 

 

Unaudited Pro Forma Condensed Combined Balance Sheets

As of March 31, 2018

(Chinese Renminbi )

   

    Oranco Inc
Historical 		    Sure Rich
Investment
(Group)
Limited
Historical 		    Pro forma
adjustment
Note 2a 		    Pro forma
adjustment
Note 2b 		    Pro forma
adjustment
Note 2c 		    Pro forma
adjustment
Note 2d 		    Pro forma
combined 		 
Cash and cash equivalents     25,245       23,857,239       (1,041,803 )     -       667,606       -       23,508,287  
Inventories     -       8,581,472       -       -       -       -       8,581,472  
Trade receivables     -       48,745,286       -       -       -       -       48,745,286  
Deposits, prepayments and other receivables     162,352       27,093,069       -       -       -       -       28,465,512  
Prepaid land lease     -       109,680       -       -       -       -       109,680  
Total current assets     187,352       108,386,746       (1,041,803 )     -       667,606       -       109,410,237  
                                                      -  
Property, plant and equipment     -       3,340,057       -       -       -       -       3,340,057  
Prepaid land lease     -       4,936,840       -       -       -       -       4,936,840  
Total assets     187,352       117,153,643       (1,041,803 )     -       667,606       -       117,687,134  
                                                         
Trade payables     26,356       528,608       -       -       -       -       554,940  
Receipts in advance, accruals and other payables     255,457       18,463,215       -       (260,796 )     -       -       18,457,876  
Current tax liabilities     -       4,775,793       -       -       -       -       4,775,793  
Total liabilities     281,813       23,767,616       -       (260,796 )     -       -       23,788,633  
                                                         
Common stock     264,763       1       -       94,749       83,451       2,311,791       2,754,755  
Additional paid-in capital     2,195,680       -       -       166,047       584,155       -       2,945,882  
Statutory reserve     -       4,249,871       -       -       -       -       4,249,871  
Acquisition reserve     -       12,151,843       -       -       -       -       12,151,843  
Reverse acquisition reserve     -       -       -       -       -       (2,311,791 )     (2,311,791 )
Accumulated (deficit)/surplus     (2,554,904 )     78,194,648       (1,041,803 )     -       -       -       74,107,941  
Total shareholders’ equity     (94,461 )     94,596,363       (1,041,803 )     260,796       667,606       -       93,898,501  
                                                         
Total liabilities and shareholders’ equity     187,182       117,153,643       (1,041,803 )     260,796       667,606       -       117,687,134  

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

  

16

 

 

Unaudited Pro Forma Condensed Combined Statements of Operations

year ended JUNE 30, 2017

( Chinese Renminbi )

  

    Oranco Inc.
Historical 		    Sure Rich
Investment
(Group)
Limited
Historical 		    Pro forma
adjustments 		    Notes   Pro forma
Combined 		 
Revenue     -       91,144,666       -           91,144,666  
      -       91,144,666       -           91,144,666  
                                     
Cost of sales     -       24,065,113       -           24,065,113  
Selling and distribution expenses     -       2,521,950       -           2,521,950  
Administrative expenses     200,916       5,516,707       2,050,023     2a     7,767,646  
      200,916       32,103,770       2,050,023           34,354,709  
                                     
Other income     (20 )     (227,552 )     -           (227,572 )
Interest and other financial charges     3,446       3,420,272       -           3,423,718  
Income/(Loss) before income taxes     (204,342 )     55,848,176       (2,050,023 )         53,593,811  
                                     
Income taxes     -       14,121,343       -           14,121,343  
Net Income/(Loss)     (204,342 )     41,726,833       (2,050,023 )         39,472,468  
                                     
Earnings per share                           3     0.09  
                                     
Book value per share                                 0.13  
                                     
Cash dividends declared                                 Nil  

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

17

 

 

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

( Chinese Renminbi )

 

1. Basis of presentation

 

The historical consolidated financial statements have been adjusted in the pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the business combination, (2) factually supportable and (3) with respect to the pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results following the business combination.

 

The business combination was accounted for under the business combination under common control of accounting in accordance with ASC Topic 805, Business Combinations. All the assets and liabilities of the Company and Sure Rich were combined using their book values.

 

The pro forma combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

 

The combined pro forma financial information does not reflect the realization of any expected cost savings or other synergies from the acquisition of Sure Rich Investment (Group) Limited as a result of restructuring activities and other planned cost savings initiatives following the completion of the business combination.

 

2. Pro forma adjustments

 

The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change.

 

  (a) These adjustments relate to the costs as following:

 

      USD     RMB  
  For the nine months ended March 31, 2018            
  Listing costs – legal fees     90,000       600,867  
  Salaries     132,000       1,040,411  
  Public Relation fees     6,000       408,746  
  Total     228,000       2,050,023  
                   
  For the year ended June 30, 2017                
  Salaries     99,000       747,112  
  Public Relation fees     45,000       294,691  
  Total     144,000       1,041,803  

 

  (b) This adjustment relates to the issue of 15,000,000 shares of nominal value of USD 0.001 to settle debt of RMB 260,796 (USD 41,287) owed to a Director on April 25, 2018.

 

  (c) This adjustment relates to the issue of 13,000,000 shares of nominal value of USD 0.001 for cash consideration of RMB 667,606 (USD 104,000) to 3 shareholders on May 30, 2018.

 

  (d) This adjustment relates to the issue of 349,296,000 shares of nominal value of USD 0.001 to the shareholders of Reliant Galaxy International Limited for exchange of 100% share capital of Reliant Galaxy International Limited on June 29, 2018.

 

3. Pro forma earnings per share

  

There would be 419,487,480 shares of nominal value of USD 0.001 each in issue should these transactions had occurred on July 1, 2016.

  

 

17